Why Simple?

[mortijoon]

The answer is, because “simple” works, but that’s not enough information to fill up an article. So, let’s take a look at some unrelated examples to really see if “simple” is the best approach to most of the things we do.

 

Have you been to a gym lately where they offer personal training? I have been going to the gym for as long as I can remember and my routine has not really changed much over the years. These days, however, I see some interesting exercises going on during personal training sessions around me. I see people standing on one foot, on a big rubber ball, doing arm curls. The first time I saw something like that I thought of the circus. Just the other day I was bench pressing and to my left I saw this man walking toward me with his trainer right behind him, only this was no normal walk. The trainer had him taking huge steps and touching his knee to the ground while lifting a medicine ball over his head. I could have sworn I saw this before at a Cirque Du Solei show.

 

Don’t get me wrong, I think the big push into personal training is great. At least it gets more people into the gym; who without personal training would still be eating chips on the couch. Make no mistake about it though, when you go to any gym and look around, who are the people in the best shape? It’s the people doing the same basic exercises people have been doing for decades. A stair machine or treadmill mixed with some basic weight training and I am all set. And, let’s not forget the even more important part of fitness, what you eat. There are so many diet fads going on these days that it’s easy to forget that the main issue is very simple, calories in vs. calories out. Is the problem really choosing between the thousands of diets available, or is it the simple answer that people eat too much food and lack self control? The answer, as always, is very simple. You don’t need the expensive gym and fancy workout routine, everything you need is at your local YMCA or your home for a small investment. Expensive diets are not the answer either, no matter how much hype. A well balanced, low calorie, and low fat diet is the simple solution. Just like gravity, you can’t ever get away from the calories in vs. calories out equation, it is what it is…

 

I have had two multi-year stints coaching youth ice hockey. The important part of the story I am about to tell is that there was about a 7 year break in between. Hockey, like other sports is a simple game, strategy wise. It’s all about getting down the ice faster and smarter than the other team and scoring more than they do. All the team drills I have the kids do are very simple drills that have them getting the puck down the ice quickly. After taking a break from my first multi–year coaching experience, I decided to do it again. As the year began and we were a week away from our first practice I received a huge manual in the mail from the president of the hockey club. It was a new coaching manual created by USA Hockey and it was filled with all kinds of new drills that I had never seen before. As I turned the pages, I saw that the drills were getting more and more creative, each drill required more and more cones and arrows than the next. Something disturbed me about this new bible of hockey drills I was supposed to unleash on my young fresh hockey kids.

 

The more I read, the more I noticed that kids were spending more time skating from side to side than they were skating up and down the ice to the other team’s goal. This is like a football player running with the ball, having nothing but space in front of him, and deciding to put on the breaks and start running from sideline to sideline. Very soon he is going to get caught and either lose the ball, get tackled or both! Why the need for the new fancy drills? Because people are never content sticking to basics and mastering them. There is always this desire to reinvent, make some kind of statement, get fancy and so on. I felt it was in the best interest of the kids to throw the book in the garbage and stick to the basics. Now that the competition was learning all these new drills that would slow them down, I figured my team had an advantage competing against that strategy. We ended up winning the Presidents Cup that year which means we were the top team that season. Our banner hangs in the rafters today from that season. We had a great team as well, but I think you get the point. I always tell the kids that the main difference between them and NHL players is doing all the basics faster. Look at some of the great basketball players like MJ and Kobe. They master the simple and basic jump shot better than anyone else.

 

 

 

Now, let’s take a look at speculating in markets. Take a look at the chart on the left, above. Now be honest, have you ever known anyone who has made a consistent low risk living using a chart like that or any of the items below the chart? I could have made that list much bigger but I ran out of room. Some of those items are in every trading book ever written yet I don’t know anyone who has ever made a consistent living using any of that stuff. What I do know for a fact, however, is that Walmart is one of the most successful companies the world has ever seen because they have mastered one, and only one, simple skill. The buy low and sell a little bit higher. They repeat this thousands of times each day, maybe millions sometimes. This is where everyone gets it wrong in trading. They think how Walmart makes money is somehow different from how you make a consistent living trading the financial markets. The truth is, there is no difference. Walmart buys at wholesale prices and sells to us at retail prices. They are so good at it that they can sell things to us a little cheaper than their competition, which is why they are the top traders in their industry, if you will.

 

 

 

Supply/Demand Income Trade. 2nd Feb 2015

 

 

Fig 2

 

Here is an example of a trade from last week that I took from our Supply / Demand grid. This is no different than Walmart selling at retail prices. Instead of me selling toilet paper at retail prices, I sold the DAX at retail prices (supply) to someone who was willing to pay retail prices. That buyer on the other side of my trade likely used one of the items in the first example as a buy signal. Unfortunately, that trader doesn’t realize that most of those tools that give a buy signal have you buying at retail prices and selling at wholesale prices. And by the way, it may not sound sexy but I love being Walmart when it comes to trading.

 

Occam’s Razor, it is a scientific principle that suggests the simplest answer is typically the right answer. If you’re trading or investing results are not where you want them to be, take a look at every component of your plan and begin to question any part of it that seems complicated. Chances are, it is a small set of “simple” answers that will get you where you want to be.

[pepy]

Because the more simple of your trading then trading will be easier rather than before. Also many foreign exchange traders will prefer simple strategy that will help them to sustain their profitability compared to the complex and very hard to understanding strategy.

[myregister]

Without doubt people will prefer a simple strategy because that is easier to learn and especially if your strategy is profit proven i am sure people will trying to apply those for theirselves. I do agree with Sidejob here it is better with simple strategy since it will sustain profitability compared to the complex one and very hard to understand.

[pepy]

Simple means that you can do that in relatively shorter time and the understanding is easier even for newbie to understand. As long as you strategy or technique is simple many people will attract to it and even applied and make it more advanced than before.

[myregister]

Because simple is actually easy thing to do, if you look at many people's thought they will prefer simple and effective strategy which bring them profit. Just like what you said it is shorter because that means it is relatively easier for people to learn about that. Many traders prefer less complex strategy for them so they could do more.

[pepy]

Because simple is actually easy thing to do, if you look at many people's thought they will prefer simple and effective strategy which bring them profit. Just like what you said it is shorter because that means it is relatively easier for people to learn about that. Many traders prefer less complex strategy for them so they could do more.

I think the simplicity means reduction of complexity which is truly great thing happening to the strategy. Many traders around the world trade with simple strategty to detect loss or even when to open a position, it also makes the trader become more innovate. Another strategy which i think is worthy to try is simple but complex underground since it will give a better view.

[myregister]

I think the simplicity means reduction of complexity which is truly great thing happening to the strategy. Many traders around the world trade with simple strategty to detect loss or even when to open a position, it also makes the trader become more innovate. Another strategy which i think is worthy to try is simple but complex underground since it will give a better view.

Actually, a simple technique is preferred by many traders because the technique itself is simple and easier to understood, some people usually choose that kind of strategy or technique because they do not like or things complicated to bother itself including a strategy to trade in foreign exchange. Just like scalping techniques, which is simple enough and not as complex as some other techniques/strategy. 

[adamsmiths]

This is a good and informative thread. Loved reading the opening post. 

[pepy]

Actually, a simple technique is preferred by many traders because the technique itself is simple and easier to understood, some people usually choose that kind of strategy or technique because they do not like or things complicated to bother itself including a strategy to trade in foreign exchange. Just like scalping techniques, which is simple enough and not as complex as some other techniques/strategy. 

But it is not as easy as many people think the forex in fact become more and more complex considering that the sentiment in the market sometimes playing hard. One thing that you all should know here that simplicity is what we are looking for, but in my case sometimes simplicity doesn't help us at all to make more profit.

[myregister]

But it is not as easy as many people think the forex in fact become more and more complex considering that the sentiment in the market sometimes playing hard. One thing that you all should know here that simplicity is what we are looking for, but in my case sometimes simplicity doesn't help us at all to make more profit.

In few cases, to be honest i prefer simple and easy way to trade that is why i am using the news calendar based site analysis which i got from a website i visited in my native language. It  has set of rules but if you know the core it is just like you can analyze the market in few seconds. The result? Of course that is different to each sometimes, but if you follow it strictly it could soar up to  between 70 - 80 profitable tradings in 100 tradings.

[pepy]

Some strategy could be simple than other while the others are rather complex, because it is really complex which means more indicators and more steps to be done or simply you are too much newbie to understand it. Well everyone loves simple strategy and so do i but sometimes we must add a bit complexity to increase our chance to be more accurate.

[myregister]

@sidejob So do i, love simple strategy which doesn't add much complex things. I mean simple strategy is easier to learn with just some rules that you need to remember and a bit familiarization you will be able to understand that most. I also think that traders should know that simple strategy doesn't mean profits, it is just all about understanding.

[Sininfinity]

Some strategy could be simple than other while the others are rather complex, because it is really complex which means more indicators and more steps to be done or simply you are too much newbie to understand it. Well everyone loves simple strategy and so do i but sometimes we must add a bit complexity to increase our chance to be more accurate.

 

As long as a strategy works for a trader and brings positive pips, it is a good strategy. Things will get easier with time and repeated use. What is difficult today won't be so difficult in future if one sticks to the strategy.

[radex78]

Yes I am also like with simple trading analysis than using complicated analysis, only look on candlestick pattern and price action, I like with this way because before already trying many kinds indicator but can't discipline and prefer look on candle pattern and price action but still using risk management and this is main important

[smithmary01]

On 2/7/2017 at 12:06 PM, Sininfinity said:

 

As long as a strategy works for a trader and brings positive pips, it is a good strategy. Things will get easier with time and repeated use. What is difficult today won't be so difficult in future if one sticks to the strategy.

Yes I agree and this strategy is very helpful for new blogger. 

[Latham Lapard]

Everything is simple if we keep it that way but if not then it can be risky. I find it super easy with supportive company like FreshForex. I love working with them through the wide range of advantages that comes. I am very happy with the tidy spreads, over 130 instruments, cash back and the exciting 200% Deposit Bonus.

[Erienner]

On 5/1/2020 at 11:42 PM, Latham Lapard said:

Everything is simple if we keep it that way but if not then it can be risky. I find it super easy with supportive company like FreshForex. I love working with them through the wide range of advantages that comes. I am very happy with the tidy spreads, over 130 instruments, cash back and the exciting 200% Deposit Bonus.

for some reason it seems to me that there is no successful trading here ...

[Tindenucac]

I disagree that everything is so simple, everything has its own price

[diamand]

They are so good at it that they can sell things to us a little cheaper than their competition, which is why they are the top traders in their industry, if you will.

[gds221]

In general, in fact, trading is quite simple, but it does require knowledge and skills.

[Erienner]

I do not agree that it is so simple, you need to know and understand too much

[gds221]

In fact, trading is far from easy. And making money without effort is almost impossible.

[Vaabum]

To be honest, I cannot call trading a simple occupation. I really don't think so, and I understand that there are many aspects to know in order to trade.