Overloading: are you making this mistake?

A few years back, I quit my job in the big smoke, moved to the country, and set about creating a simpler life, working from home, spending more time with my family, walking the dog – that sort of stuff.

And it worked. My rural idyll was created.

So, how come this week, I’ve made the decision that the only way to cram in all I have to do in the day is to get up an hour earlier each morning?

Somehow, a busy life has crept up on me, and encroached on my “good life”.

It’s all too easy for over-complications to creep up on us. It happens in business, in engineering, in design, and life in general. When something isn’t working quite right – we add a new layer of complexity to “fix” the problem.

It’s an issue I see all over trading strategies.

Trader Simpler

Something isn’t performing as it should, so – what do we need? Another piece of technical analysis? Another indicator?

And before you know it, our charts look like a dyslexic spider’s homework.

And our trading strategy has more conditions than an EU directive.

In principle, there’s nothing wrong with complex systems – they can work very well. But a complex system is, well …, … complex. Which makes it cumbersome and hard work to manage.

And if we’re spending all our time checking different charts and measuring technical data … it becomes very difficult to keep track of our results to evaluate what’s working (and what isn’t). When traders get bogged down like this – is exactly when they blindly steer their trading accounts over a cliff edge!

So, when you look to improve your trading, don’t ask what you need to add to it – instead ask what you can take away. This is a call to clear the decks and cut back on the time you spend with technical analysis – it’s time that can be put to much better use in improving your risk profile.

Trade less

There’s no doubt that day trading is fun and dynamic. It gives traders instant gratification. And there’s always another trading opportunity around the corner …

But day trading is also the most difficult, challenging and down-right dangerous trading styles we can follow. For all the reasons I’ve listed above …

– It’s fun and dynamic (sounds impulsive)
– It gives instant gratification (aren’t we meant to be looking at long-term goals?)
– There’s always another trading opportunity around the corner (aren’t we meant to be trading less, not more?)

Don’t get me wrong – I day trade myself. But over the past year, I’ve seriously cut back on the number of day trades I make, and have taken much more interest in position trading in general (and HAV Trading in particular). In trading, it pays to be mean with your money, and mean with the trades you’re prepared to take. Most of us are guilty of overtrading – less is definitely more.

Trading is a business – don’t think of it as a weekend trip to Las Vegas, where you have to test out every slot machine and gaming table! Wait for the best opportunities to come along – and then pounce.

Related posts:

Why you can’t rely on technicals Don’t make the same mistake as me