It is a vast global network, incorporating hundreds of different currencies in markets that rarely close and that contribute trillions of dollars worth of trading every day. But despite all the inherent complexities, it may surprise you to know that most people trading forex successfully actually try to keeps things very simple. Most traders initially believe that by making their systems increasingly complicated, they are making positive steps to improve their trading in an attempt to out smart the rest of the world.
A K.I.S.S trader realizes that the most profitable trades are often those that are the simplest to spot. This type of forex trader recognizes that despite its simplicity, it is the smartest type of trade because it produces the greatest profits. The forex trader who adheres to this principle must be aware that it does not mean throwing out all the technical analysis and indicators but to simply (as it says) keep it stupid simple.
The K.I.S.S method as it relates to forex trading, is built upon an understanding that the best way to navigate the market is by learning to interpret and trade the raw price action signals that form naturally in the market. By trying to force a set of strict indicator based trading rules around the unbounded arena of financial markets, many traders unknowingly make trading infinitely more complicated and difficult than it ever needs to be.
Once you accept the fact that chart analysis does not have to be difficult, it will help you to focus more clearly on the more difficult aspects of trading like remaining disciplined and managing your risk properly. Don’t be like the legions of other traders out there who waste a massive amount of time and money trying to figure out what a mess of different indicators and trading robots are trying to tell them. Learn to analyze the raw price action that the market naturally provides you with and you will be much further along the path to trading success than people trying to trade on charts like the one above.
A K.I.S.S trader learns to respond rather than react. If price is going up, it is going up and that is that. Go with it and continue with it until it stops going up. A professional trader is constantly learning and testing new trading techniques. A good lesson is that the more sophisticated the techniques, the worse the results may be. Using complex fundamental analysis, quantitative algorithms and many varying technical indicators all at once in their trading methods usually ends with the same result - losing money! This is where K.I.S.S traders usually have the advantage and the most profitable trades as they have the ability to spot the simplest trades.