What we have to learn.
No man or system on earth can ever predict future course of market. If someone tells you beware of them.
Simplicity is the key. Complicated systems are probably trying to baffle you into parting your hard earned money and baffles brains as well.
We are aware that systems have three important components.
1. Trade Entry/Exit Rules.
2. Money Management.
3. Trader Psychology.
Ask the traders to put them in order of preference. 95% of traders put them in above order.
The correct order should be:-
1. Trader Psychology. Most traders are sucked into trading with an intent of getting rich quick or wish to make money in the markets with no effort. Then they wonder why their account is sinking faster than Titanic. They jump into markets with little or no knowledge of market dynamics and expect to compete with big wigs. If you enter into stock market with no education you are treating it as a gamble. If you gain required education, test it, and adopt it to the market dynamics, then you are treating it as business. Guess who makes money? Gamblers or business people? Choice is yours. It is no different with stock markets.
2. Money Management. We could trade solely on money management rules and come out ahead. We should spend most of our time in honing the skills in this area. It helps to adopt business like approach to the trading. It is no surprise our life and trading improves dramatically.
3. Trade System. It is always better to have simple systems which we understand and implement. They may require little tweaks now and then. There is no holy grail, if it does donot tell me! I donot want to waste my time in search of holy grails any more.
