When many people think of traders, their mind immediately goes to either men on the floor wearing multi-coloured jackets or the Gordon Gecko look we all loved from Wall Street. Who can blame them, wouldn’t we all like to wear red braces and earn millions like Michael Douglas in that classic? However, in this day and age, the reality of trading can be very different.
Whilst professional traders working for major banks and investment firms may have four, five or six screens to stare at featuring all kinds of charts and figures, most of the people who trade do not work for a bank, but trade for themselves. Many people trade from home, either as a hobby, a way to make a few extra dollars, or of course as a full time job. Whatever your trading goals, it can be easy to get carried away, making your task of making profit all the more complex.
When you sit down to start your trading on day one, you need to think about what you actually NEED, and not what you think you should have. The key is to become a minimalist trader. All you really need is a trading platform including access to charts and a tried and tested system. Do you need that pen and paper, the additional charting package and the second screen or are you just helping to confuse yourself? Once you have system that works, it should be easy to spot your trades and you should know how you will enter and exit every position – you should not need multiple software packages to tell you what to do!
Think of it this way – if you were away from home, could you still trade? Could you take a laptop to a coffee shop and still trade with the same level of success? This is what you should be aiming for. The simplest trading methods are usually the best and the more simple the approach you take, the less likely that you will make an incorrect trade due to confusion. In many ways, becoming a minimalist trader in terms of the equipment you use is a metaphor for the way you should try and trade.
How many chart windows do you have open? How many indicators are running on each chart? How many trades are you managing at once? Have you placed ‘set and forget’ orders? These are all important to think about. If you have 4 trades running, each on a different currency pair, which is determined by three indicators on each chart and you do not have stop losses placed for those trades, how likely do you think you will be able to trade successfully? If you just manage one or two trades at once, and you have placed the necessary pending orders, are you more likely to be successful in your approach?
So, think about your approach to trading – are you truly a minimalist trader or do you have unnecessary clutter impacting your trades?