For years I read about trading strategies, different types of charts, indicators and other tools of technical analysis. Every day there is new indicator or strategy somewhere on internet and due to human nature traders think that if strategy or indicator is complicated, and if they don't understand what does it show, it has to be something great that will for sure make profit. Process of using such indicators of strategies in probably 99% of cases ends up in one of these two scenarios:

First scenario:

  • Trader finds cool new strategy or indicator;
  • Since it looks nice with all the nice colors, and it seems complicated, and guy that invented it put screenshots
    of few profitable trades, trader decides to use it;
  • After first 5 trades using this indicator/strategy there is one profitable trade and four bad ones so trader
    concludes that this indicator/strategy doesn't work and stops using it;
  • Trader continues searching another Holy Grail strategy that will make millions in 10 days.
Second scenario:
  • Trader finds cool new strategy or indicator;
  • Since it looks nice with all the nice colors, and it seems complicated, and guy that invented it put screenshots
    of few profitable trades, trader decides to use it;
  • After first 5 trades using thisindicator/strategy 4 or all 5 trades were successful and trader made 10-20% of
    profit;
  • He is convinced that he finally found it, the system that will bring huge profit in short period of time;
  • Since it is working, he doesn't want to lose time and start risking much more and opening too big order;
  • Sooner or later there are few bad trades in a row in which almost all on account is lost;
  • Trader concludes that this indicator/strategy doesn't work and stops using it;
  • He continues searching another Holy Grail strategy that will make millions in 10 days.
Since mindset in both scenarios is the same the end result is also the same. Perhaps indicator/strategy was great, but due to the impatience trader didn't profit on it. If he had more discipline, result would definitely be better, because it can't be worse than losing all in on his account. So this is first part of secret of cusses in tradingdiscipline!

For second part of second part of secret of success we have to do little deeper in thinking about indicator and technical analysis. Can they really dramatically improve ability to predict future direction of price? After all, they are all just mathematical calculation of past price movement, so they show only what has happen before, but it is not possible to profit from past movement. To make a profit, we need to successfully predict future movement, which is lot harder to do then most people think.

Proof that it’s not so easy to predict a future is everywhere. How many times all of us found ourselves in a situation where we were sure that something will happen, but because of totally unexpected reasons it turned out we were wrong? But let’s stick to financial markets. Try to find predictions of central banks from last few years about all the things they predict (exchange rate, GDP, inflation etc.). You will see that they are probably in half of predictions totally wrong. So if institutions whose only job is to make accurate prediction about future economic developments, and has hundreds of geniuses working on it with all possible insider information, do so often fail, why so many people think that they will be able to do better with some indicator that they got for small price or even for free?

Only thing that we can predict about the future is that completely unexpected events will continue to happen (kind of paradox). And because unexpected events will continue to happen, markets will be surprised and will move a lot in those situations. That means that prices will continue to make trends. And it will be possible to profit on it even if you don't know on which side it will trend. How is that possible? Well, if you don't know will it rise or fall, but you know that it will often rise or fall sharply, you just need to make sure that when you are wrong, you lose small, and when you are correct, you earn lot. That means all you need positive RRR, 1:2, 1:3 or bigger. And that’s it; second part of secret of success is positive RRR.

So all you need is positive RRR and to be disciplined to use it all the time, with no exception.

But how to know when to enter or exit a trade? Well, since there is no way to predict future development significantly better than pure guess, you can use anything, any indicator, candle, signal provider, or even to ask your 5 year old daughter: „Hey sweetie, what do you think, will JPY rise or fall today?“ If she says it will rise, you buy it, 1 or 2% risk, SL 100 pips, TP let’s say 300, and after you open it don't touch it until it hits SL or TP, no matter if indicator give opposite signal or daughter changes her mind.

If you are disciplined to do it with no exceptions for 500 or 1000 trades, you will have high probability of making nice profit, because forces that drive markets will be the same, and law of probability will be on your side.

Secret of success is in discipline and RRR, indicators and complicated strategies can be useful, just don’t allow them to distract you from these important concepts!
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