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As my own skills improve over time, I have noticed a very interesting trend amongst my clients: The more I simplify and boil things down to the essence, the more they try to complicate things!

In the past, this was never an issue, as several factors had to be considered and new clients were suitably impressed with how intricate the markets are. However, once these factors were simplified to their very essence, traders began to doubt that it really could be so straightforward (which is not to say easy).

Trading comes down to this:

1. Pick the direction of the market or instrument you wish to trade.
2. Avoid instruments that aren’t giving clear signals.
3. Choose the price or location that you wish to trade at.
4. Wait for confirmation.
5. Trade manage and control risk.

It really isn’t that difficult. What shocks traders is that it can be that simple. Increasingly, I see clients scramble to add seasoning to the methods they are being taught without even assessing the original method. “What about this? What about that? Do you consider that?” The answer is, “If it’s not in the rules, I don’t consider it. If I thought it was worth considering, it would already be in the rules, don’t you think?”

The response to this response is usually another email that says, “Okay, thanks. What about this then?” ARGH!

That said, I can understand – if I had been shown how simple it was when I was a newbie, I would probably have done the exact same thing: Try to complicate matters! Instead, I took years to boil down all the complexities.

Moral of the story: Don’t complicate the trading rules you paid to learn before you even learn them.

Perhaps giving the very essence away immediately is not helpful, even if it is the most profitable way to trade. Some of my more experienced clients think that I should complicate matters to impress newbies, and that I should make them do more hard work starting from basics. What do you think?

With best wishes for your trading,

Kaye Lee
Private Fund Trader/Head Trader Consultant
“We take your trading seriously. You should too. Make It Pay.” 
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