KISS your way to Forex freedom

KISS your way to Forex Freedom –

Being a widely used acronym, the K.I.S.S. principle, if used correctly, can be used by FX traders for consistent success. K.I.S.S. stands for Keep It Simple Stupid. Although we’re not saying traders are stupid, the keep it simple part of the acronym is a beneficial principle to follow.

Trading need not be as complicated or frustrating as many make it. It can be said that a trader’s best friend is simplicity. A simple approach is often the most effective approach, generally leading to successful and consistent trading.

Many traders fall into the trap of over analyzing and complicating the markets with complex indicators and strategies. Apart from trading blind (no analysis/gambling), price action trading is one of, if not the most, simple ways to approach and trade the markets. Price action trading consists of the trader using the most basic aspects of trading; The Price. No lagging indicators or complex mathematical formulas are used to predict the markets next move. The trader simply uses the only real information they need to successfully trade; The Price.

By conducing simple analysis of what is currently happening in the markets, the trader can react to these price changes by either, placing a trade, or deciding to sit on his or her hands (often the best trades!) and waiting for the next set up.

The KISS principle does not only relate to analysis and trading, but can and should be applied to the traders overall approach to the FX market. A simplistic approach should be applied to the traders: forex plan, money management and trading psychology.

A simple forex trading plan comprises of basic but critical rules the trader follows in order for successful trading. The traders plan includes, the rules they follow for entering and exiting the market (their system/strategy), along with how much they are prepared to risk in order to find out if the market movies in their direction. Successful traders always have a hard copy of their trading plan with them at all times while analyzing/trading the markets. Their simple approach reminds them that their plan can quite easily be lost if its ‘stuck in their head somewhere’, whereas keeping a hard copy in a visible location is hard to dismiss. The traders plan should be simple yet effective or short and sweet cutting out needless information and noise.

Trading psychology is possibly the most important aspect that determines a trader’s long term success. A simple psychological approach requires the trader to trade without emotion. Leaving his or her emotions at the door is easier said than done, however once a simple approach is applied to this important aspect of trading, a traders longevity is often improved.

Physically kissing your way to forex freedom is impossible, however remembering to follow the K.I.S.S. principle while trading can dramatically improve a trader’s success. Novice traders often find themselves engulfed in the newest system, or EA to hit the market, constantly switching from one idea to the next, painstakingly searching for the ‘holy grail’ of trading. Unfortunately they soon realize there is no such thing and their constant impatience leads only one way… failure. A simplistic approach may sound like a boring way to trade to some people, however, to the lucky few traders who consistently make money the KISS principle is their ‘holy grail’.

Albert Einstein once said ‘’Make everything as simple as possible, but not simpler’’. Although he was not a trader, I’m sure you’d agree he was a pretty smart guy…

Article by vantage-fx.com