In order to learn a new way of doing something, to truly master it, we need to leave any preconceived notions and biases behind. When learning a new trading strategy, it’s absolutely crucial that you ‘wipe the slate clean’ of the previous methods and systems you’ve tried (which obviously haven’t worked). This might mean you need to make a conscious effort to ‘unlearn’ certain trading methods and ideas that you have learned up to this point in your trading career. If you don’t, you’ll end up combining them with price action and trying to come up with some ‘hybrid’ trading method, and in my opinion this is usually a very bad idea.
Did you ever stop and think that maybe most of what you’ve learned about trading up to this point is just wrong? Most people feel a blanket of comfort from knowledge, but what if it’s the wrong knowledge?
Einstein is famously credited with stating that the definition of insanity is “Doing the same thing over and over again and expecting a different result”. If what you’ve been doing in the market hasn’t been working, it’s probably time to try something different. However, if you’re going to commit to that, you need to let go of what you’ve previously learned about trading and dive in head-first to a new approach…
Stop trying to combine different trading methods…
Is your trading approach beginning to look more and more like a collage of different methods, systems and forex indicators? If you sat down a 7-year old kid in front of the charts and tried explaining your trading approach to them, would they grasp it or would they be utterly confused? Your trading approach for entering and exiting the market should be simple enough that any non-trader, or even a kid, could understand it. If you’re combining a multitude of trading methods together, it’s likely that YOU don’t even understand what you’re looking for in the market, and you obviously can’t develop a profitable trading edge if you aren’t even sure what you’re trading strategy is.
Over-complicating the trading process is one of the biggest reasons why such a high-percentage of traders fail over the long-run. My own trading journey began by trying to patch together various methods and believing that the more strategies I learned, the better I would do. But, I quickly realized that trying to create some ‘hybrid’ of different trading methods was doing me far more harm than good, and that led me to wipe the slate clean and start trading with a pure price action only chart. This was probably ‘thee’ turning point in my trading journey.
You may need to take a ‘leap of faith’…
I know that it can be a ‘leap of faith’ when you start learning a new trading method, system or from a ‘guru’. But if you’re going to learn a new method, you need to do exactly that; take a leap of faith and either trust the method being taught, or don’t learn it at all. You wouldn’t want to insult a new mentor’s or author’s efforts to help you by combining something else you’ve learned elsewhere with what they are trying to teach you. This is not fair to you, the method, or the teacher. Remember; just because you read about a different method, indicator or system and understand it, doesn’t meant it will work for you in real-world trading.
You need to either commit to one strategy or the other, but you definitely don’t want to combine multiple methods together. I read emails from beginning traders who are trying to combine such silly ‘methods’ as astrological planet alignment, Gann lines, Elliot Wave together with my price action strategies, and somehow they think this is a good idea! It’s outrageous, to say the least. But, sadly, most people make this mistake at least for a while…until they realize it isn’t working for them.
Thus, to really have a good chance at becoming a skilled and successful price action trader, you need to truly wipe the slate clean and start fresh. If you’re bringing over your fancy trend lines, elliot waves, Ichimoku Clouds, macd’s, stochastics, etc.
Admitting defeat can be the first step to success
Sometimes in trading and in life, we need to admit defeat to move on and make real progress. Clearly, if you’re learning something new, it stands to reason that the previous lot of knowledge on how to trade didn’t really work for you. Therefore, it’s time to let go and wipe the slate clean.
The bottom line is, every trading author, mentor or coach out there has their own way of doing things, and sadly, most of the time they are full of ‘hot air’ and have no idea how the market works or how to trade it successfully.
Therefore, I say this to you: Let go of what you know, because statistically speaking, it’s probably bad information and will give you bad knowledge. There is an old cliché about “any knowledge is good knowledge”, but I disagree with this. In fact, bad knowledge as it relates to trading is destructive, both mentally and financially. When it comes to trading, what you need is honest, frank, simple instruction on how to trade with the raw price action in the market.