As traders, we are required to take decisive action. This is where having a written trading plan will help us to make those rapid decisions when the market conditions set up in our favor.

This is why I say you shouldn't need a GPS to place a trade. If you try and make it too complicated, you will obviously not be able to place your trades quickly. Too many confirmations, chart setups and indicators will make you feel like you are lost while driving in a big city with no idea of where you are, or worse, where you need to go.

Many traders start out on a simulator platform (paper trading) before committing their capital to the markets. This is perfectly acceptable to do and highly encouraged. While in this practice mode, the trader is honing their skills on following their trading plan and working on good order execution. One vital element is missing, however; we don't have any risk in the game (real capital) and this is where live trading is much different than simulated trading. Once we put our hard-earned capital on the line, we find it harder to make good trading decisions consistently. Human nature also comes into play; we don't like risk and we will try and avoid it at all cost. Novice traders will often deal with this risk by over-thinking and or over-analyzing the markets before they place a trade.

As instructors, we see all kinds of workspaces in class created by students who feel they need multiple indicators to make a trading decision. There appears to be a sense that each of these indicators are showing the student something different where in reality most of them are very closely correlated to one another. Usually a screen shot like Figure 1 is the result of somebody looking for the Holy Grail trading system.

We have all been at the point where we study the markets too much thinking we are overlooking something. This usually leads to mistakes due to paralysis by analysis. This over-thinking is not necessary to be a successful trader. You're much better off taking the trade setup, implementing a few simple rules and then accepting the results ñ win or lose.

Perhaps we need to employ the K.I.S.S principle for our trading ñ Keep it Simple Strategy. Once we have found a setup that we are comfortable with, we should just trade that setup and not let our opinions, fears or over-analyzing get in the way of successful trading.

I recently read a blog about a novice trader turned success and he shared a very important analogy that I thought would be beneficial to other traders, novice and pro alike.

Novice traders should approach trading seeking the right mindset first, not trying to conquer every indicator, chart pattern, trading system, etc. After all the years the markets have been around, if there was this Holy Grail system out there, somebody would have found it by now. This means you need to focus on a core strategy first which will keep you mentally focused on the market.

Many people have experienced this in life I am sure. As youngsters, we tend to find things to do that we seem to master easily and make us look stronger or smarter than we really are. For some, it is spending endless days playing video games as kids, thinking that for each quarter we pour into that slot, we are becoming masters. The trader posting this blog mentions how he spent days and weeks perfecting moves on this arcade game called Karate Champ. If there was a move for the animated fighter in the game to do, then this trader would practice every one of them ñ punches, jumping kicks, roundhouse kicks, front flips over your opponent... you get the point. He felt he had mastered this machine and was ready to take on other opponents. This is similar to how a trader practices on a simulator first and then goes to live trading. Hopefully, you did not hurt yourself with front flips while simulating trading.

Our young trader friend was practicing on his Karate Champ machine one day when along came a kid a little older than him. Now I am not saying age is a sign of experience, but perhaps this other kid had figured out the K.I.S.S. principal. The young trader, with all of his 11 year old testosterone, challenged the older kid to a match on the video game. He figured with all the special moves he knew that this would be a very easy match and he would walk away a proud little guy. As the match began, the young trader would throw several of his specialty punches and the older kid would calmly block each one as if no effort was required on his part. With each block the older kid threw, he would then kick our young trader in the stomach. This move the older kid was using is one of the first basic moves you use in martial arts, the front kick. As we know from all the Bruce Lee movies, there are numerous moves one can make in martial arts, but the front kick was the simplest one. Now our young trader is getting very frustrated because all this older kid did was use this one basic move. How could this be? He had practiced and felt like he had mastered every move making him unbeatable. No matter what he did, this kid just kept using that one basic simple move over and over and eventually beat our young trader.

Your trading can be the same way. Your goal should not be to learn all the fancy moves; the point is to win. This goal can become easier to obtain if you simply take one kind of setup, as long as it has some kind of statistical edge, and master it.

Once you master this basic move, you will view the markets in a different way. All of a sudden you are patiently waiting for this one basic setup to appear. Otherwise, you are sitting on your hands doing nothing and anything the market does otherwise is irrelevant to you. Remember all the times when you were bored because you did not have a trade to take? I can bet you took some other trade based on other indicators or setups that were not part of your plan. Our young trader learned to wait for your spot and when your setup happens, kick it in the stomach.

If you continue in your quest for the Holy Grail, you will soon find as every other trader who has gone down that path, it simply does not exist. With just a basic strategy, you can control your risk better by only taking those basic setups that appear and place a higher probability of success on your side.

As your trading career advances you can add more kicks, punches and flips. As you become more experienced, you can tell the difference between what will help and what will not. Novice traders are vulnerable to looking for these "can't lose" strategies. The sooner you accept that trading is a probability business, then the sooner you will be able to accept the small losses that are inevitable in trading.

Wow, what a powerful statement! Can you see the benefits of keeping your trading simple? Just imagine if you had a very basic setup you were looking for and would patiently wait for it and then proceed to trade instead of chasing the markets every time you see a big red or green candle pop up because you felt like you were missing the move. At Online Trading Academy, we pride ourselves in showing you a rule-based core strategy that would certainly meet the K.I.S.S principal.

"There can be no better exercise for strengthening the heart than reaching down and lifting people up." Gibson Publishing