Trading Does Not Have ToBe Complex

Trading Does Not Have ToBe Complex

A common trader’s mentality would be to put in many tools and indicators on his technical chart on the automated trading robot. A typical technical chart would have the candlestick charts, Bollinger bands, pivot points, volume chart, stochastic indicator, ATR etc.

If you look closely then at least 75% of the indicators that you may have on your technical chart would have the same setup. Someone who is new to this would find it complex and be totally confused seeing so many things that are going on here.

Each element seems to have some insight that it gives to the trades. Along with that it also does something else. The trader is made to believe that trading is complex but he now feels that he is totally in control of the stock because he has all the insights that he needs to trade.

In trading terms, it is known as the illusion of control.

Illusion of control

The illusion of control is the biggest bias that the technical traders have to deal with. They are those who give away confident statements about the stocks.

Traders look at the charts which are made to look complex and they try to make some sense out of it. The market is complicated and the trader thinks that one thing that can fight the market is a complex chart analysis. And the trader thinks that he is the only one who can make any sense of the market.

This is a psychological effect in the market and all honestly does not work.

You cannot control the outcome

No matter if you put all the indicators on the chart and try to analyze each one of them, you will still not be able to control the outcomes. Their are many outcomes that are possible for the same situation and you do not have any control over them.

The only way that you can trade even after that is to focus your attention on the stats and the results. You just have to work around the odds. When you understand that your analysis is just a game of probability you will be able to trade truthfully and not get carried away.

When trading, it is best to keep the things simple and to throw away all the noise. Noise creates biasedness and this could alter your trading decision. When done this way you can trade without any biases.

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