By Rob Colville on January 4, 2018 in
Have you ever heard of the idea that, when you want something a huge amount, you’re less likely to get it? The more you want it, the harder it is to get – because, so they say, you’re not allowing the powers that be to work as they should. You’re trying to manipulate the world around you to make your end goal fall into your lap. In trading, that’s as true – if not more so – as anywhere else. So it’s important to remember that less is more in trading, and that if you’re desperate to make money from it, you’re doing it wrong.
Understanding that less is more in trading and keeping that in mind should help you to stop over-trading, and that in turn will help you to stop losing money. Trading is filled with virtually infinite numbers of trades that look good but that don’t really match up to your plan. If you’re desperate to make trading work for you, you might be tempted to put those trades on anyway, even if you know deep down that they won’t be any good for you in the end. This kind of temptation is much easier to control when you know that you’ll make more profit by putting fewer trades on, and not risk losing everything by trading on pretty much everything you see.
When it comes to understanding the concept of less is more in trading, it’s essential that you don’t just think about the trades and the money. Yes, they are important, of course, but the less is more theory can also extend to time. If you are sitting in front of the trading screen for hours at a time, or even if you have it running in the background and you keep taking a look at it, then you will once again be tempted to over-trade, to make bad choices, and to waste time. The point of being able to trade for just a few minutes a day, and to ‘set and forget’ is that you get to spend more time with your family, or doing things you want to do. It’s so that you can still work full time and get some extra money coming in when things work out well. It’s not about staring at the trades and watching them as they rise and fall. That’s why less is more in trading.
Being successful when Forex trading is about discipline. Sticking to your rule that less is more in trading is a form of discipline. So is keeping to your agreed budget, and only trading when the trades really do work for you. Make your own rules, but make sure that they make sense. Your rules may not work for everyone, but as long as they work for you, that’s what matters. So what could your rules be? Why not decide that you will only check your charts once a day, and at a specific time? That’s a great way to start. And – and this one is possibly the most difficult of all – if you lose (whether it’s a big loss or a small one) don’t hurry to put a new trade on. Having fewer good trades is better than having many bad ones – less is more in trading.