One of the biggest problems traders face is information overload. There is just so much data to crunch these days that it’s easy to become overwhelmed. Coupled with ever changing strategies, and it’s easy to see how confusion can strike.
We all know that the market is constantly changing, and that we need to adapt our strategies constantly to stay ahead of the pack. Coupled with this however is the fact that we should never change too many things at once.
Something that one should integrate into their trading early on is foundation practices that will span all strategies and setups. Chart elements and behaviours that will not change from strategy to strategy, and will become a familiar bedrock for you to work on.
Something you should look to do is use generic indicators to simplify the information you process. You need to be ruthless about this. Find ways constantly to make your charts more efficient.
Use color to convey information where you would usually use text. We humans process graphical information infinitely better than text. As an example, if you trade at certain times of the day only, then use a background coloring indicator to highlight the background of your chart at these times. This is way more effective that looking at the time axis.
Another area of optimization is the use of sound. This is especially effective for processing events. Need to know when a new 30 minute bar starts, or when a signal fires? Use an audio alert.
Reduce the number of indicators you actually have to look at. Find ways to combine two indicators into one. If you have multiple entry filters, combine them into one easy to read graphic.
Always look for way to simplify. And focus on methods that can generically be used with any of your strategies. Whether you’re using pivots, crossovers, divergence or whatever, the principles above can all be used to make your day to day trading easier on the brain.
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