do we sometimes overcomplicate things and "see" patterns that aren't really there?

[Car Key Boi]

do we sometimes overcomplicate things and "see" patterns that aren't really there?

i know i sometimes do this when i'm looking at a bunch of fundamental data or reading a news item regarding a stock

just been reading some of the TA threads and i'm thinking perhaps some of the TA Bois (& Gurls) do the same

yuo can take a chart for any stock and place a bunch of indicators on it, super impose other stuff on it, invert the chart, reverse the chart, and come up with a gazzilion different takes on it

i was playing golf this weekend with a buddy who's in his late 30's now. He used to be a low handicapper when he was in his early 20's but now he plays of 26. He still has a sweet swing and the decline has been in his putting, not his tee to green play. A decade ago he would spend 30 seconds lining up a putt. He would look at the putt and think "okay, that's got a slight left to right break of a few inches, let's go for it"

ten years on, faced with the exact same putt, he takes forever to line it up

he now 'sees' every little borrow and blade of grass that's out of place and adjusts his aim accordingly and more often than not he misses the putt

i just wonder sometimes if we do the same when it comes to trading, we overcomplicate it and 'see' things that aren't really there or relevent

what do YUO think?

- Car Key Boi

 

[marky]

Hi Car Key Boi

I couldn't agree more i think we have all been there to much research and to many indicators and all you do is Tye yourself in a knot my conclusion is look for simple patterns and a trend line break and take what the market gives you .

Regards mark

 

[rossored]

Agreed, but then I think there are some indicators that are more reliable than others - CCI and ADX for example are two that I find consistently reliable. I used to watch MACD and dabbled with stochastics for a short time before I lost confidence in what it was telling me (read "lost money").

Personally, I find running with more than two a complete pain in the backside anyway. One will always contradict another in some way or form, which might just prevent you putting that winning trade on in the first place. This is almost what I think Newt is getting at on his thread.

However, many of the leading traders subscribe to the KISS theory. I'm beginning to think it's the best one.

 

[Finlayson]

This is completely true, one of the secrets to success in trading I believe is simplicity. the only way to be successful is to get the odds in your favour, get your R:R right & then get into a winning loop , by that I mean consistent trading.

I have done it, just like many others I expect.........u over-analyse, searching for repeatable patterns( apart from the obvious), but no 2 days r ever the same so it is just a never ending exercise & u just overload yourself with info.

failure of our strategy to throw up a trade also causes us to do this , especially when there is a large move.......we go searching for indicators that would have got us into that move..........rather than just being patient & waiting for our strategy to give us another opportunity.

after all we dont need them all !!.........we just need to be consistent .

some people might disagree , but I think this is in our nature & it is 1 of the things we have to overcome to be successful.

I know I have done it & still have to fight against over-analysing.

simplicity, consistency & a bit of flexability......

Jay

 

[bertie]

KISS

hi rossored......excuse my ignorance but what is the KISS theory?........

 

[rossored]

A good one...

Keep
It
Simple
Stupid

:cheesy:

 

[bertie]

KISS

damn....and there was i thinking it involved consulting gene simmons!!!....

 

[marky]

Im constantly learning , advanced novice i would say simplicity i think is the the key along with patience i found i was doing 30 trades a day when when i converted to real time now its 1 to 5 as i wait for the set up and use few tools by being patience im getting it right most of the time i was told by a good trader it takes time to find your time frame and find your tools your most comfortable with.
Regards mark

 

[Skimbleshanks]

Agreed Marky. Few, however, are prepared to accept that trading takes time, and lots of it. The Internet just speeded everything up ... but only order execution and the availability of knowledge. It cannot speed up the time it takes you to find your niche, and make it nice and comfy.

 

[JonnyT]

Anyone else see that Buy Sainsburys signal in JayGEs post?

Stare at the post for 20 seconds and I'm pretty sure you will see it.

JonnyT

 

[Finlayson]

JonnyT

missed that one!!

Jay

 

[CityTrader]

Car key boi... like the old adage.." sometimes you can't see the wood for the trees"
Personally one way I over complicate an idea, is to ask a few other guys ( market makers, brokers, other punters, etc) what they think of it ( market, individual stock) and invariably, all I hear is enough static to put me off, what inevitably would have been a winning trade..

Wayno

 

[Trader333]

Jay,

What is R:R ?

Cheers


Paul

 

[Simon]

Risk:Reward, presumably.

 

[Finlayson]

Hi Paul

yes sorry, by R:R I meant Risk:Reward

Jay

 

[eminem]

Sh1te!! Bought Rolls Royce on the strength of that tip