I have to admit, I am somewhat of a minimalist trader.
After one too many angst-ridden dissections after a period of poor trading performance, I deleted all my indicators in a fit of fury and they never returned. My charts are now free of all superfluous information and I trade on price action alone. But this post is not a celebration of naked (no indicator) trading, although I could rave all day about the clarity this simplified approach has given me.
I’m not saying you need to delete all your indicators as I have done. There are as many styles of trading as there are traders. I’m just saying don’t be afraid to get rid of superfluous information on your charts and don’t be afraid to simplify your trading methodology. Simple means different things to different traders, but most of us would say there is always room to further simplify our trading strategy.
One of my favourite quotes about simplification is by Hans Hofmann, who stated that "the ability to simplify means to eliminate the necessary so that the necessary may speak".
Although he was an artist, this could have been written for trading with simple charts! How often do you see a chart so covered in indicators that you can hardly see the price action underneath. If we followed Hans Hofmann's advice, we might see that deleting some of those indicators allows the price to speak and we would see more clearly what is going on in the markets.
The simplification of our trading method brings clarity to our trading mindset and this extends to the rest of our life. But it's even more exciting than that, it also works the other way around.
Simplification of our life in general brings clarity to our trading.
Decluttering our external world brings about positive decluttering of our internal world. This can have an amazing effect on our trading mindset. The less cluttered our internal world, the more clearly we can see what’s going on when we interact with the markets.
We don't necessarily need to Marie Condo everything in our possession, but a little extra thought about our environment can make a real difference to how calm we are when we interact with the markets. This isn't just some vague idea - minimalism has been studied extensively and science backs up its benefits in many areas of our lives, from relationships to health to financial wellbeing. Here is a list of 7 benefits of minimalism backed by research, but what better way to test this theory than by giving it a go?
Yogis the world over will no doubt have heard the expression “let go of that which no longer serves you” and this is a great starting point if you are a bit stuck on knowing what to keep and what to get rid of.
Is that email subscription to traderX’s stock picks serving you? Is it helping you become more effective in spotting potential trades or do you find you often end up getting grumpy and unsure of yourself as you disagree with his analysis? Is your Twitter feed getting so busy that you start going around in circles and second-guessing your own analysis? Are your visits to Facebook leaving you depressed at all the negativity posted by those you follow? Maybe it's time for a clear out. There are plenty of options. You could unfollow, mute or block accounts, or simply temporarily deactiviate your account for a set period of time and see if you notice a difference in your stress levels.
How about your workstation? Do all those monitors improve your trading or do you find the extra information causes you additional stress? Did you once see a picture of a successful trader surrounded with screens and automatically assume you needed the same in order to succeed in making money in the markets? Is you desk piled high with papers, old coffee cups and post-in notes? Could everything do with a dust down and freshen up?
If you really want to let your imagination fly, have a look at some of the beautiful workstation and office ideas that others have developed and imagine yourself building a similar environment for your trading. Somewhere where you can be calm, focussed and positive when you sit down to study the charts.
Decluttering your trading workspace can be a cathartic, not to mention profitable endeavour, but don’t stop there!
If you have felt any improvement to your mental state after a small clear-out you might be itching to extend the spring-clean to the rest of your life. Don’t for a moment think this will have no bearing on your trading. Far from it.
Whatever the extent of your decluttering, just getting rid of the unnecessary stuff that adds to our internal mental noise is a simple, tangible thing we can do to increase our trading clarity and improve our lives at the same time.
This is something productive we can do when there is nothing going on in the markets. Do you ever get frustrated when there are no trading opportunities, so stare at the screen, get bored, and maybe even - god forbid - start overtrading? Well getting rid of stuff can be one of our go-to activities when there are no trading opportunities. Along with going for a run or walk, or making something good to eat, having a clear out can be a default activity when there's nothing doing in the markets.
If we know that getting rid of stuff will improve our bottom line over the long-term, it is easy to see that it is a much better use of our time than just staring at the screen and forcing a sub-optimal trade.
So, why not give it a go? Start small and once you get into it, you might find it becomes an enjoyable cathartic refresh of your mind and environment that increases your mental clarity and makes you a better trader.
Have you found decluttering to be a powerful tool in developing a clearer trading mindset?