More On Less is More…
In case you’ve missed it, I’ve been talking about trading strategies and the various different components of a strategy. The first of these was on trading methods or how do you find tradable opportunities. I talk about how all trading methods eventually fail because a method takes advantage particular market conditions. When the conditions exist, then the method should easily find tradable opportunities. When the market doesn’t cooperate is when methods typically fail.
Now this doesn’t mean that the method is flawed (I’m assuming that the method has been thoroughly tested and is proven viable). It just means that the market isn’t right for the method. The simple way of handling this is to wait for the market to change so that the method will work. It’s the simple answer but the execution is anything but simple.
When I propose this solution to a client, I’m often met with the rebuttal, “well I just need a method for this particular market.” As if more methods will lead to more opportunities and therefore, by extraction, more money. We come by this philosophy quite naturally in the industrialized world of the 21st century. I’m here to say that more isn’t more.
I wrote about this last month. What I’d like to share with you is a entertaining and informative talk sponsored by TEDGlobal 2005 by psychologist Barry Schwartz on The Paradox of Choice. When you listen to Barry speak, replace his obsession of blue jeans with trading methods and you’ll get the point. Enjoy.