Trade The Journey

Trade The Journey

Too Much Information

Top of the Afternoon.

Hopefully, all is well, and you are progressing during these challenging times. During these times, it’s challenging to know what to focus on and what to ignore. Every soundbite has the potential to move markets.

Some of the soundbites are warning signs; others are just other news items designed to distract the public. Most events have a week-long cycle soon forgotten as a new emergency emerges. That’s okay if you have a good memory but terrible if your dependant on the news stations from week to week.

Whatever the popular news event is, you’ll be thinking and talking about it without a reference to gauge its importance.

I’m not disregarding the news as a needed outlet for information; I’m merely reminding myself that “due-diligence” is essential. Remembering events is important, but tying events together even more so.

Unbiased opinions are difficult to find, so we must collect the information and decide for ourselves what to conclude and what to disregard. I’m a big fan of reading and digesting the information as opposed to watching the news.

At the end of each news segment come the commercials which hold your attention long enough to minimize any critical thinking that might have taken place during the news break. Some of you may not have time to read and digest articles, so I would recommend setting aside some time to complete critical thinking on the major news events weekly.

If it sounds like a lot of extra work, that’s because it is! One of the harsh realities about life is that you have to put in the extra work if you want something different than the norm.

The title of the post is too much information. Is there such a thing?

I believe there is. I happen to be one of those people who loves to research and analyze. Analyzing a situation means creating multiple scenarios that forecast a likely outcome. Trading offers an opportunity for this kind of skill to be beneficial.

This sort of skill is beneficial for swing or position trading but not day trading or scalping. The latter requires quick thinking and decision-making. Your timeframe should match your decision-making skills. While I think scalping is a needed skill, it isn’t for everyone.

Although I enjoy the excitement of scalping, I naturally drift towards swing trading.

One of the challenging aspects of trading is that the amount of information you have is irrelevant. What matters is how you apply the information.

Applying the information under pressure is another skill that the best traders master. A lot of times, I get caught in the abundance of information available on the internet. My eyes light up when I see a new video released from my favorite trader.

I would akin this process to the voyage for sunken treasure. You have a map, and all you have to do is follow it to a destination. The problem with this process is that money and time are on the line. One is replenishable, the other is gone forever.

Learning to master the information before you is now a principle of mine. Watching the same training videos and reading the same material every day can be repetitive and cumbersome. However, learning the nuances of the information conveyed can mean the difference between profitability and experience. Experience representing the trade was a loss.

After learning the nuances, it takes dedicated practice to recognize and apply the information in the market. Remember, you are competing against the best and brightest minds to earn a profit. If you want to be the best you have to be obsessed.

It takes time to develop trader intuition, and it doesn’t happen overnight. Too much information can impede your progress if you allow it to change your strategy for trading regularly. You’ll never develop an understanding of the nuances of your trading strategy and psychology.

I’m not saying to stop searching; I am saying it’s okay to stop acquiring. This lesson could also be applied to overtrading.

Patience in trading doesn’t equate with the speed in which both information and trading take place. It can be alluring to want to be involved.

However, the best trades happen at the right time, and when you’re ready, the information you need will appear at the right time.

This past week in Review:

Dipping into my savings will be short-lived as I’ll receive a lift in income in the coming months. I’m thankful that I was able to save because it helped me weather the storm. It’s hard to picture yourself in the future, needing assistance because most of us tend to be optimistic.

I’ll buy this on credit or splurge on this purchase because I’ll be able to cover with the next paycheck, deal, or trade. This strategy works until it doesn’t. Soon you’re sliding down a slippery slope that most become trapped.

It’s a debilitating cycle of debt and a lifetime of needing to work to cover last week’s and month’s purchases. Being that this is the first time I’ve been prepared for a rainy day, I can’t explain what a relief it has been. This experience has encouraged me to live below my means to remain prepared for both opportunities and challenges.

This past week deserves the grade of a “B” for continued improvement and understanding.

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