• : February 21, 2021
  • : B. Krishnakumar

Are You Still Looking for That New Scanner or Indicator?

We have discussed this topic on numerous occasions, and it does not hurt if we take it up again. This is an important post and majority of us are guilty of looking around for fresh ideas or that secret scanner or new indicator. If you are in this camp that is always looking for newer concepts, then it a sign that you have not yet discovered a method that suits your belief system or trading style.

This powerful quote from Van Tharp is extremely important in this context.

Everyone one of us are unique in terms of our belief about markets and our trading style should match this belief system. If you are someone who believes in trading on pull backs, then you should develop a set of rules that helps your trade pull backs. There is no point trying to trade breakouts. If you do so, you will not stick to the system and you will always be hunting for something new.

There are several ways or trading styles to make money in the markets. You can be a:
  • Breakout trader
  • Pull back trader
  • Counter trend or mean reversion trader
  • Neutral strategy trader
  • Pair trader
  • Instrument trader
  • Pattern trader
Within the broad category listed above, there is this element of time frames. This again is crucial. You can be an intra-day trader or positional trader. Within positional, the holding time frame can vary from few days to weeks to months.

In each of the above styles, you can make money using any tool or charting method. Every tool has something unique and try to understand that and leverage that to suit your style. For example, you can use a candlestick, Point & Figure, Renko, Line-break, Kagi or any other charting method to make money in any of the trading styles listed above.

But what is essential is to find out your belief system, your style, and your time frame. Once you cross this first hurdle, you can pick any charting style and tools to suit this first requirement.

If everything is sorted out and when you start making money consistently, you will stop looking around for fresh concepts, new indicators, or charting method. This is because you have started making money and you no longer need fresh tools. Your focus will gradually shift towards improving your system to enhance your profits.

If you are not yet there, then stop the search and address the core problem of who you are as a trader and what is your belief or style.

Next week, I will share my personal experience and journey which would be interesting.