Choose a Classic or “New” Forex Trading Strategy?
A trader is like a general on the battlefield. He must have a good strategy and really master the strategy well too.
Those of you who have been in the world of forex trading for at least 10 years certainly feel that forex trading techniques or strategies are constantly evolving. The names of new techniques or strategies have sprung up and often use unique names. Each strategy is claimed as a strategy that updates the old technique.
A friend had attended a pre-seminar on forex trading strategy where the speaker claimed that he had decades of experience in the world of forex trading. He also claimed that the strategy he was carrying was a strategy that was far more modern and sophisticated than the old school strategy which he called “old school strategy”.
“Young” traders – almost certainly – will be hypnotized by claims of ” advanced forex strategies “. It was proven later when there were so many people lining up in front of the EDC machines to swipe their credit or debit cards to pay for the supposedly sophisticated forex strategy training fees.
The question that arises then is whether the “new” forex strategy isalways better than the classic forex strategy ?
“Old school” strategy versus “modern” strategy
Actually there is no harm in creating a forex trading theory or strategy. The problem then is that there are so many people who behave as if they are very experienced and very good at forex trading and then rashly claim that he has found a new theory in trading. In fact, his experience in the world of new forex trading as long as corn.
His narrow insight and lack of knowledge then made him think that he had discovered a new forex strategy that was extraordinary. Be careful of such thoughts. If at any time you think so, try to think, “If it is as easy and great as that, why do other traders who have been struggling for decades in the trading world not find it?”
Not that you can’t innovate, no. But try to check & re-check . The goal is that you don’t get caught up in euphoria as if finding “the holy grail of trading” .
Test and test again, until you have enough data to “claim” that the forex strategy that you find is truly “road worthy”. The weakness of the new strategy is that it has no track record throughout the “old school” strategy. The only way to “equalize” a new forex strategy with the old one is to test it in a certain period, for example 3-4 years.
Older strategies may look old-fashioned and unattractive, but try to think: why does the strategy last decades and still be used by senior traders? An old school forex strategy may have gone through decades of market changes and has proven to be able to consistently provide benefits. That is why the classic remains attractive.
The “new” is not necessarily new
Around the year 2010 there was a theory that was quite “booming” on the internet (I did not want to open a polemic that drained time and energy, so I should not explicitly mention the name of his theory. In addition, because I respect the “creator” theory it is ” as a fellow trader “). With attractive packaging and delivery styles, the theory was able to resonate on the internet, so that some people had asked me directly about the theory.
In fact, after further study, all the things presented in the theory already exist in a book written by John J. Murphy in 1986 and revised in 1996. The name of the book is “Technical Analysis of the Financial Markets”.The “new” theory that I mean came about around 2010, even though Murphy’s book has been published since 1986! If that is the fact, is the “new” theory really a new theory? Of course not!
Ironically, what was predicted as a “new theory” turned out to be only a BASIC theory in Murphy’s book. And people are willing to pay dearly for training on the basic theory.
What this person does is just “wrap” the old theory with a new name.Lack of knowledge of novice traders makes the “new packaging” sell well like hotcakes. Therefore, enriching insight and knowledge is important so that we are not easily fooled by those who want to take advantage of our ignorance.
Likewise, it does not mean we have to close ourselves to the emergence of new forex strategies. All we need to do is filter every information we receive with the knowledge we have. A trade legend, Dr. Alexander Elder said, “Read, and listen to the experts, but keep a healthy disbelief about everything.” The bottom line: be critical.
If there is time, I suggest that you look for and read the book by Murphy that I mentioned above.
Bottom line: The man behind the gun
Is the forex strategy not important? Is money management alone – aided by good psychological mastery – enough for profitable forex trading ?
The answer is of course: no.
You certainly remember 3M in trading: Mind, Method, Money. All three are inseparable entities.
Trading theory or techniques are of course important, but equally important is the quality of traders who use the technique themselves.
Imagine if a civilian was given a 12.7 millimeter caliber sniper rifle which has an effective range of 1 kilometer. He was asked to shoot targets as far as 900 meters. Without an adequate background of shooting knowledge, of course the opportunity to be able to shoot targets correctly can be said to be almost zero.
But if the rifle is given to a military personnel who does have sniper / sniper specifications, of course it is almost certain that he can shoot the target correctly.
As a trader, so you can become “the right man behind the gun”, if you always train your skills and expand your horizons.
So, happy fighting, General!