Winners Edge Trading always advises to keep trading simple.
The reason is straightforward: complexity is a huge cost of doing business.
[tweetable alt=””]Therefore complex businesses are less profitable than simple businesses (according to 80/20 Principle written by Koch).[/tweetable]
Trading is a business as well, and hence keeping trading simple is a profitable choice.
THE SIMPLEST TECHNIQUE EVER
One of the simplest methods a Forex trader can use is the “LOOK LEFT” technique.
The look left idea is – of course –easy to understand:
- Grab any chart
- Find the current price
- Look where historical price is in relationship to current price (which is looking to the left of the chart)
Historical price is always to the left of the current price, so that is why the method is simply called “look left.”
CONCLUSIONS WITH LOOK LEFT
A trader can apply the look left method and instantaneously understand the most important parts of trading like trend and support and resistance. Here are the most common situations:
FIRST: price to the left is all lower or higher, which means price is reaching new lows or highs. Price is pushing into territory that was not recently visible in this time frame.
CONCUSION: the simple conclusion with the look left method is that the pair is in a TREND.
SECOND: price to the left is both higher and lower, which means price is NOT reaching new lows or highs. Price is floating up and down in the same territory as before.
CONCUSION: the simple conclusion with the look left method is that the pair is in a RANGE and that a trader should be aware of the support and resistance levels.
THE ULTRA QUICK SCAN
The “look left” method really allows traders to scan any chart extremely quick and efficient. The look left method simplifies the process of scanning the market which enables you to review many pairs and time frames extremely quick and it allows you to gather the most important information available (support and resistance, and trend).
The input versus output ratio is tremendously high: a trader can understand the market and price movements very quickly and with little effort.
Simple concepts like the look left method help traders simplify their business, save money and allow them to focus on the most important pair(s) and timeframes(s).
Despite its allure, it is very important to realize that no actual trading decisions should only be made based on the look left method. The concept is only advisable as a scanning tool. Then traders can look closer at the pairs that impress you the most.
Will you use the look left method?
Have you heard of it before?
Although the technique is simple, many traders probably have not thought or heard of it before. If you think about it though, it is logical to always look left first before doing anything else. It just makes too much business sense not to do it (the output derived from a bit of input is too high).
So remember: LOOK LEFT BEFORE DOING ANYTHING ELSE.
Let us know what you think down below!
Thanks for sharing and Happy Hunting!
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