Just Watch the Charts

The markets are a treasure chest buried in jargon and locked up in risk.

Upon our foray into the markets, we are filled with the innate desire to attain the most knowledge we possibly can in order to gain a deeper understanding of the nature of the markets, where we would then be able to better extract a profit.

The hypothesis is sound – the more we are informed, the better we should trade. But the trader should use great discretion in deciding what he should be informed about. Many new traders, from the beginning, set themselves on a wayward course and get lost in the trivialities of jargon and waste their time deciphering intentionally clunky definitions that could have been explained in much simpler terms. They begin learning words. And once they learn what those words are, they learn very quickly that those words do not inform them whatsoever on how to trade.

The novice trader, who might be intimidated by the mountainous terrain of market lingo, should only endeavor to realize one simple concept: if you buy and it goes up, you win; if you sell and it goes down . . . you win. All else is purely academic and should – and will – come later.

Skip the boring part. Put down the books, close the news feed, open the charts, and start watching. This is where you engage your creative faculties in conjunction with your powers of observation. This is where the hypotheses take place. This is where you might make a discovery.

You might impress your friends to sound off on “shorting the underlying security on the overbought stochastic with an inverted bull pin candle and a 2% diversion from the 15 minute exponential moving average” (though truly, the markets are not impressed at all.) But perhaps it is just as, if not more impressive to be a successful trader without needing to learn the definition of a single new word.

When searching for anything, there is a distinct advantage in having the assurance that what you are searching for actually exists. Just watch the charts – all of the information is there.

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