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Transcript of Video:
Hey everybody. Happy Thursday. I was having breakfast this morning with Scott Haywood and Steve and Nate and we were talking about golf and I thought there was this analogy that Scott made, well, he was really talking about golf. It wasn’t even really an analogy and it directly applies to trading and here’s the analogy. No, Steve made this analogy. It doesn’t really matter who made this analogy, but we’ll give the credit to Steve. He basically said that a pro golfer once told him that when golfing, you never want to use a club that hits farther than a four iron and the reason is this. If you can hit with a four iron and you can just keep moving the ball forward, down the field, down the fairway, that you can eventually play bogie golf or 90 golf, which is an improvement on almost everybody’s golf game and I thought to myself. Self, that’s an analogy to trading and here’s why.
All right, let’s take a screen shot of this US dollar Mexican peso chart and let me show you what I’m talking about. Let’s take for example this upward trend in the US dollar Mexican peso. Now, some people might ask, “Oh, wow. How can I plan a trade that gets me in all the way down here and then I get to go, I get to ride that trend all the way up there?” Right. That’s what most people would say. Well, what if there’s another way to think about this. What if we could instead, just have a system where we took small trades every time there was a retracement? And we just had a system, where we’re taking a small piece out of the market several times, just over and over and over again. Maybe a little bit at a time. That’s moving the ball forward in other words, a bit a time. Instead of looking for the big giant absolute win and there’s lots of ways to do this.
There’s the stacastic oscillator. There’s the RSI. There’s all kinds of oscillator based trading systems that help you just trade on a retracement and back up the other way. You might say, “Is that an over simplification?” Well, I don’t think it’s an over simplification and here’s why I don’t think it’s an over simplification. I think that every successful trading strategy is really just a simple way of doing the same thing repeatedly in the same way that successful golf is just moving the ball forward and then practicing the short game. There isn’t some giant secret. The giant secret that isn’t a secret is that you get good at one thing and then you build on that one thing over and over again. I once shot my best round of golf using just a seven iron and a putter.
Of course that round of golf I shot like a 110, but it was still my best round of golf ever and the best trading that I’ve ever done, has been the repeated process over and over and over again that looks so simple that I overlooked it for years and years and years. Support and resistance trading or simple divergence trading on the one or the five minute charts. Or this short term trading that I’ve been showing you on Twitter and in daily emails. All of that is really simple over bought and over sold type of trading, and down at its essence, that’s the reason it’s successful, is that it’s the same thing over and over again and it’s easy to practice that. If it was some kind of giant complicated strategy, well, I’d mess it up.
There’d be too many moving parts. I hope you have the best day ever everybody. Thanks for watching. You can subscribe to the YouTube Channel if you’re watching on YouTube up here at the corner or whatever else and if you’re watching on Facebook, you can like the Facebook page or whatever else. Stay in touch. Leave me a comment below. Let me know where you’re from. I’m Rob Booker and I will see you tomorrow.
Have the best day ever,