Percentage of accuracy is an obsession of novice traders. But it is not a very important criterion for judging a trading indicator. Some highly effective models are wrong more often than right. While some marginal models are right more often than they are wrong. The best advice "keep it simple" . Nothing is a better indicator than a price chart. When looking for a trading program you need to first establish realistic objectives that are right for you. Remember a trading system designed for a well- capitalized long-term investor wanting to ride long- term trends will not work for an undercapitalized speculator looking for quick profits with minimal risk.
The big investor can handle large draw downs (negative positions) that always occur when trend trading.
The trader with limited capital needs to find profit in the smaller price movements that occur on short- term time frames. This individual needs a sensitive, accurate program that can offer consistent profitability. Smaller gains. But more frequent.
Both traders need to manage their capital accordingly. The big trader will trade less frequently. The smaller trader will trade more frequently but must cut losses immediately. Trend trading is easy. Anyone with a good long-term chart and a decent book can trade a trend. Short term trading requires the individual to develop the ability to learn how to understand and interpret price activity.
If you want to be successful you must study and learn. You cannot simply buy someone else's technology and blindly rely on it.
Short-term traders need to first adopt a specific set of rules that are learned and then internalized. This builds confidence. Which then develops quality experiences. Then the ability to utilize technology comes into play.
A short-term trader needs to first develop the ability to trade a stand-alone pricing chart consistently before considering moving forward and adding on additional analytical tools. Unfortunately most individuals do not take this path. Most pursue a program that is typically trend based and try and make it work with less capital on a smaller time frame only to end up wasting valuable time and money.
All short-term traders need to develop the ability to trade based on price action then evolve into more sophisticated processes.
That is the mission of The Trading Institute. Visit http://www.TheTradingInstitute.com
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