Overcoming Chart Overwhelm
One of the biggest problems traders face is information overload. There is just so much data to crunch these days that it's easy to become overwhelmed. Coupled with ever changing strategies, and it's easy to see how confusion can strike.
We all know that the market is constantly changing, and that we need to adapt our strategies constantly to stay ahead of the pack. Coupled with this however is the fact that we should never change too many things at once.
From the beginning one should integrate into their trading, base practices that will span all strategies - behaviours and chart elements that will not change between strategies, and will become a familiar foundation for you to work on.
One of these practices is to ruthlessly make your charts more efficient through simplification. Always be looking for ways to make the information you see easier to process. There are a number of generic indicators available to do this these days.
One example here is to use color to convey information where you would usually use numbers or text. Humans process graphical information far better than text. If you only trade at certain times of the day, then use a background indicator to color the background of your chart at these times. This is far more effective that looking at the time axis.
Another area of optimization is the use of sound. This is especially effective for processing events. Need to know when a new 30 minute bar starts, or when a signal fires? Use an audio alert.
Look for ways to combine multiple indicators into one. If you have multiple filters, combine them into a single visual one. Reduce what you have to look at on each chart.
Always look for way to simplify. And focus on methods that can generically be used with any of your strategies. Whether you're using pivots, crossovers, divergence or whatever, the principles above can all be used to make your day to day trading easier on the brain. - 23212
We all know that the market is constantly changing, and that we need to adapt our strategies constantly to stay ahead of the pack. Coupled with this however is the fact that we should never change too many things at once.
From the beginning one should integrate into their trading, base practices that will span all strategies - behaviours and chart elements that will not change between strategies, and will become a familiar foundation for you to work on.
One of these practices is to ruthlessly make your charts more efficient through simplification. Always be looking for ways to make the information you see easier to process. There are a number of generic indicators available to do this these days.
One example here is to use color to convey information where you would usually use numbers or text. Humans process graphical information far better than text. If you only trade at certain times of the day, then use a background indicator to color the background of your chart at these times. This is far more effective that looking at the time axis.
Another area of optimization is the use of sound. This is especially effective for processing events. Need to know when a new 30 minute bar starts, or when a signal fires? Use an audio alert.
Look for ways to combine multiple indicators into one. If you have multiple filters, combine them into a single visual one. Reduce what you have to look at on each chart.
Always look for way to simplify. And focus on methods that can generically be used with any of your strategies. Whether you're using pivots, crossovers, divergence or whatever, the principles above can all be used to make your day to day trading easier on the brain. - 23212
About the Author:
About the author: Dave Sumter is the owner of ChartCandy.com, a site focused on Ninja Trader. He also writes about internet entrepreneur topics on his blog.
posted by X - Men @ 4:30 AM
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