Beliefs and simplicity

A trader friend recently told me about a commercial property transaction he was asked to get involved with some years ago. The deal was worth several million pounds, and given the complexity of the deal you would have expected that the people involved concerned would have wanted a detailed reports from the banks or property agents, surveyors, and the local councils, running into many pages, covering all aspects of the potential deal being suggested.

What are your beliefs?

Part of your success as a trader will depends on what you believe to be important. As Van Tharp says "You trade your beliefs about the markets".

If you look at this list below, then I do not follow or use many commonly held beliefs out there:

• I don't study the fundamentals on a company - half the time I don't even know what these companies do;
• These days I don't even let the price action in the indices influence my trading decisions or market exposure;
• I don't track volume;
• Apparently trend following on stocks doesn't work;
• I take entry signals regardless of the time of day - whether it is in the first minute after the markets open or the last minute before they close;
• I take intra-day exit signals.

Beyond these beliefs, you can also look at the basic approaches or trading/investing concepts taken by successful traders. Go and read the Market Wizards series as an example and see the differing methods used by some of the most successful traders ever.