January 4 (Wed): Russell 2000 (Free viewing item: What does reducing indicators mean?)

Good evening?

In a post on 12/22, I talked about a free viewing item: indicators are training wheels.

https://www.gogojungle.co.jp/finance/navi/articles/49588

In that context

Adding indicators is for beginners.

Reducing indicators is for intermediate traders.

Being able to continue earning without indicators is for advanced traders.

That is what I wrote, but this is a supplement.

The reason being that I received questions like the following.

“In a previous blog you wrote that as you improve you remove indicators, right? Do you pay attention to chart patterns like the Head and Shoulders and double tops, price action such as pin bars and outside bars, the high/low of each timeframe, the direction according to Dow Theory, and the 50 percent retracement level, or anything similar?”

That sort of thing.

To answer it briefly,“I look at various things.”.

I don’t watch things like head-and-shoulders or W-bottoms, but I do watch Pin-bars/composite Pin-bars, long wicks, and retracements like 〇〇%.

Why do indicators get reduced as you improve?

For example, imagine a battlefield with amateur soldiers and veteran soldiers.

① You want to determine the direction.

【Amateur Soldier】Uses an indicator called a compass.

【Veteran Soldier】Can determine direction from environmental cues such as the position of the sun.

② It starts to rain.

【Amateur Soldier】Since they couldn’t predict rain, they hurriedly put on rain gear as an indicator.

【Veteran Soldier】Forecasted rain in advance and prepared a canopy with trees.

③ You spot an enemy soldier in the distance.

【Amateur Soldier】Which of the many weapons-indicators they own should they use? They figure it out only at the moment.

【Veteran Soldier】They are prepared to respond with just one weapon they are familiar with.

【Amateur Soldier】They carry many indicators like compass, rain gear, and weapons, but somehow it feels chaotic.

【Veteran Soldier】They can respond with just one weapon. It’s a matter of experience or proficiency; the skills they’ve acquired are many, and they keep the number of weapons to a minimum and stay calm.

For example, this may be just a story, so you might not relate. This is my impression.

【Amateur Trader】

Aren’t you always a bit flustered somewhere?

Even if you decide that Entry happens when indicators align, when it actually happens,

・Is it really okay to enter?

・Could it just be a false signal?

・If you think this way, wouldn't the opposite direction be more plausible?

Even if you decide to pull the trigger, when you’re there, your mind can be chaotic.

【Veteran Trader】

Candle patterns and other cues are immediately incorporated into the decision process, you predict in advance, and plan your countermeasures.

Then you simply wait calmly until the right moment arrives.

And when the timing is ripe, you pull the trigger.

They are very composed, aren’t they?

In golf or baseball, when you swing, you say

・Turn your hips!

・Face your chest toward the pitcher!

・Rotate your body!

・Pull your hips back!

There are various ways to say it, but in the end it’s all about “turning the body.”

However, for A, “Turn your hips!” may work, while for B, “Pull your hips back!” may feel more natural.

So I plan to continue conveying important trade concepts with varied phrasing, wording, and expressions.

Please feel free to take away anything you can.

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