Filter out the noise
This article talks about the complicated task of ignoring the irrelevant information in order to avoid distractions. What are the strategies the professionals use in order to keep the eyes on the ducks without getting overwhelmed with news and events that may or may not be important?
It’s a tough one. We want to be connected, informed, in the loop. Indeed, traders want to get as much as they can, and absorb current events and market news. Many traders also believe they need the external stimulus, constantly in fact. It can become an information addiction. On the other hand, even the slightest influx of information can be a distraction to the most disciplined and focused individual… so how does a trader keep his or head straight?
When it’s too noisy, you often can’t make out what you want to hear. You may get confused and do something wrong. The same thing can happen when you trade currencies as your view on the markets can be complicated by the so-called ‘market noise’.
There is so much information available. You are bombarded with info: TV, magazines, social media, YouTube videos etc… Traders are a lot like miners. They need to collect tons of dirt (data and news), sift through it carefully and quickly, and allow the valuable information to pass through, and then draw logical conclusions, often with incomplete and conflicting perspectives. This is made all the more difficult by exposure to the many conduits by which traders receive information. Traders can be blown off course, made indecisive by data, and mess up even the most obvious of trade opportunities. So, first priority is not to buy the expensive Bloomberg terminals and secondly switch off the TV!
What tends to happen as traders survive years of trading is the ability to hone in on the most important information, discount and even ignore much of the rest, stay centered on the goals or trading strategy, while maintaining a flexible open mind subject to change when events do.
Therefore as a novice trader just get rid of all the baggage from the beginning. The so-called experts usually have their own agenda and their ‘advice’ will only confuse you. If you want to follow somebody, follow him/her. Just keep it at the most to one; one who you think gives you some valuable content day after day. If you don’t want to subscribe to one, even better. It takes some time but ultimately it’s far better to just trust your own judgment.
With all the noise you do yourself a disservice in your pros and cons to different trades and ultimately it results in a neutral and therefore doesn’t help you really and unfortunately, if you go that route, you have all the noise to filter through first.
The main thing traders derive from listening to “experts” is…that the experts are not so expert after all. They make mistakes. They get things wrong, and if you measured their performance or track record over a long period, it usually is not that good. Remember you’re the expert, not the “experts”. Traders need to learn to trust themselves to make the decisions about their trading account. You will be able to go in with much more clarity, much more focus. You want to make your own decisions, stick to it and refine if needed.