Hello everyone. I’m back after the hiatus with a familiar style article – 50% sharing trading experiences and 50% trading strategy review. In today’s article, I will go into the extremely paradoxical problem in trading. That is, knowing a lot will negatively affect your trading. And I also review the Rodeo trading strategy in Olymp Trade.
Knowing many trading strategies and knowledge isn’t good
It is quite paradoxical that knowing too much in trading can also be a disadvantage. Because knowing too much can lead to overconfidence when trading.
Lack of confidence is one of the common problems in traders. People who lack confidence will face many difficulties. They don’t dare to act even when they find a favorable opportunity. Because they always have some invisible fear stopping them.
The cause of this lack of confidence mainly comes from a lack of real trading experience. Therefore, when trading and knowing a lot about the trading field, traders tend to be more confident.
However, when you know a lot, your confidence is also sky high. At this point, you will face a problem that is overconfidence. This state of mind will be extremely beneficial at first because it keeps you with the necessary optimism and positive attitude.
But later if you don’t adjust, this overconfidence will magnify your ego. And it will indirectly lead to wrong trading decisions, unnecessary risks.
Knowing too much leads to obstinacy, conservatism and high expectations in trading
No matter how experienced you are, you still have to stay up to date with new knowledge in the market. The previous trading strategies may have helped you make a profit from Olymp Trade. But who knows how things will change tomorrow. Knowing too much can make us more conservative, unwilling to change.
The less you update, the more outdated you become. And then if something goes wrong, you still won’t admit it’s your fault. Since you think your knowledge is perfect, there is nothing wrong with it. In that way, mistakes will not be corrected, which is the foundation of future failures.
When we have too much knowledge, we often implicitly create high expectations. This is very normal. If you trade well, you will set high expectations because you think you can. There’s nothing wrong with having high expectations. Simply if it doesn’t come true you’ll be hugely disappointed.
And one more thing, it can become a hindrance that makes you hesitate in the future. Too much turbulent data flow makes you confused and scared. In a long run, you would gradually miss good opportunities and lose decisiveness.
Review the Rodeo trading strategy in Olymp Trade
– Trading currency pair: EUR/USD.
– Classical capital management method.
– Heiken Ashi 1-minute candlestick chart but open a 3-minute trade.
– Trading strategy: Rodeo.
Order 1: The price started to fall when the Heiken Ashi candlestick turned from green to red. At the same time, the MACD crossed the 0 line from above and the Stochastic also crossed the 80 from above. Opened a DOWN trade with 3-minutes expiration time and the amount of $200.
Order 2: The price tended to increase when the Heiken Ashi candlestick turned from red to green. Meanwhile, the MACD indicator crossed the 0 from below and the Stochastic indicator crossed the 20 from below too. It was safe to place an UP order.
Order 3: The price formed a downtrend when many red candlesticks appeared in a row on the Heiken Ashi chart. At that time. the MACD crossed the 0 from above and the Stochastic indicator crossed the 80 from above. Opened a Down trade immediately.
Order 4: The trend reversed from bearish to bullish when the Heiken Ashi candlestick turned from red to green. The signal to enter an UP trade with a high probability of winning is when the MACD crossed the 0 from below, and the Stochastic indicator also crossed the 20 from below.
Order 5: The price reversed to downtrend when the Heiken Ashi candlestick turned from green to red. At that moment, the MACD crossed the 0 from above and the Stochastic also crossed the 80 from the top. All conditions has been met to open a safe DOWN trade according to the Rodeo strategy.
Have you ever wondered why each article I write only reviews a single trading method? That’s to help you focus 100% on the strategy that I share.
Avoid studying too much but lack of pratice. This will make you lose tons of money when trading for real. It is good to know a lot of knowledge about trading, but you need to understand that trading is a work of probability that there will be right or wrong.
Never be stubborn with wrong trading decisions that make you lose more and more. Finally, if you want to make a profit with the Rodeo trading strategy, test it in the demo account first and have at least 60% winning rates for 2 continous weeks before using it in the real trade.