Keep Trading Simple!
Trading is hard enough, but new traders find it a point to make it even harder. They want to pull out every indicator in the book, when its just noise or a distraction. We focus on entries, risk reward, volume and moving averages as a guide. But we see time and time again new investors pull out fib tables, parabolic SAR's, Linear Regression Models and every other indicator that keeps coming out. Or they base the trade of what a guy said on CNBCs "Fast Money" or what Jim Cramer just say on "Mad Money". Granted I watched the show years back in college and as a new investor you can learn a little off the show. But if you track there calls there usually the ones selling Fear when the market is getting cracked when the real money is buying, and after we rally off lows and are back at highs, there saying its safe to get back in the market when your buying highs.
Of the two images we used in this post, the top is our Short Hedge against the overall market (SPY) the game plan is this simple the market has ran up 25 points off lows in the last month. We have long positions still on but to risk $1 to make $5 to $10 is worth the "Trade".
Keep it simple, if you cant explain your trade in 1 to 2 sentences you should probably question why you really need to be in this trade.