loader image

Why Simple Trading Strategies Tend to Work Best

by | Apr 19, 2022 | WealthPress University

There are several different reasons why simple trading strategies work better than more difficult ones… 

One thing to keep in mind when first starting out with swing or any type of short-term trading is to make sure you understand there’s no correlation between the difficulty of a trading method and the amount of success it could produce. 

I want to share a personal story with you that’ll help put this together… 

Why Simple Trading Strategies Work

In the mid-90s, I picked up a publication called Trader World, and I noticed they were promoting a trading competition.

Without getting into the exact names, I saw one trader who was doing quite well in the competition. I did some limited research (this was before the internet was a big thing, so keep in mind that there wasn’t a lot of information out there) and found out that he took on limited students.

So I ended up hiring this trader for a few sessions to show me his technique. 

He used a modified Elliott Wave theory that was extremely complicated. So let’s just say it wasn’t one of the easy swing trading strategies I had expected. 

I could barely keep track of what he was showing me. 

He didn’t have it programmed into a computer because back then, Trade Station wasn’t all that advanced. 

In other words, I had to do everything by hand and it would take me hours to do calculations to figure out what the next setup would be.

Not only was I turned off by this strategy, I started to feel burned out by the markets and trading in general. 

It would take me over a day just to calculate a simple entry and exit strategy. Not only that, after trading with it in real time, I came to discover that it wasn’t all that successful.

So this is why simple trading strategies work better than most complex ones… 

Profitable Swing Trading Doesn’t Have to Be Complex

I quickly dropped this strategy before it bankrupted me and went back to trading simple patterns that I could calculate in seconds. 

My trading performance improved and my confidence got better as well. 

If you’re wondering what ever happened to the trader I hired to help me, he lost the competition and no one ever heard from him again.

The moral of this story is that complicated strategies do not equal more success. 

The more complex something is to learn, the greater the odds that it’ll be confusing or misinterpreted, which is the last thing you want when you’re in the middle of a trade.

You also want to make sure your entries and exits are clear so you don’t get confused during vulnerable times.

If your plan looks like a complex research paper, it can throw you off and make the trade that much more complex and confusing…

So that’s the main reason why simple trading strategies work… and often work best.

There’s also never been a study that says simple methods are less successful than complex methods. 

In fact, one of the best-known traders in the world uses simple 50-day breakouts, and he’s been doing it for 40 years!

I tend to stick to basic strategies such as the four-day retracement, tail gap strategies and the ones I discuss in these tutorials almost every day. 

These are simple swing trading ideas that have predetermined risk and entry levels. 

They’re easy to manage and execute. And there’s no ambiguity to deal with, especially when you’re in the middle of placing trading orders.

To learn more about this topic, please go to: Learn to Swing Trade Options With This Beginner-Friendly Strategy and The Best ETF Swing Trading Indicators for Beginners.

And if you haven’t done so already, subscribe to our YouTube channel so you can be notified as soon as we make our next post, and see what trade opportunities we’re paying close attention to! 

All the best, 

Roger Scott
Senior Strategist, WealthPress

WRITTEN BY<br>WealthPress University

WealthPress University

What to read next

99 Problems and a “Pivot” is One

99 Problems and a “Pivot” is One

A friend of mine sent me this chart about three months ago. I should probably print it and keep it in my wallet next to a photo of my daughter. Given the sheer number of questions I’ve fielded lately, I’ll probably end up showing this chart more than her picture.

read more
Everything Everywhere, Going Down, All At Once

Everything Everywhere, Going Down, All At Once

When our momentum reading went negative last week, I didn’t know that we’d have the second largest bank failure in U.S. history three days later. All I knew was that it went negative… and that we got out of the way.

read more
Trust But Verify…

Trust But Verify…

I want to talk about our version of “Trust but Verify” in the markets. Qualification is the most important part of the investing process. And this F score value strategy looks to be crushing the current market.

read more

Have any questions? Contact Our Customer Service Team