One of the biggest problems I see with traders and trading gurus is that they overcomplicate trading by using too many filters. The problem with adding more and more filters to your trading is firstly that filters will start to contradict each other, secondly you will become overwhelmed with the amount of information needed to be taken into account before taking a trade and thirdly there is no proof that having overly complicated systems actually improves your results. What type of filters am i talking about? Here is a list…
Lower and higher time frame support and resistance
Average daily Range
Higher time frame momentum
Correlation of other related pairs
Correlation of the Indices
Correlation of commodities
The more filters that are added in the harder it is to make a decision, so here is a bit of advice. Go for the least amount of filters rather than the most.
You can trade successfully using support and resistance and candle patterns only.
You can trade successfully using chart patterns combined with a few candle patterns.
Go for simplicity rather than complexity, rememmber the only decision you are really making is will price go up or down and have you found the optimum place to enter that is low risk and high reward. Those questions can be answered using very simple systems with very few filters. I bought a day trading system some time ago which was created by a fantastic short term day trader, but she has multiple filters which she uses to make a decision which made the system too subjective and complicated for me. I like simple, simple can still give you a profitable system and much less of a headache.