Today's Quote: “Simplicity, clarity, singleness: These are the attributes that give our lives power and vividness and joy as they are also the marks of great art. They seem to be the purpose of God for his whole creation.” Richard Holloway.

There are several good books out there about trading that should be on every trader’s must read list. If you were forced to choose one and only one, the only possible pick would be “Tools and Tactics for the Master Day Trader”. We are going to run a series of excerpts from the best selling book for the next series of lessons. Now in the words of the master trader himself, Oliver L. Velez…

“12 Trading Laws of Success” –

LAW #5: KEEP IT SIMPLE

For the most part, it is our firm belief that traders, in a desperate search for the "holy grail," will unnecessarily grasp at anything that suggests, "super complexity." Logarithms, neurological mechanisms, and confusing mathematical trading equations are but a few of the examples of how far we have transgressed away from the basics. Basics such as major trend lines. price support and resistance, volume increases and decreases, major moving averages, core chart patterns, and the like. The western frame of mind, in particular, assumes that if it isn't complex, it isn't workable. Our view is closer to the exact reverse of this misconception. The clarity of mind and the certainty of action that are born from a simple approach are almost indescribable. And all of our students get a healthy grounding in the basics, and learn the value of ceaselessly revisiting them. Decide today that you will become a master of the basics, and you'll quickly understand that simplicity is the mother of clarity.

If you answer yes to any of the following questions, your trading approach may be too complex:

1. Will your trading tactics and techniques thoroughly confuse an intelligent 12-year old?

2. Does your approach call for mathematical calculations?

3. Do you need a calculator to trade?

4. Are more than three pieces of software required to come up with your trades?

5. Will it take more than 5 minutes to write out your trading strategy on paper?

These are only a few questions that point to over-complexity. Make sure you keep it simple.