Trading Ideas For The Weekend
http://www.netpicks.com/trading-ideas-for-the-weekend/

For me personally, it has always been a
useful exercise for the weekend to
muse on trading ideas I've come across
during the week or have resurfaced
somewhere from the depths of my
mind.

It gets me thinking in different ways
and can inspire a degree of creativity,
which can be sorely lacking during the
trading week.

One such idea to consider is the
common notion is that trading is a
simple game but not easy.
Why should that be?

The simple side of trading comes down
to most concepts being pretty straight
forward. Chart patterns, economic
releases, volume etc. all have simple
ideas at the heart of it.

But markets are made up of the
people who trade them and although
people are often driven to act for
simple reasons, it's not always clear
what the scenarios are that lead to
their actions.

I want to be very clear on the
definition of "complex" here because I
realize that this is a point some people
will contest.

Complex
made up of various interconnected
parts; composite
(of thoughts, writing, etc) intricate
or involved

Complicated
made up of intricate parts or aspects
that are difficult to understand or
analyze

These interconnected parts do not
have to be complex in themselves.
They can and often are very simple.

But it's the amount of these ideas,
which makes trading complex and
often causes it to be complicated,
when the relationships between each
constituent part are not always
certain.

Uncertainty is a big stumbling block. 2
+ 2 does not always make 4 as far as
the markets are concerned - at least as
far as traders can decipher. So reading
what the markets might be about to
do is an art of sorts.

Dealing with the uncertain nature of
trading can be a struggle emotionally
and cause traders to act in a way other
than what was planned.

So the point is that trading is simple
and complex at the same time.
Because of this, it's certainly not easy -
otherwise everyone would be great at
it right?!

Another idea worth considering is
about the nature of traders. As a
trader, is it better to be a specialist or a
generalist?
In nature there are obviously many
examples of specialists and generalists.

Specialists can live in a certain
environment and are well adapted to a
certain food sources. Koalas and
Pandas spring to mind as having
specialist diets of eucalyptus and
bamboo respectively.

Generalists can survive in different
habitats on a relatively varied diet.
Examples of generalists might include
bears and rats.

Using this analogy as applied to
trading, habitat might be the market
that you trade and the type of strategy
you employ could be considered your
diet. Both specialists and generalists
exist in trading and have their place.

Specialists have an intricate working
knowledge of the market they trade
and might also be experts in a
particular strategy.

Generalists can move from market to
market and trade different strategies
based on the opportunities that are
present.

History tells us that it tends to be
generalists who stand the test of time.
But it's important to understand what
a generalist should be.

Being a generalist doesn't mean that
you can't be an expert in single
markets or a particular strategy. It
means that you are good
understanding the core market
mechanisms and identifying the
current climate in different markets.

The key questions a trader needs to
ask themselves are, if you're a
specialist trader, do you have a
superior understanding of the product
you trade and the strategy you
employ, or are you simply trading one
market and one strategy because it's
what you know?

If you're a generalist who hops from
market to market, strategy to strategy,
are you doing so because you are
recognizing underlying shifts and
opportunities or is it because you just
don't want to miss out?

I hope you decide to start spending a
little time considering certain trading
ideas as it's my belief that this kind of
thought can lead to breakthroughs in
understanding about our own trading.