Extract from an ebook which is there on vfm for ages...
If we placed 100 consistently profitable traders in a room and asked each to discuss his or her trading style and techniques in five sentences or less, in my experience, whilst each person would use different tools and styles, they would all be trying to achieve the same goal – that is, to generate profits.
Every time you speak with another trader (regardless of whether he or she is successful), every time you read a trading book, every time you receive advice, there will always be new information to take in – usually about an entry technique, or a new style, method or indicator. Everyone has an opinion. There are many successful traders – or at least people who have had just one profitable trade – and they have achieved this success even though they all use different tools and techniques.
Out of our sample of 100 consistently profitable traders, 40 may use fundamental analysis, 40 may use technical analysis and 20 may just use intuition or gut feel. Even then, the 40 who use fundamental analysis may use different aspects of that field. Some may rely on various ratios, while others may not take any ratios into account and rely solely on insider activity. The list and combinations are infinite.
Of the technical traders, some will rely on moving averages, some on an RSI or other indicator, while others will rely only on price patterns and volume. Yet again, the pieces to the puzzle can be infinite. My point is that each profitable trader will use a different technique, style, investment time frame, information sources and tools.
If all of the 100 traders are profitable through using different techniques, the common denominator cannot be the tools being used. It must be something else.
If you agree with the above, it becomes easier to suggest that it will not matter which indicator, tool, time frame or software package is superior, and it's certainly not a tightly held secret or insider knowledge that makes them all profitable. All indicators, all technical analysis techniques, all fundamental analysis techniques, all software – everything you use to trade and invest – are nothing but tools.
The tools you use to trade do not maketh the money!
From http://www.vfmdirect.com/info/successful_stock_trading.pdf
If we placed 100 consistently profitable traders in a room and asked each to discuss his or her trading style and techniques in five sentences or less, in my experience, whilst each person would use different tools and styles, they would all be trying to achieve the same goal – that is, to generate profits.
Every time you speak with another trader (regardless of whether he or she is successful), every time you read a trading book, every time you receive advice, there will always be new information to take in – usually about an entry technique, or a new style, method or indicator. Everyone has an opinion. There are many successful traders – or at least people who have had just one profitable trade – and they have achieved this success even though they all use different tools and techniques.
Out of our sample of 100 consistently profitable traders, 40 may use fundamental analysis, 40 may use technical analysis and 20 may just use intuition or gut feel. Even then, the 40 who use fundamental analysis may use different aspects of that field. Some may rely on various ratios, while others may not take any ratios into account and rely solely on insider activity. The list and combinations are infinite.
Of the technical traders, some will rely on moving averages, some on an RSI or other indicator, while others will rely only on price patterns and volume. Yet again, the pieces to the puzzle can be infinite. My point is that each profitable trader will use a different technique, style, investment time frame, information sources and tools.
If all of the 100 traders are profitable through using different techniques, the common denominator cannot be the tools being used. It must be something else.
If you agree with the above, it becomes easier to suggest that it will not matter which indicator, tool, time frame or software package is superior, and it's certainly not a tightly held secret or insider knowledge that makes them all profitable. All indicators, all technical analysis techniques, all fundamental analysis techniques, all software – everything you use to trade and invest – are nothing but tools.
The tools you use to trade do not maketh the money!
From http://www.vfmdirect.com/info/successful_stock_trading.pdf
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