Stocks & Commodities V. 24:10 (68-70): The Tools Of The Trade by Martha Stokes
Here’s an overview of the array of tools you need in
order to trade successfully.
Every professional knows that the right tools are essential to success. A carpenter wouldn’t use a sledgehammer to nail an interior window frame, nor would he (or she) use a framing waffle-head hammer.
He knows that the ideal hammer for fine finish work is a finishing hammer that has a smooth head and is lightweight. By using the right hammer for the job, the carpenter gets the results he wants.
YOUR TOOLKIT FOR TRADING
The same applies to trading. Whenever a trader comes to me struggling with less-than-satisfactory results, I first check his or her toolkit of indicators. Many factors can cause this trader to have disappointing results; often, the primary culprit is not understanding how to use indicators. The most common problem is that
traders will use several indicators that are basically all
tracking the same market data and are missing indicators critical for tracking the full range of data for the stock. The toolkit of indicators is out of balance. That trader is using a sledgehammer instead of a finish hammer.