December 26, 2018

The tools you use to trade do not make the money!

If we placed 100 consistently profitable traders in a room and asked each to discuss his or her trading style and techniques, we will know that some may use fundamental analysis, technical analysis or just gut feel. Even then, those 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.  Each profitable trader will use a different technique, style, investment, time frame, etc.

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.

All indicators, all technical analysis techniques, all fundamental analysis techniques, all software – everything you use to trade and invest – are nothing but tools.

So 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. 

The tools you use to trade do not make the money!

The goal of trading is to be profitable. The tools used to achieve this will vary depending on our personalities, financial situations, attitudes to risk and beliefs. Therefore, what you use to trade with are simply tools of the trade and not the reason why you will be profitable.

Source: Successful stock trading by Nick Radge

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