The Less You Know, The Better You Trade

Traders often feel that technical analysis alone isn't enough to understand market conditions and potential future changes. They supplement this with other information, like a country's economic data, political news, and more, to create a comprehensive view of the current and future market.

However, having a lot of information at once isn't always beneficial. Especially if traders can't find the right correlation between different pieces of information. Instead of clarifying the market situation, a large amount of information can make it difficult for traders to make decisions. This is because it's not uncommon for different pieces of information to show conflicting indications.

Additionally, traders will struggle to determine which information is primary and which is secondary. Even with just two different types of information, traders will likely be confused about which is more important than the other. With so much information, it becomes even more challenging to determine what's primary, secondary, and what's merely supporting information. Yet, distinguishing between primary and secondary information is crucial, especially as the foundation for every decision a trader makes.

These difficulties ultimately lead to traders doubting their own decisions. This breeds anxiety during trading and a sense of unsettling worry. Furthermore, traders might intervene in their trades or take actions that violate the principles they've carefully established.

How to Handle Information Overload

The first step traders need to take is to realize that even though the forex market is complex, with many factors influencing price movements, it doesn't mean that considering all these factors will lead to a better understanding of the market and more accurate predictions of price movements. After all, predictions are just estimates we make about the future, which hasn't happened yet. Meanwhile, the information we have only reflects the current market conditions. So, no matter how much information we have, our knowledge of what will happen in the future remains 0%.

Instead of gathering all information, we only need to have the information we need to form our own perspective in defining the current market conditions. This may seem subjective, but that's how trading works. Traders can't be entirely objective because that's impossible. Not only is it impossible to get complete information, but it's also difficult to draw conclusions based on a lot of very diverse information. The most important thing is to have a logical basis for our own perspective.

So, it's best to avoid gathering all that information from the start. Stick to the information we need and leave the rest. That way, it will be easier for us to formulate the market conditions and make the necessary decisions to face those conditions.

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