Recently, I attended a T3B mentoring session where mentor Darren talked about his own understanding of trading profits in relation to how much you know about trading. He drew a graph to capture this relationship:
Darren's Trader Curve
Profits do not grow with increase in trading knowledge
Basically, he was saying that T3B graduates are equipped witht the necessary skills to earn money in the market. The system is simple without the compromise of profits. T3B graduates start at point 1 on the curve – a little trading knowledge and enjoys a little profit. As graduates became familiar with T3B system, they felt that they are ready to learn more indicators and trading techniques. After gaining more knowledge, they are able to enjoy an increase in profits. However, at a certain point (point 2) they found that their profits actually comes to a stand still. They almost learned and applied all the indicators they know, but it just fails to increase their profits further. It is only that they began to simplify the trading system, essentially back to the original system, that they were able to enlarge their profits greatly (point 3). Therefore, Darren warned that it is futile to learn and apply every technical indicators out there. He advised traders not to go “one big round” to increase one’s profits. It is the trader’s psychology and money management skills that traders need to develop.
Even if you do not use T3B system, your system must not be cluttered with too many indicators – 3 should be the maximum.
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