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he acronym K.I.S.S. stands for Keep It Simple Stupid. This acronym is as applicable to the field of Forex trading as it is to any. Keeping it simple in regards to your Forex trading means keeping all aspects of your Forex trading activity simple, from the way you think about price movement to the way you execute your trades.

Simplicity is the most often and easily over-looked factor to profiting long-term in any financial market. The reasons that trading lends itself so easily to leading people to believe that they must use complicated and (or) expensive trading methods are many and varied. This article will help you to understand why traders tend to over-complicate Forex trading and the best way that you can work to use the power of simplicity to your advantage.

So you’re excited about the latest and greatest programmed indicator that has been getting hot press in the forums. You just know that this one will work, the returns that its creators have posted look absolutely brilliant and you can’t wait to try it out. That last indicator based method didn’t work as you expected it to, but this new one seems like it makes a lot more sense and all the testimonials you’ve read just can’t be wrong….

Many traders harbor similar beliefs to the above paragraph, they think that by trying enough trading systems, eventually they will hit upon that one that is their automatic ticket to consistently profiting in the markets. This belief is exactly what causes many traders to blow out their accounts time and time again only to find themselves full of frustration and confusion. Simply put, there is no free lunch trading the markets, many traders think by finding that one great trading system or indicator they can sit back and watch the money roll on. The truth is that nothing systematic exists in the forex market; the market is not a static entity that can be tamed through black box mechanical systems. It is a volatile beast that is driven off of human emotion; human beings vary in their emotional reactivity to specific events, especially when their money is on the line.

The fact is that while almost all traders want to make trading a simple process, they are going about it in the totally wrong manner. Trading can only become simple once you forget about the idea of finding a perfect indicator based trading system that will work in all market conditions. Markets are just too volatile and complex to ever be dominated by a piece of software code.

This being the case, how does one keep their Forex trading simple?….. Stop looking for the next great trading system and start looking at the price bars on your charts. By learning to read price action on a raw “naked” price chart, you are learning an art and a skill at the same time. The “art” part of the equation is what allows some traders to make a full time living in the markets while the masses who are struggling to find the next best indicator system continue to lose money by trying to fit a square peg into a round hole, so to speak.

Learning the art and skill of price pattern recognition will provide you with a perspective and not a system. This market perspective is what would be considered a trading “method”, many people use the term method and system synonymously when referring to trading techniques, however; they are really two entirely different beasts. A trading method provides you with a way to make sense of daily market movement, whether the market is trending or consolidating, where as a trading system is a strict set of rules that allow for no degree of human discretion.

How did famous traders like George Soros, Jesse Livermore, and Warren Buffet make their millions (and billions) in the markets? Not through complicated trading software or lagging indicator based trading methods, but through a discretionary market perspective that was developed through an awareness of price dynamics and market conditions in the various financial instruments they traded.

The purpose of this article is to help you understand that you can use simple price action setups to successfully trade the forex market. Professional Forex traders all have one thing in common, they keep it simple. Most beginning traders, and many experienced but unsuccessful traders, take the completely wrong approach to trading the markets. The K.I.S.S method, as it relates to Forex trading, is built upon an understanding that the best way to navigate the market is by concentrating on learning to interpret and utilize periodically repeating price action signals. By trying to force a set of strict indicator based trading rules around the unbounded arena of financial markets, many traders unknowingly make trading infinitely more complicated and difficult than it ever needs to be.

Chart Below Shows a Clean Simple Price Action Chart, I prefer this over cluttered charts.

Chart Below is “Cluttered and Messy” with many indicators and confusing grids and histograms, Useless!

Now that you have a basic understanding of the why and the how of the KISS method, you can begin to work on practicing its implementation. Practice trading specific price action strategies combined with support and resistance levels for at least 3 months on a demo account, or until you are consistently profitable, before attempting any of this on a real money account. Keep in mind that trading is inherently risky and this information is for educational purposes only and it is not met as a recommendation to buy or sell any financial instrument. That being said, if you are dead set on becoming a profitable and consistent forex trader, stick with the KISS forex trading method and master the concepts outlined in this article and you will begin to see that profitable trading does not need to be complicated.