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The Power of Simple

Occam’s Razor, a scientific principle that suggests the simplest answer is typically the right answer to a given question. This is truly a principle I have lived by simply because it works. I am always fascinated with the origin of things and specifically, the simple thought process behind the idea. For example, have you ever wondered about the origin of numbers? I mean, the numbers 1 – 10 are a part of our everyday life. We see them everywhere, on street signs as we drive, at every store we shop at, on television, in every room in our home whether they are on a clock, in a book, on a kitchen appliance, a scale in our bathroom and so on. Numbers are everywhere, but do you know why they look like they do? Another interesting everyday item is money. Have you ever wondered where “currency” started and how?

Free Trading WorkshopForeign Currency (Forex) trading traces its history centuries back since before the Babylonians. While they were the ones credited with the first use of paper notes and receipts, forms of currency had existed for quite some time already. In the beginning, the value of goods and services was expressed in terms of other goods and services, also called “the barter system”. Limitations of this system were the catalyst for establishing more generally accepted mediums of exchange.

The evolution of means of payment and a reliable store of value began with stones, teeth and feathers. This gave way to metals such as gold and silver. Next, it was governmental paper money. Before the First World War, most Central Banks supported their currencies with convertibility to gold. However, according to some, the gold exchange standard had its weakness of boom-bust patterns. As economies moved more and more to paper money not supported by gold other problems arose. I could go on and on but that is the origin of money in a nut shell. As you can see, money started out very simple with gold, silver, and so on… Of course, leave it to people to complicate things but that’s another story.

Let’s take a look at something even simpler than money; let’s look at how numbers started and why they look the way they do. The number system we use today (1, 2, 3, 4, 5…) is called the Arabic Numbers System. We also have the Roman Number System (I, II, III, IV, V…) which is rarely used in everyday life. While Arabs popularized Arabic numbers they actually date back to Phoenician merchants, according to most historians. Why does one look like 1, two look like 2 and so on? The answer is extremely simple. They are all “angles”.

Don't over complicated your trading strategy.

When it comes to successful buying and selling in markets as a trader or investor, how this actually works is also quite simple yet most completely over complicate it.

March 30th, 2016 – Supply Demand Grid

How to trade using price data, just like the experts on Wall Street.

S&P Income Trading Profit: $1,084.00

Price charts clearly show us “wholesale” (demand) and “retail” (supply) price points in any and all markets. News, indicators, opinions, economic reports and so on are not what Wall Street uses to make successful trading and investing decisions. They simply focus on buying at wholesale prices and selling at retail prices, like I did on the chart above.

Whether it’s trading, or numbers, or how you tie yours shoes, the simple approach is typically the right one to take.

Hope this was helpful. Have a great day.

Sam Seiden – sseiden@tradingacademy.com

DISCLAIMER This newsletter is written for educational purposes only. By no means do any of its contents recommend, advocate or urge the buying, selling or holding of any financial instrument whatsoever. Trading and Investing involves high levels of risk. The author expresses personal opinions and will not assume any responsibility whatsoever for the actions of the reader. The author may or may not have positions in Financial Instruments discussed in this newsletter. Future results can be dramatically different from the opinions expressed herein. Past performance does not guarantee future results. Reprints allowed for private reading only, for all else, please obtain permission.

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