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Nial Fuller

NIAL FULLER
Professional Trader, Author & Trading Coach

Is Information Overload Drowning Your Trading Success?

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By in Forex Trading Blog Last updated on | 26 Comments

informationoverloadInformation and knowledge can only take you so far in life and in trading. Everything has a saturation point where “more” stops being better, and this is very true in trading. You can hit a mental saturation point in trading, this is the point where you’ve absorbed all the trading theory and knowledge that you need to trade effectively, and by taking in more knowledge / information / training beyond this point you are actually hurting your chances of trading success. Think of your brain like sponge, a sponge can only hold so much water before it gets saturated, and once it’s saturated there’s no point in putting more water into it…you need to start using what’s inside the sponge (your trading knowledge) instead of pointlessly trying to pump more into it.

Knowing what the latest Non-Farm Payrolls numbers are (I have no idea what they were and I don’t care) is not going to help you become a successful trader. Knowing ten different trading methods isn’t going to help you either. Over-analysis is a very real and dangerous condition that dooms many trader’s careers because it causes them to second-guess themselves too much and question everything they do, unnecessarily. This condition is present in many other professions as well, not just trading. It’s why all great athletes regularly consult with psychologists, especially golfers and tennis players where the prize money is huge.

A good trader gone bad…

Meet “Bob”, Bob is a member who I helped via email, his story is probably similar to many of yours, I’ve changed his name to Bob to conceal his identity per his wishes.

Bob was doing very well after learning my price action strategies, he was making slow but consistent gains each month in his relatively small trading account. However, I noticed that he was emailing me a few times a week asking about different economic reports and what their implications “might” be for specific markets. He was also sometimes asking me about different trading strategies and trading systems and as time went by I quickly realized that Bob was doing what so many other struggling traders do; he was shooting himself in the proverbial foot. Bob, like so many other traders, was his own worst enemy in the market, and he was slowly but surely defeating himself after a string of excellent trading.

What was going on inside of Bob’s mind as he was transitioning from a good trader to a bad one? Simply put, Bob was trying to force unnecessary ‘water’ (information) into his sponge (his brain) when it was already at the saturation point. This was causing him all types of different problems, some of which will probably sound very familiar to you:

  • Bob was becoming distracted by too much market related information and data
  • His confidence was slowly declining as all the extra variables he was trying to absorb began to conflict with each other, causing almost constant doubt and uncertainty about whether or not he was taking the right trades and what to do after he entered them.
  • Bob was convincing himself out of good trades and into bad trades, again this was from trying to absorb too much data like economic reports and other news variables, as well as the differing trading methods he was trying to use simultaneously.
  • He was mismanaging trade entries and trade exits as doubt began to permeate his mind and failure to trust his ‘gut’ trading instinct started to take hold.

The point you should take away from Bob’s story is this: you can reach a point in your trading knowledge and understanding when learning more trading theory or absorbing more economic news is simply going to be counter-productive. Think about the analogy of the sponge that I described above; a sponge with too much water is useless, once you have the right amount of water and soap in the sponge it’s time to start cleaning. Similarly, if you don’t start using your trading knowledge and skill you will eventually reach a point where learning more will start to create stress, doubt and uncertainty, and these things are clearly not conducive to long-term profitable trading.

Stop thinking, start doing

over-thinkingsucksKnowledge and theory are great, but without practice and experience they are nothing. Most employers are looking for “experienced” candidates first, if they have the knowledge and theory that’s great too, but experience trumps everything in basically every profession in the world, including trading.

With everything in life, trading included, there comes a point where you simply need to stop learning and start doing. Experience is something you really can’t ‘learn’, you have to let it build up naturally, it’s like a very valuable commodity and the more you have of it the better.

You obviously need to first achieve a certain level of trading proficiency, and this involves learning and mastering an effective trading strategy like my price action method. However, once you achieve this proficiency it’s time to start getting some real-world trading experience and close up the ‘books’. Taking in every news event, trading strategy, every bar on the chart, over-thinking and over-analyzing market data will start to actually undo all the time and hard work you put into learning and mastering your trading method in the first place. In this way, continuing to take in market data (news variables and other trading methods / systems) can and will destroy your all your efforts at becoming a skilled trader.

Imagine you’re learning to sky dive. In the early stages, you need to jump tandem with a trained professional sky-diving instructor. However, you can only do this for so long if you want to learn to jump on your own. Eventually, you need to learn to trust your gut and be content in knowing what you already know and what you’ve learned from your instructor, everything after that point simply becomes a distraction and is inhibiting your progression as a sky diver.

Similarly, in trading, you can learn to trade from an experienced trader like myself, but after you’ve obtained the knowledge and mastered the trading concepts, it’s time to ‘take off the training wheels’ and start trading yourself. Nothing can replace real-world trading experience, that is to say actually analyzing the market and placing / managing trades. You have to learn to trust your knowledge and trust your gut in trading, you cannot continue to tread water by thinking that there’s “more to learn” and once you “learn it all” then trading success will magically be yours. At a certain point, once you’re proficient in an effective trading strategy, you’ve got to just say “it’s time to roll” and start applying your knowledge to the charts and stop trying absorb more data and theory.

Do you think yourself out of good trades and into bad ones?

It seems to be a part of human nature to want to cloud our minds with conflicting data and make things more complicated than they need to be, humans are addicted to this type of behavior. A joke I often tell to beginning traders is: “Thinking. It’s bad for you.”, and what I mean by that is that traders literally ‘think’ themselves out of good trades and by doing so they also ‘think’ themselves into bad ones, in essence, too much thinking IS bad for you. You need to have the discipline to stick with what you’ve learned and be content in knowing one method inside out and really mastering it, and you need to stop trying to absorb more and more market data and variables.

How many times have you found what you felt was a ‘perfect trade signal’ and you set up your order but right before you pulled the trigger you went out and started looking for news items or trolling through trading forums to try and get further ‘confirmation’ of your trade idea? What inevitably happens is that you find another guy or girl on a blog or forum with the complete opposite view on the market you were going to trade, you are now confused and you delete the order for the trade setup you were just so confident in. This is how many traders sabotage their trading and second-guess themselves, it’s addictive and it just won’t help you at all!

Another example is letting an opposing trading strategy convince you out of a trade that makes perfect sense in the context of your primary trading strategy. This is why you should only focus on one strategy and it’s also why you should stop trying to look at other strategies because they will probably contradict your current one and you’ll be left with nothing but confusion and frustration. You obviously need an effective trading method, but once you have one there is no point in pursuing other methods. Finding an effective trading method is not the difficult part of trading, the difficult part is sticking with one effective method.

Clarity…

whiteroomFinally, I want you to imagine yourself in a white room, it’s totally clean and minimalistic, and you have a single chart open on your trading platform with nothing on it but candlesticks. You’ve totally removed all the clutter from your trading environment, your trading platform and your mind, you are calm, confident and relaxed. This is how you need to start each trading day, maybe not in a ‘white room’ with nothing else in it, but you catch my drift here.

I actually want you to be arrogant about ignoring news data, other trading methods and anything outside of your trading plan; turn a blind eye to what the rest of the world is saying and just focus on the strategy you’ve mastered. The first step is learning an effective trading strategy that you can build confidence in and eventually master, to get started, checkout my price action trading course for more.

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About Nial Fuller

is a Professional Trader & Author who is considered ‘The Authority’ on Price Action Trading. He has a monthly readership of 250,000+ traders and has taught 20,000+ students since 2008. In 2016, Nial won the Million Dollar Trader Competition. Checkout Nial's Professional Trading Course here.
  1. Alf January 21, 2015 at 5:15 pm

    A great article, a great advice!
    many thanks Nial.
    ALF

    Reply
  2. Robert January 20, 2015 at 8:37 am

    Thank you Nial,
    Your newsletters are great. I have been searching for the Sniper article for a friend and haven’t been able to locate it. It is great advice too!

    Reply
  3. Sanjay January 19, 2015 at 5:24 pm

    Great Article, you have make me wait for your article every week.
    This one is one of the best. An strategy to make 100 to 1000 is this one, wait for trade for weeks to align with Fundamentals & Technicals and when they align you don’t eat breakfast but you eat Six Month’s food in one trade by risking only what you are comfortable with.

    Thanks for Big Idea Sir.

    Lets analyse than Lets wait……..

    Reply
  4. Wendy January 19, 2015 at 12:41 pm

    Hi Nial,

    Very good article. It is helpful to keep learning and readjust my mindset.

    Thanks,

    Wendy

    Reply
  5. Mzabalazo Nsibande January 19, 2015 at 6:19 am

    what are we in this world of trades without your guide and advisory articles ,much respect once again mr Fuller

    Reply
  6. Amos January 18, 2015 at 2:00 am

    Great article to commence 2015 on the right trading path. I love you Nial and thanks a great deal for sharing your trading wisdom so selflessly. Education + mindset is the key. I have set my goal for this year and i am confident that with God, and your mentoring advice, i will accomplish my target.

    Once again, thanks a great deal.

    Reply
  7. andy January 17, 2015 at 10:47 pm

    Wow, Nial. I don’t know how you do it but every time I take a wrong move along comes your weekly email almost telling me exactly what I did wrong. Early last week I decided to try a few lots on an oil short. It went very well and I made a great profit on it. I was euphoric! I was so excited I tried again. Loss. And again. Loss. Oil had turned around but I was ‘convinced’ it would still fall. No way, Jose. All the profit I’d made went within about 7 trades. Stupid! I will not be doing this again.
    I decided to go back to school and learn some more.
    Thanks for your articles. They’re absolute gems.
    Andy Moore

    Reply
  8. Boby January 17, 2015 at 12:10 pm

    Your article really inspired me. I hope this year will be better than the previous year. thank you so much Nial

    Reply
  9. jessey January 17, 2015 at 11:38 am

    Thank a lot Nial. you’re a protégé. you really do know how to get to one .am getting addicted to your blogging.

    Reply
  10. Vijay Sonawane January 17, 2015 at 7:37 am

    Nice 1 Nial, thanks!

    Reply
  11. demola January 17, 2015 at 2:05 am

    Really,your articles are always helpful.If one should stick to them, will be in the market for a long time.Vital info that boosts trading plans.Appreciate this

    Reply
  12. Mr sha January 17, 2015 at 1:20 am

    You are the best Nial, you get to the point the fact, fun to read easy to understand
    I alway enjoy reading your letter, you are great keep up the good work

    Many thanks

    Reply
  13. FrankyBoy January 17, 2015 at 12:46 am

    “One trade can make or break you” Tell me about it my matey. Despite all the hype for USD I have been shorting USD/CHF for the past week. Yesterday I a made a small fortune when CHF went ballistic! My secret? – Do my own research and ignore the news! Great start to 2015! What you say Nial is spot on!

    Reply
  14. Pete January 16, 2015 at 11:23 pm

    Thanks Nial. You plainly state what a trader needs to learn. Discipline, skill, attention and belief. Only by having skin in the game can you truly appreciate the wisdom in the article.

    Reply
  15. Hendrik January 16, 2015 at 9:05 pm

    Always good advice Nial.
    Adding to your article, spread your risk over multiple accounts and minimal 3 brokers. This is first level risk and money management.
    Decrease risk dramatically in this high volatility times or do not trade at all and wait when the storm is over. There are going to be plenty of new opportunities after this volatility storm.

    Reply
  16. harpreet singh January 16, 2015 at 4:57 pm

    Thanks Nial, great article

    Reply
  17. Lakes January 15, 2015 at 11:11 pm

    Thanks for the article. It’s a water to my soul. Good one!!!

    Reply
    • Daniel Howard January 17, 2015 at 12:04 am

      I have to leave a comment concerning this comment. If you want to feed your soul, read the bible. Although I like Nial and what he says, this is just trading advice.

      Reply
  18. oghenemaro paul January 15, 2015 at 10:08 pm

    good one nial. this article has just made my day

    Reply

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