All language subtitles for 1. Combining Tools For Better Returns

Now that you understand how to use a lot of these different types of tools or indicators, this is an

extremely important lesson.

Sometimes it's this type of lesson that separates those who are going to succeed from those who may

not succeed as much.

And really what you want to be looking at is how do we combine the tools for better returns.

Right.

Which which combinations are how many should we be using is really the question we're going to ask here

in this lesson for you to take away and think about how you want to build up your strategy as far as

being an investor and a trader.

So first off, think about using more than one tool instead of depending on one tool.

Using one tool is better than no tools, is better than guessing or I like the color of their logo.

One of the ways people invest, you know, using one tool is better than no tools for sure.

A sweet spot seems to be when you start using at least two tools, your two tools is better than one.

You really what we're thinking about here is having like a primary tool that you really use all the

time to kind of identify, buy and sell opportunities and then using another one to kind of confirm

that.

So the they kind of match up that way.

And we'll get a little more detail on that next.

Couple of lessons here.

But that's the idea.

I'm using one really tool to determine things as a primary and then I use it for confirmation.

I could use go up to three to four.

You know, maybe that's OK, too.

You know, it's even more confirmation around that.

Those we see there's a little bit of diminishing returns, but you need to know more indicators very

well inside and out.

But you can do a three to four.

You start using five or more.

That seems to that's a little too unwieldy as you can be aware of all the stuff like we've learned all

a lot of different tools in the course.

And so you can be aware, like, oh, I see something, maybe I should look closer, but it wouldn't

be this like a primary tool for you.

And should you use all the tools and all the other tools in the wider indicator universe out there?

Well, no, that's just crazy talk.

So let's talk a little bit more about that as far as how many tools to use.

And we really only use combine these tools for better returns.

And it's really a core concept of technical trading actually is a primary on its own.

Well, better than none can be wrong, as we know that you can have false signals.

You have noise out there, you have whipsaws, you have all sorts of things.

And so nothing is foolproof.

So it can be wrong.

And so, by a real good way to do it is having a primary indicator that you primarily use and then have

a confirming secondary indicator in using them together to confirm that primary one is much less likely

for a false signal.

You're not getting a false signal on one.

You'd have to be getting a false signal on to, you know, for it to be kind of not as not as strong

an indicator.

If you add a third or fourth indicator that starts to add some complexity and possibly some diminishing

returns, then possible you can do it.

I would say starting off, if you're newer to this, certainly start with one and two primary and secondary.

But if you start adding some of the simpler third or fourth indicators, you can do that.

But there might be some diminishing returns.

And the reason for that is you start now, you may be using various inputs or timeframes, and that

can always be tricky as first different time frames that work better with different types of indicators.

There's various trading rules that you establish this for when you're buying, when you're selling,

and adding more complexity to it would be adding a third and fourth indicator.

It's hard to become really rock solid and really knowledgeable with so many tools trying to use them

all the time, every day or every time.

You're trading a great to be aware of it.

Very important to be aware with.

There's unexpected opportunities that come up with.

So you might see something rare, like an island reversal, as we learned in our gap, a trading section

here.

But you're not going to be necessarily using that as a primary indicator.

For example, if you are, that's great.

Just find the secondary one.

But to confirm it.

But it's hard to be an expert when you have too many tools.

So you don't have to worry about that.

And you can experiment with the different tools you're learning in this course with your paper trading

or back testing and see how you want to use that.

And then the indicators can be in conflict.

A lot of times they don't confirm each other, but they might be actually opposite and that can happen.

So that can confuse this thing, too, and add more indicators that that's more likely.

So I would say a primary and a secondary is really core.

A third is fine.

A third can be OK, especially if you're feeling real comfortable with all three.

That's great.

Fourth, you're really going to be extra level.

That's OK.

But you understand you might be experiencing some diminishing returns if you start if you start seeing

your performance go down as you start adding an indicator, then you might want to back off and go to

one or two or possibly three and then five or more.

Now, that's really not advised.

I mean, again, being aware is very important to be aware of things like different chart patterns or

candlestick patterns or whatever it is.

Being aware is good, but using it as your really primary way of trading and trying to, you know,

every day is like a whole new day.

As far as using the indicators, you know, that's not really advice and that's not going to help you

to be successful.

And you might be thinking, well, is there one common strategy?

Those are one like, tell me, should I use this list candlestick with this moving crossover price crossover

crossover moving average or or something like that there is there one diamond strategy?

No.

If there was, then everybody would be using it, you know, so there is no dominant strategy.

Plus this would be a real short course, would be like three minutes.

Just use this.

Right.

So there's no one dominant strategy.

Now, there are some classic examples that are more proven for sure.

That is that is true in some ways that the work better together.

And we have upcoming lessons on that.

It's going to look at these classic examples, but also how to kind of put it together to win.

Let's see if we're creating your own type of, you know, kind of combining of the tools.

And I think that's a good way to do it.

Actually, you can start with some classic ones.

You can look at classic combinations, but then think about what you learn in the course and really

kind of gravitate and create your own.

You know what what what lessons really, really, you know, sung out to you.

What really did you really grasp quickly or feel real comfortable with?

You know, that's a good indication that there might be a good indicator for you.

Remember, all the indicators are good.

There's no bad indicators, just some might be better than others in different situations.

And as we'll learn later, lessons that some are better as far as being complementary to one another.

So that's coming up.

What are you comfortable with?

What are you excited about?

What you might have indicated, like I love this.

I want to use this every day, and then it makes sense to you.

You know, if it does if you're using an indicator because you feel forced to use it, because somebody

on YouTube or somebody on this forum said you got to do it this way, you know, and it doesn't really

make sense to you or you don't really buy into it as much, then then skip over, pick a different indicator.

You know, everybody has their favorites and more importantly, things that work well for them.

And that's how you can really test to see what's working well for you.

Where we talked earlier lesson well, back testing in paper trading.

Just a reminder on that.

Back testing just for free.

Most platforms offer that for free.

Almost all of them do.

Or have some sort of that, if they don't, you might want to look at a different platform I exposed,

but where you can test things, where you can look at the indicators that are interesting, you pick

a primary and a secondary, maybe a third or fourth, and then you can back test that over historical

data, real historical data to see how that would have worked out.

And you can start seeing if it's working for you as far as the actual performance by back testing it

over historical data, real historical data, and then paper trading is basically trading with fake

money.

Right.

You're not investing your own money, so you're paper trading with this kind of fake account and fake

money that you can set up, whether it's called a paper trading account.

So you can there's another way for you to try out different indicators and what's working for you,

what you feel comfortable with.

Once you start really looking at charts and applying these indicators, you're going to see some that

are going to just really make sense and, you know, grab it.

You're going to gravitate to so use paper trading to kind of practice with that as well.

So, you know, figure out and create your own is good.

I'll show you some classic combinations are coming.

But really think about back testing and paper trading can be very, very powerful as far as, you know,

doing what you love to do.

Remember, in the end of the day, you've got to be two things.

You've got to be successful as far as with your trading.

You want to be successful with your trading.

That's most important or very important for not successful, then that's going to cost you a lot of

money.

And so you want to be successful, but you want to enjoy what you're doing, too.

You don't feel forced into something.

You want to you have it makes sense that you enjoy it, that you're having success and having that great

attitude towards your trading and that you're having financial success with it, too.

And that's that's the real whole key to this, too, as well, as opposed to, let's say, finding a

magic indicator or being forced on a certain path.

So combine the indicators very important.

Certainly have a primary and very good to have a secondary three or four.

OK, to get more than that might be to be aware, but that might be a little bit more of a caution sign.