Life is really simple, but we insist on making it complicated

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By Confucius

Complexity bias is our tendency to look at something that is easy to understand, or look at it when we are in a state of confusion, and view it as having many parts that are difficult to understand.

Let's take a real life example. In this unprecedented time, if you are hard pressed for income (since many are now retrenched, suffering from wages cut, unemployed,etc), one of the way might be to look at reducing your expenses.

So, one person might go into extreme and examine his phone bills, breaking it down by days, name of persons he called out , time spent, etc. He hopes that such analysis would help him to identify the people he spent more time calling and if anything can be done to reduce that.

But, if you know that the phone bill was just 100 bucks a month and other more glaring expenses like food groceries that costs him 1500 a month, then you would know that he is going after the wrong culprit. Again, using the Pareto Principle of 80/20 rules, he should first tackle the large items bills, in this case the food groceries. Is he overspending in certain brand or food items that are not a necessity and unhealthy ? Is there a house brand that he can substitute instead ? How about accumulating his purchase to a certain price level to enjoy a 5% discount ? Are there other groceries stores that sells cheaper products albeit a further walking distance ?

Using this analogy and applies it to Trading, it works the same way too.

By going long on NZDUSD at the first buying opportunity and hold to current price , it would yield a trader about 80 pips profits. If he is a day trader, this might be adequate for him (depending on his time line, strategy, profit taking reasons,etc).

When we start to complicate matters and bring in Covid-19 cases to interpret the price action or how the unemployment data will affect the economy, we suddenly lose focus on the simple things of life. We refuse to accept and believe things can be so simple.

Make your life simple, stress not.
Nota
0.64181 also the first buying opportunity is a strong support.
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