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The last 10 or 15 years
of trading has been
quite interesting. Obviously
technology has had a major impact
on just about every facet of the
world. It's not any different in
trading. But has it really
helped us?
 One thing is obvious, is
that we have a lot more toys at
our disposal than ever before. This
is doubly true for indicators. Even
the free charting platforms, have hundreds
of different kinds
of indicators at your disposal.
But do these actually benefit
you?
In this forex trading
tutorial, I will go over all
the negatives that trading indicators
have.
They are all
lagging: It's true,
they are only telling you what you already
know. For example, the stochastics
indicator. When you see the two lines
cross upward and downward signifying a strong
move one way or another, the move has
already happened. The indicator
is too late to the party. As opposed
to something like price
action, which provides a
trader leading
information.
No
one really knows what any of them
do: If you ask
most traders about your basic
indicators like stochastics, MACD,
RSI, etc... most can tell you about how to
use them for a mechanical trading system
but if you are looking for a deeper
understanding of what they do, chances
are most people don't have a clue.
They'll usually just tell you that they'll
buy when the two lines cross each other.
That's about the extent of it.
If they are so
useful, how come so many people are losing
money?: Seriously, since
indicators are supposed to be tools that
are 100% mechanical, why are there so many
people struggling? The trading rules should be
somewhat universal, yet there are only 5%
of forex traders actually making
money. That's something to think
about.
You
are only as good as your indicators
are: When you use
indicators, you are going to live and die by
them. This basically means that all
traders are created equal, and you better hope
your indicators are having a "good day" reading
the market, otherwise its going to be a long
day for you.
You are not
even looking at the price:
Don't you find it kind of strange that
technically you don't even have to look at the
price of the currency, when you use
indicators? All you are really waiting
for are all your indicators to line up. The
price is really not that important, if you go
by that rationale. When you think about it like
that, it is kind of absurd, don't you
think?
Check out Trading In The
Buff to Learn How To Trade
Forex Successfully Just Using Price
Action.
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