Have you ever stopped and wondered what exactly is the purpose of all these indicators that are on your charting platform? I know the obvious answer is "to help me trade". Fair enough. But does it really? Don't you think they are doing a great disservice to you?
I say this for a a number of reasons. The first one being how many people out there are actually having success using these indicators in the long run? I don't think it could be too much. After all, 95% of traders are losing money. If these indicators worked and they are supposed to be completely mechanical, why is 95% of the market losing money?
The rules of these indicators are fairly universal, and since they are theoretically traded in the same manner, irregardless of the trader, they should result in positive trades. That is, of course, unless they don't work.
Also, think about what kind of a crutch, indicators actually are. Instead of you looking at a simple price chart, and trying to "figure out" where the price is headed based on the prior price movement, all these indicators like Stochastics, Moving Averages, MACD, Fibonnacci, are literally giving you their opinion of where the price is headed.
Sorry, but that's just not the way it should work.
In trading, you shouldn't take a trade unless its your opinion, not somebody or something else's. You should know exactly the why the market is headed up or down, and it shouldn't be because a couple of moving averages crossed each other.
John Templeton, creator of Trading In The Buff has been a successful forex trader after learning how to trade price action. Once he understood that all he needed to trade forex was on a plain chart with no indicators, his profits soared. You too could learn how to trade forex. |
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