It seems pretty obvious that the more complicated we make trading, the harder it’s going to be to make real money trading forex. For whatever the reason, people just don’t seem to how to trade a forex day chart. If all these “magical” indicators and robots worked, why are there so many people crashing their accounts?
All these overpriced indicators provide absolutely NO insight to the market! So, why are people spending their hard earned money on all this garbage? Most traders don’t really have a clue what’s going on in the market. They would much rather just fill their charts with indicators telling them when and how to trade. I don’t mean to come down hard on indicators. Truth be told that’s exactly what I used when I first started trading.
To prove it, here is an old chart of mine. This is how I used to trade. Needless to say, just like the majority of the people who trade forex, I did not have much luck with this. That’s when I started to think this through. Why am I trading something that I don’t understand?
The indicators were doing the trading, NOT ME! I just went along for the ride. Think about that for a second. I was basically just an inanimate object waiting for random lines to cross, telling me that I should open or close a trade. How in the world could I make money trading forex, if I don’t even understand what I am looking at? It was then that I decided to listen to what all the professional traders had to say on the subject.
I noticed two words that came out of most of their mouths: PRICE ACTION! It was so obvious, I couldn’t believe it. Do you think that the most successful traders in the world are really worried about what a couple of Stochastic lines are doing? The whole point is that they don’t need them or any other indicator for that matter.
Their own eyes are their best indicator. If you don’t believe me, all you have to do is look at the history of the markets and how traders became successful. There were legendary floor traders at the beginning of the stock market who became millionaires just by following the movement of the price. They didn’t even have charts, much less indicators!
That’s when I dropped everything, completely cleared my charts of all indicators and began to look at my forex charts, as the purists call, naked. There was nothing blocking my view of the price. No Moving Averages, No Stochastics, No MACD, No RSI, NOTHING but a simple bar chart. I would love to tell you that the first day I did this, I instantly saw the holy grail and I was going to be rich by the end of the week. The truth is I didn’t see anything.