The Benefits of Trading With Price Action
I cant help but notice that every time a newbie forex trader is wants to learn more about how to trade, they rely solely on indicators. They spend all their important time learning about useless tools such as RSI, Moving averages, MACD, and all other generic indicators.
What they do next is cover their charts with as many of these lagging indicators that they can find. Believe it or not, trading price action is something that doesnt even come to their mind. A lot of this has to do with the fact that there are many traders who cant decipher what the market is telling them without having to look at these generic indicators. They have no way of knowing which way the market is headed.
What most people dont realize is the fact that when you trade with indicators, you are essentially trading other peoples signals. All you are doing is hoping that they are giving you correct information, because YOU truly dont have any idea of why you are taking a trade. You are essentially going on blind faith.
But the whole idea of trading forex by just using price action is that you get to eliminate all the clutter that is on your screen. By doing this, you get a clean and unbiased look at how the market actually moves.
I think one of the things that many traders have to struggle with is the fact that when you use indicators, sometimes you are left with two separate indicators giving you opposing signals. For instance, one indicator will tell you to buy, while the other one will tell you to short.
So, essentially you are being held hostage by your indicators. This is one of the consequences of not learning price action. Instead of being in the dark, you know exactly which way the market is headed.
Im sure you can see why this would be an uncomfortable position for a trader to be in. All they are doing is waiting for a couple of random lines to match in the same direction in order to take a trade. The sad thing is that most traders dont even know what these lines represent.
The next time you catch yourself doing this, I want you to think about the New York Stock Exhange Floor, and think about all the floor traders out there who make a lot of money trading by not even using trading charts, much less using indicators. - 23310
What they do next is cover their charts with as many of these lagging indicators that they can find. Believe it or not, trading price action is something that doesnt even come to their mind. A lot of this has to do with the fact that there are many traders who cant decipher what the market is telling them without having to look at these generic indicators. They have no way of knowing which way the market is headed.
What most people dont realize is the fact that when you trade with indicators, you are essentially trading other peoples signals. All you are doing is hoping that they are giving you correct information, because YOU truly dont have any idea of why you are taking a trade. You are essentially going on blind faith.
But the whole idea of trading forex by just using price action is that you get to eliminate all the clutter that is on your screen. By doing this, you get a clean and unbiased look at how the market actually moves.
I think one of the things that many traders have to struggle with is the fact that when you use indicators, sometimes you are left with two separate indicators giving you opposing signals. For instance, one indicator will tell you to buy, while the other one will tell you to short.
So, essentially you are being held hostage by your indicators. This is one of the consequences of not learning price action. Instead of being in the dark, you know exactly which way the market is headed.
Im sure you can see why this would be an uncomfortable position for a trader to be in. All they are doing is waiting for a couple of random lines to match in the same direction in order to take a trade. The sad thing is that most traders dont even know what these lines represent.
The next time you catch yourself doing this, I want you to think about the New York Stock Exhange Floor, and think about all the floor traders out there who make a lot of money trading by not even using trading charts, much less using indicators. - 23310
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To learn more about price action trading, make sure to check out forex millionaires.
posted by Mr. Forex at
5:19 AM
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