Technical forex indicators can be useful tools in your trading arsenal. In fact, the first thing a newbie trader does when they learn about forex indicators is to pile as many of them on as possible on their charts . When that doesn’t work and they are losing money hand over fist, they then spend most of their time scouring the Internet for the “holy grail” of indicators that will tell them exactly when to buy, sell and get out.
Unfortunately, to be successful at trading, it’s not that easy. It requires a lot more work and patience than simply following one (or a hundred) indicators- if it was easy, there would be a lot more rich traders in the world!
Here at Forex Indicators HQ, we’ve all gone through the “grab as many indicators as we can” phase. In fact, we consider it a rite of passage for any wannabe greedy trader in hunt of the big bucks. Whenever we come across a new trader and they start talking about RSI, Stochastics, Bollinger bands and all the other fancy and complex indicators they have on their charts, we give ourselves a small knowing smirk, a shake of the head, and reminisce about when we were young and foolish with a full set of hair.
If you are at that stage or just new to it all, here’s a little time-saving tip that will probably shave you a few months off your learning: forget the indicators. Or at least, limit them. Technical forex indicators should be used as confirmation or a supplement to your trading – they should not be your entire reason for making a trade.
So if you aren’t meant to use forex indicators as your main trading tool, then what the hell should you use? Well, the clue is in the title of this post, dear readers, the answer to that question is PRICE ACTION.
Price action is used by the professionals and by the most successful traders out there. We’re not saying its the holy grail and we’re not saying every single successful trader uses it, but learning about it and using it can help improve your odds at being successful. Trading is about putting the probabilities in your favor to get an edge. Mathematics is a powerful thing to have in your corner.
What exactly is price action? Price action is simply the reading and interpreting of the naked charts in front of you. By looking at the bars or candlesticks that are formed in real time, you can start to develop an “intuition” or understanding of what the market is doing and potentially predict what price may do.
Price action is not an exact science and has a lot of discrete elements about interpreting it. One person’s view of can be different to another. Because of this, learning price action can be difficult and take time but there are plenty of resources out there to help you get started!