The Benefits of Trading With Price Action
It appears to me that every time a new trader wants to learn about what it takes to trade the forex marker, they will usually spend all their time scouring the internet to and learn about using indicators like stochastics, MACD, moving averages as well as the other common ones.
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.
The thing is when you are trading with indicators, its a lot like trading with other peoples signals. You are only hoping that the information they are giving you is right. The reason for this is because you dont actually understand the REAl reason why you are taking the trades that you are taking. All you hope is that the indicators formula is accurate.
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.
One of the biggest obstacles for traders who are using indicators is the fact that on many occasions indicators will give you two opposite signals. For example, moving averages can be telling you to buy, while MACD is telling you to sell. So you are really just sitting there and waiting for these indicators to align, in order for you to take a trade.
With so many traders not really grasping what price action is all about, they are held hostage with these indicators, as they have to wait for them to match in the same trading direction.
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.
What I would like you to do is the next time this idea of trading without indicators pops in your head, I want you to think about all the floor traders on the New York Stock Exchange. Think about the fact that most of these traders do this for a living without having to even use charts, much less indicators. - 23204
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.
The thing is when you are trading with indicators, its a lot like trading with other peoples signals. You are only hoping that the information they are giving you is right. The reason for this is because you dont actually understand the REAl reason why you are taking the trades that you are taking. All you hope is that the indicators formula is accurate.
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.
One of the biggest obstacles for traders who are using indicators is the fact that on many occasions indicators will give you two opposite signals. For example, moving averages can be telling you to buy, while MACD is telling you to sell. So you are really just sitting there and waiting for these indicators to align, in order for you to take a trade.
With so many traders not really grasping what price action is all about, they are held hostage with these indicators, as they have to wait for them to match in the same trading direction.
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.
What I would like you to do is the next time this idea of trading without indicators pops in your head, I want you to think about all the floor traders on the New York Stock Exchange. Think about the fact that most of these traders do this for a living without having to even use charts, much less indicators. - 23204
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To learn more about trading price action, make sure to check out forex millionaires.
posted by X - Men @ 2:24 AM
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