Saturday, December 13, 2008

Learning to Trade Forex Without Indicators - See the REAL Energy of the Market

Whenever you tell somebody that they should learn to trade forex without indicators, they look at you with a puzzled expression on their face. They say "how would I ever know when to buy or sell?" It's an honest question, especially because so many traders have gotten accustomed to using indicators like Stochastics, MACD, and moving averages. My question to these people would be "how do YOU know when to buy or sell?"

Is it just because Stochastics shows as overbought or oversold, or because there is some kind of price divergence on the MACD, or because a couple of moving averages crossed each other. Don't you think that there is a little more to it, than that?

Think about what these indicators really are? They are just formulas that people use irregardless of the situation of the market. It seems kind of strange that traders would just follow a static formula as their main reason why they would open and close a trade.

When you take away those indicators, you are just left with, you and a basic price chart. It may seem daunting at first to figure how you are supposed to trade when you don't really know what you are looking at.

But over time you'll notice the market has an energy. It goes up, down, and it ranges. But more importantly, there are patterns within these movements which can provide an incredible service to the trader. But this can only be seen when you take the first step, which is to get rid of indications and see the market in its purest form.

John Templeton 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.

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