Indicators – 3 Reasons Why They Will Hurt Your Trading

Posted on June 11, 2010 by Yohay
Filed Under Forex Opinions, Guest Post | 9 Comments

Guest post by Jason Madison of beatwallstreetnow.com

Indicators are widely used by traders, but just because something is widely used doesn’t that mean it’s good. In fact given that 95% of traders fail it’s probably best to stay away from the herd unless you want to end up in the slaughterhouse. So, here are the top 3 reasons why using indicators will lead to your trading demise.

1. You will lose because it lags.

So the whole point of indicators is to forecast what price is going to do so that you can open a trade and profit, but it’s pretty hard to do that when you get in on the move too late and that’s what happens when you rely on indicators to make your trading decisions. Indicators don’t forecast price movements like people like to think they do, but rather they only give signals after movements have occurred. This will cause you to enter the market too late to profit.

2. You will lose because real traders don’t use it.

Do you think the world’s elite traders are sitting around waiting for indicators to tell them to take a trade? Well let me tell you they most certainly are not. You see they know that indicators lag and because of that they don’t use them. You have to realize that these are the people you are up against and if they are getting into to the market while you’re sitting on the sidelines then they are going to beat you every time.

3. You will lose as long as you continue to use indicators as a crutch.

If you want to become a successful trader then you need to stop relying on indicators and learn to read the price action for yourself. Once you learn how to analyze what price is doing in real time your trading will improve dramatically. Instead of waiting for an indicator to get you in late you can learn to read the price action so that you can get in quickly and profit.

Relying on indicators will only hurt your trading. If you want to become a successful trader that is able to profit at will then you need to understand price action.

If you would like to learn more about price action discover how you can learn the secrets to trading for a living then visit BeatWallStreetNow.com

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Comments

9 Responses to “Indicators – 3 Reasons Why They Will Hurt Your Trading”

  1. larry on June 11th, 2010 1:23 pm

    thank you

  2. Usdcad Technical Analysis & trade Setup on June 11th, 2010 4:12 pm

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  3. logan branjord on June 11th, 2010 6:20 pm

    indicators will not hurt your trading. Though most of the standard systems fail, so too does most of the standard price action strategies.

    No one feel the need to follow these kind of comments. Everyone is different and generalizations like this will hurt you more than anything this guy says.

    Come up with your own system. Follow your style of trading. Don’t stay away from any time frame or indicator because someone tells you to.

    If you listen to this guy, you are running in the herd already. If you make your own decisions, you are already broken off from the pack.

    (FX/Stock trader 4 years, all 4 years over 10%)

  4. Casey on June 11th, 2010 10:01 pm

    Jason,

    I use Price action just like you. However to say that price action is the only way to trade is not true. Indicators are lagging but they are popular for a reason there are many successful indicator traders.

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  6. jpip on June 12th, 2010 12:45 am

    200 day sma, stochatsics, bollinger bands, rsi and atr are used by masters too… I call them indicators… don’t you? This is the first post i don’t like so far, it seems a book ad.

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