If you are still struggling to become a profitable trader, it’s time to drop the indicator crutch and learn to day trade with price action. Most new traders come to the trading table thinking that day trading will be easy. They honestly think that they will be different than the other 90%+ of day traders that fail quickly in the first few weeks or months of their initial entry into the day trading world. Once the initial shock hits them and they begin to understand that it isn’t so easy after all, they then begin to search for the “holy grail” in trading that they think profitable traders have found already but are keeping secret.
I’m here to tell you that the holy grail of trading is nothing more than learning to read a price chart, which is basically learning to read and understand the price action that prints to your trading chart. The holy grail of trading is throwing out the indicators that do nothing more than put you into losing trades at the worst possible times in many cases. There are actually profitable traders that do nothing more than fade some of the common and most popular trading indicators. When I say fade, they take the opposite entry that the indicator is showing them.
Think about that for just a moment. If there are traders that are making a living fading indicators, what does that tell you? Hopefully I don’t have to answer that question for you. Here is what Johnathon Fox had to say in a recent article about indicators that was posted at www.forexpros.com.
The first thing many traders do when they come to Forex is begin the search for the “Holy Grail”. This search normally leads them to trying the many different indicators and black box systems. Unfortunately this is the where so many traders go wrong!
The Problem With ‘Indicators’
Once a trader begins using indicators it is a slippery slope. The problem with indicators is the mindset the normally comes along with them. When a trader makes a loss they think that if they can add another indicator to what they are using, they will have a better chance of making a winning trade. This cycle continues on until all the trader can see is a bunch of coloured lines on their chart. This would be fine if it gave traders success but then end result always ends in confusion and another search for more indicators.
Another major reason traders look to indicators to use in their trading is because they are yet to take full responsibility for their trading actions. When the trader makes a winning trade they are only too happy to take the credit, but when they make a loss they can always fall back and blame the indicator. This failure to take full responsibility for ones actions can cause huge problems for a trader’s psyche.
Get Rid Of The Indicators
There is an answer to these problems and believe it or not it’s very simple and easy. To get out of the darkness that indicators can create traders need to strip their charts bare and begin to watch the Raw Price.
‘Price Action’ trading is the method of using raw price only with no indicators to assess the markets. Price Action traders learn to identify high probability patterns that tend to repeat themselves in the market over and over again. Whilst no two setups will ever be the same, a trader can learn how price normally behaves in certain scenarios and make a profit by positioning themselves on the right side of the market.
The problem with price action is that it’s so easy that it really becomes very difficult for most traders to grasp if they have already learned a lot of bad habits while trading with indicators. The clean charts with nothing more than prices undulating on the chart become hypnotic to these new traders and there is nothing to prompt them to enter and they suddenly become a deer in the headlights and simply give up too quickly.
You see, most people will not learn to see and read the price patterns really quickly. It takes time and hard work, just like it does when learning any new skill. You must force yourself to stay with it and if you will, eventually that light will go off and it will all start to make sense. It’s at this point that you then really have to do your hardest work, which is to continue to study and learn until you can actually see and understand the patterns as they form right in front of your eyes. It may seem impossible at first, but it’s not and if you really want to see it and learn it, you must stay with it, like anything worth learning in life.
If you are currently a day trader and you are not yet profitable, then it’s time for you to drop the indicator crutch and learn to day trade price action. By doing so, you may change your trading results and your finances forever! If you are interested in learning to read price action like a pro, then you will want to follow this link to our PATs Price Action Trading Manual: http://priceactiontradingsystem.com/pats-price-action-trading-manual/.