Why do traders use so many indicators?

They is the majority of people.

Lol please bro

Its crazy that you dont use them, and that the only ones you mention are by far the worst. I have 4 on my chart and can pretty much identify a trend with 80% accuracy every time.

Every indicator that has ever been created is ALWAYS right by definition. Indicators do one thing: they indicate. More precisely, they indicate when certain predefined conditions exist or do not exist. When a MACD turns GREEN it is 100% percent true that the faster average is above the slower average. That does not mean price will rise. It only means that the conditions required for the MACD to be GREEN exist.

Sure it can be argued that some indicators measure erroneous conditions, or have faulty assumptions, but the output of the indicator must always be right. Ultimately, indicators are derivative and do not in and of themselves move Markets. Regardless of what direction the Market moves, if Shocactics is above 80, it is always 100% correct that the output to the underlying algorithm is above 80.

Take a look at the charts below.



In the first example, the Delt Force indicator is GREEN and price is rising. The Delta Force indicator is not correct, however, because price is rising, it is correct because the sum of the individual Deltas for x period is a positive number.



In the second example, Delta Force is GREEN while price is falling. Delta Force is still 100% correct. The computer did not suddenly start making math errors. The sum of the individual Deltas for x period is a positive number, even as price falls.

They are nice pictures, really. However, these were posted two days after the request was mad. Some show nice labels pointing to other nice labels with dollar amounts on them. Others show trades with no information regarding the actual entry from the MT4 Terminal (as my posts showed for the initial trade entries). So, I can't tell where the trades were actually entered. For example, the USDCAD trade that is now in profit in your pic. When was that trade entered in the Terminal?

I don't trade USDCAD given its low D1 Magnitude doesn't match my criteria. However, I grabbed it, through on the Panel, put the System into manual back test mode and this is what I found at the 1.3306 level which is near the level of your pic.

Yellow vertical dashed line represents one (1) of the entry possibilities the System called at that specific Date/Time in USDCAD's history. Using the same chart as your pic:



About a 60+ pip trade over 72 hours with no reversal signal according to what the System showed at the entry (yellow horizontal dashed line) on 2020.2.11 04:30. The problem here is that your USDCAD pic does not show your entry Date/Time. So, I have no way of knowing where to place the System's back test handle (Yellow dashed vertical line) in order to compare entries.

I posted live trades on Georges thread and got a whole load of s41t for doing so. Not from George I may add.
Those trades were set up hours before price had moved, hit target for entry then moved in most cases exactly to profit target and still people tried to discredit.
Same old on FF.
I distinctly remember telling you I was interested in EC,EG, and EJ. I also distinctly remember telling you they were most likely going to get opened Mon/Tues of this coming week. As it happened sometime during Australian evening, those trades were auto opened by my management EA when parameters were met. I don't trade Friday as as a rule but i left these open as I had mentioned them to you.
I already had closed trades this week and some remain open.
I posted those that seemed relevant.

USDCAD entry added to pic inc within this post.

NZDCAD and NZDCHF with entry.

EDIT:I added a poll to this thread.

This predefined condition repesents the trader's understanding about price which raw price data by itself is not able to reveal this condition, if it could the derived indicator would not be necessary.

Therefore, the indicator is a tool that's created with the use of mathematical formulas that turns the trader's conceptual ideas about price into visual aids using the brokers tick data. Without this tool this predefined condition cannot be seen from price alone. That's the purpose of indicators.

This means that conceptual ideas about price with characteristic precondition precedes the tool.

When the trader says he doesn't need indicators that he trades naked charts it means either of a few things,

1. The conditions about price can be gleaned from price shown by ohlc alone,
2. The trader's condition about price is captured in other tools, example the dom,
3. The trader is unable to formulate the math to create tools that represent his conceptual ideas,
4. The trader has no further conceptual ideas about price beyond ohlc.

5. A person realises that most indicators are just a waste of time. People use them to make their charts look good & try to convince themselves that the indicator is the holy grail....then at least they have something to blame when it all goes Pete Tong...

yes, people think they are trading on an indicator.
but if there is no guide, what is in place?
that we trade.?
Well, there is a solution to this, there are basic relationships that always come back.

indicators help , if you know how rightly to use them,

too much of indicators lead to confusion....

A question's probative value will be constrained by its inherent limitations. A well constructed sentence will always have a Predicate and a Subject. Placing constraints on a question such as the subject "Profitability," also constrains and limits answers to the question. Being "profitable" can be temporary. Reaching "profitability" can be temporary. Achieving "profitability" can be temporary.

For these (and other) reasons, I always define the subject and the predicate as: "It is necessary to use Technical Trading Tools in order to reach a level of trading that consistently grows capital on a routine basis."

When I'm asked the new Poll question my answer is, no.
When I'm asked the question in this post my answer is, no.

However, when I'm asked a different question: "Does trading with a well designed integrated trading system having a sustained higher degree of MFE to MAE and a progressive revenue model built for growth, deliver a greater probability for reaching a level of trading that consistently grows capital on a routine basis?"

.... my answer is a resounding, YES.

There is no question that a well researched, well designed and integrated trading system whose indicators were designed specifically for a progressive revenue model for growth, produces a greater probability for sustaining capital growth over time. I don't know of many retail FX traders that use revenue models for growing capital. Most retail traders are not that sophisticated because most retail traders (let's admit it) have not reached a level of consistency in their trading that warrants long range future capital growth management tools, such as a Revenue Model.

I posted about my use of Revenue Model Trading a very long time ago on this forum and precious few got the point. However, that's precisely the way it should be, because previous few Retail FX Traders are consistently growing real capital in a real Trading Business using a real Revenue Model for projecting capital growth over time.

Update:

President's day holiday in the US puts the breaks on D1 Magnitude expansion. Nothing surprising there. Current swing trade configuration looks about the same. No surprises over the weekend. Nothing really to add since the last update. Continuing business as usual. System's Long potential still in the early spooling-up phase in the 3rd day of a swing transition:

For some reason I keep forgetting to include this in my update posts:

Draw -38.6. Target 199. RR 5.1. Probability now 80.6%.

Except that when people have not done the research that others have, they can't possibly know what others know and thy have no way of designing bespoke indicators that no one else has. So, they can't see what those who have done the homework can see or make the same decisions that they can make. Just plain common sense.

A bespoke indicator design is not an off the shelf indicator concept. The "Edge" in trading must (by definition) come through that which the masses are not doing. Any Market Sentiment Study in FX will show that the masses get it wrong through a dynamic range of 60 to 90+ percent of the time. That means, the masses are also "liquidity providers" to the rest of the market who sells when they buy and who buy when they sell.

There is no such thing as a defined Trade absent a defined Target. I keep hearing people talk about Trading, yet they don't define the Target of the Trade which (again by definition) forces the trader to rely on discretionary exists - in turn forcing increasing amounts of human error. I also keep seeing people post T&Es. T&E are great when they are not faked, or when they don't demonstrate the absolute value in growth of capital over time. I can have a T&E showing 1 trillion pips gained. However, if I've taken a $50 account up to a whopping $5000, then how much is my real capital growth over time in absolute turns that matter.

I got into trading first, to pay the bills 17 years ago. After blowing several accounts, losing $10s of thousands in the process of developing skill and finally learning how to break-even, I realized I could do much better than pay the bills. So, I began the process of learning how to growing real wealth (as opposed to merely making profits), graduating from retail hell, getting onto a real Institutional Trading Platform and then doing my level best to become the first billionaire in my family. I have not reached that goal yet, but I'm well on my way to achieving it thanks to designing technical tools that came out of researching concepts and ideas that are different than off the shelf concepts.

Filtering noise can be done at least a billion different ways. Merely the act of filtering noise however, does not provide the trader with clear vision to execute a trade that contributes to growing real capital over time. Being "profitable" does not define Real Capital Growth Rates. Anyone understanding how a real Balance Sheet works understands at least this much. One can be "consistently profitable" (a term we hear being used a lot on forums), yet Capital Growth Poor. So, T&Es are great for science fair projects, but having real Capital sitting in multiple real bank accounts are ultimately what matters most.

I've always felt this way - once the Trader reaches a level of success in their trading where they have struggles with figuring out tax jurisdictional problems, whether or not going off-shore is required, the legal and operational distinctions between individual income and business revenues, whether or not they should function as an individual trader or proprietary trading firm and how to select the best agency only FX Intermediary, etc., then that type of Trader has reached a point of sustainable business activity.

It really depends on what the individual is trying to accomplish in trading. Some merely want to pay bills. Nothing wrong with that. Others have different goals in mind and those goals require structuring a business entity around everything they do in trading. Such things involve getting on-board with attorneys, tax professionals, business entity consultants, jurisdictional consultants, real estate agents in diverse places, etc. Again, it depends on what the individual is attempting to accomplish.

Therefore, using bespoke Trading Technology researched and designed to provide an Edge is not only beneficial to some of us, but absolutely necessary in order to more efficiently and more optimally run our trading businesses. Some approach trading as the business that it is, some don't. Some wing it. Some build-out the infrastructure necessary to take their trading to the next level, some don't. Some wing it. It all depends on the individual.

Tech should assist. Tech should not hinder. Not everyone is capable of researching and building such Trading Tech. Merely because one can't, or one chooses not to, has absolutely zero impact on those who can and who obviously do.

Some good points here friend, really long post though, I stopped reading near where you said you were on your way to be a billionaire.

Congratulations, good to see someone doing well

J

Update: See previous post earlier in the thread here ()

That's what the System projected three days ago and that's pretty much the way it worked in EURAUD up through today. Today, the System's Panel looks quite different:



From this point, I'm looking for the H4 GMMA output called Active Dimension (Act Dim) to increase to a value of 2 or greater. All the other GMMA outputs in lower Time Frames (M1-H1) have all shifted "Long" with Active Dimension equal to 1. The H4 GMMA output still shows Short at 1 Active Dimension. This is what Internal System Divergence looks like and this condition is critical to the way I use this configuration of the System. This market condition cannot sustain itself. It means that something is about to blow. M1-H1 cannot remain Long at 1 Active Dimension while H4 remains Short at 1 Active Dimension. So, something must give here.

Lastly, I'm also paying close attention to the GMMA Stack Height relative to all the other outputs in the System outside the GMMA Module. Stack Height values below 10, are indicative of a Compressive Market State. This is the System telling me that the Market is now shifting from Market Phase 5, trough Market Phase 4 & 3, on its way to Market Phase 2 and eventually Market Phase 1.

Market Phase 1: Bullish
Market Phase 2: Bullish/Horizontal Transition
Market Phase 3: Horizontal
Market Phase 4 Bearish/Horizontal Transition
Market Phase 5: Bearish

The reason I kept this trade open and my posts in this thread going, were because EURAUD was a candidate that would show the full spectrum capabilities of the System, in predicting a Full Market Phase Reversal. In this case, from Phase 5 through to Phase 1. Those kinds of full cycle Market Phase transitions often times come with high volatility, as Institutional Traders prepare to spank Retail Traders (once again).

Now, why is this important. If you go back through the thread, you will see at least one Trader here who said that EURAUD was more than likely headed Short and that he thought it was better to be on the side of the market. He also said that, he would not be trading EURAUD because it offered no clear path to a trade.

This is why I use Indicators. This answers the question presented by the thread's title. They give me visibility Beyond The Horizon. I can see things that I would not otherwise be able to see clearly without them as being most probable for future market behavior. This gives me the ability to place my capital in a position where it has a higher degree of probability for not getting ripped off by all the Killer Whales in the Market.

This Swing Trade is just beginning. I'm looking for more compression to take place in the H4 GMMA and when that compression cycle is completed, EURAUD will be free to stretch its legs a bit to the upside. I will adjust the Target, if and when it becomes necessary using several of the Panel's Target outputs and the new Indicator you now see in the chart called iRPD Profile. I might talk a little more about that later (maybe).

In the meantime, just sit back, relax and enjoy the flight of EURAUD. We'll be taxiing to the runway shortly. Please fasten all seat belts and stow all trays to their upright and locked position. You are onboard EURAUD fight number 6364 departing retail hell.

Heck, I would not expect most retail Traders to even read that far, LOL! The difference is in Expectation and the reasons for that expectation. I wrote that for the 1% who are getting closer, but who still have doubts about their own abilities.

Good trading to you!

Update: H4 GMMA Active Dimension Rotates



H4 GMMA Active Dimension now rotates as I was typing my last post. In addition to that, its GMMA Micro TCD-Long is now ranked in 2nd position among the others. So, that now means the last "flashing light" to go will be H4 GMMA Dir. However, heavy turbulence is still in the forecast.

It can be slow process going from Market Phase 5 all the way to Market Phase 1. It does not have to be, but it can be rather slow at times. That's why I use a System. It helps me to see that transition coming before it happens.

You will also note in the pic (forgot to mention it) that the H4 GMMA Module is now reporting that a Backside Breach ("Back") has taken place. This is where some of the real fun begins.

A Backside Breach is different than a Vortex Breach. Two different types of "Breach" events that can take place in the GMMA Module. Don't know if the market will produce a scenario where discussing the relevance of a Vortex Breach in the GMMA Module will emerge or not. If it does, I'll briefly cover it.

Draw -1.7. Target 199. RR 117.9. Probability now 99.14%.