Why do traders use so many indicators?

Yes, please see the PDF attached.
You can read here that this researcher compared the results of arbitrary levels to levels provided by institutional funds and firms trading in the Forex market. Her findings concluded that the levels provided and used by these firms were in fact more accurate in predicting price direction when compared to random points on the chart. That is just one research report though I am sure there are more you can find doing your own research.


Well, yes but it is only a part of my edge personally. I do not think its worth it to simply only trade based off of these zones even if you may be right slightly more than 50% of the time, that's just not good enough. It is only a part of a good trade and you should have other reasons to enter a trade if you want to increase your chances of profiting from that trade.


Yes, and no. Technically those lines represent the belief of other traders buying and selling at those areas, that's why I can see them. It is however up to me to agree with that area and believe it will work again, but that's why I said used alone they are not going to give you a significant edge.

The Psychology of the Market does not know whether the US will deliver a strategic missile to Iran's doorstep before it happens. Psychology of the Market cannot fathom another 911, or another Paris, France, a major earthquake near a significant financial center, a suicide bomber who finds their way into a major financial hub. Those are true Black Swans. All other forms of Swans are shades of Gray and may be perceived before they happen. That data that comes out of a true Black Swan, cannot register with the psychology of the market until after the event itself. The fundamental chronology of Cause & Effect makes this a reality.

I'm glad you were able to participate in my development project as the MQL expert. I was wondering when you would finally emerge. You've been lurking for a while now. Good luck on growing as a Trader.

Don't let jet trader here you say that...

Who is jet trader and why should I care....

Yes, there are some Experts in this thread. The fact that you struggle with accepting that reality is not there fault.


VIP, hypocrisy may be fashionable in today's confused, unethical and warped societal norms - but it does not flatter, it does not improve your skill as a Trader and it does not erase history. Go read the history of your own posts in this thread. It could easily be argued that your entire OP is a Troll. There are things called Troll'ish People. And, there are things called Troll'ish Threads with Troll'ish OPs. When you plaster a picture in your OP, insinuating that "Indicators" are not necessary, you have just posted a Trolling Thread by any rational definition of the word, Troll.

When the response comes from Traders that know better and who do use "Indicators," you then label them "Experts." Why? Because they dared to prove your insinuation dead wrong. Stop hating "Indicators," those who know how to design and build them and those who know how to effectively use them. That's the broader moral of the story here.

And, that's the point. Anyone with half a brain would already know why asking such a question would be considered nothing more than a Trolling Thread. Anyone with one quarter of a brain would already know that there are Billion Dollar Hedge Funds that run on Algorithms exclusively. Anyone with with 12.5% of a brain would already know that some of the most successful Traders in the world were Quants that developed and used Technical Indicators to become some of the richest people on the face of the planet.

And, anyone with 6.25% of a brain, which is just short of a full frontal lobotomy, would already know that there is ALWAYS more than one way to Skin the proverbial Cat in this business called Trading. And, even a single celled Amoeba, without a functioning brain at all, knows that any flip of the coin will result in a 50/50 chance (not probability - that's a different thing in Mathematics entirely) of getting Direction - while saying absolutely nothing at all about Timing, Magnitude and Probability. Even the Amoeba knows this for a fact. So, why did you struggle with it so much by attempting to couch a sadistic Trolling Thread as some kind of intellectual pro position on Trading absent the Indicator?

You asked for a trade and got exactly what you asked for. Because that did not work out in your favor according to the obvious Troll'like insinuation in the very OP itself, you now see "Experts" as the problem here instead of your Trolling Thread. That's called total Hypocrisy and if I've seen this kind of behavior on Trading Forums once, I have seen it at least a 40 million times in the past over 17 years. It is the PRIMARY reason why I do nothing more than visit trading forms in my spare time every few years or so. It is just not worth the bullshit that people who have absolutely no idea what they are arguing about, for me to spend more quality time in places like that.

I come here for the New Trader who sincere about developing their trading skill, knowledge and their expertise. No doubt, the Naysaying Troll will always be omnipresent in trading "communities" and THAT is a huge problem for any New Trader trying to climb through the muck and grime of the utter bullshit they are inundated with on a routine basis from people who have not one solitary clue about how to Grow Capital as a Trader.

Update:



Yes. There is an Expert in the room here. But, expertise came with a tremendous amount of hard work, commitment and sacrifice. You willing to work that hard? Then you too can become an Expert. And, when you do become that Expert, Trolls will hate you for it because you've accomplished what they could not. Not because they are any less intelligent, but because they were not Committed to the Craft.

Now, get your shit together and stop the blame game. Learn to Master Your Craft. Posting threads like this are an abomination to that Process.

Darn. Forgot again:

Draw 0. Unrealized Net +148.9. Target 199. RR 199. Probability now 99.9%.

The thread I started is a troll thread because I believe indicators are not necessary to achieve profitability? OK.
I struggle with accepting there are experts in this thread? Show me the experts, show me the results. LOL
No one has proved me wrong in this thread including yourself, the only moment I stopped agreeing with you is when YOU started trolling posting blank charts obviously misunderstanding what I meant by naked trading, and twisting the point of this thread to toot your own horn.

Honestly, I'm not going to try and debate you about any of this, you are right, there are many ways to skin a cat and you can trade with indicators if you like, but the fact remains that you still have not proven that they are necessary for trading, and that was the point of this post. You and I both know that I am right.

So from now on, please. Post a trade if you like, and stop acting like your the Albert Einstein of trading and anyone who doesn't use indicators is beneath you. Please, just stop.

I am not even going to point out the fact that you have no proof of any profits, I do not care actually. I am not a hater, but don't try and come at me with your bs because I will just bring you back to the main point which is post a trade using your system and I will find the same trade or explain what I think about it using no indicators.

You like to write long posts and rant on about your system but you've been in the same trade for over a week which I pointed out already. Either post another one that actually proves me wrong, because your EURAUD trade did not. I already made my comments on it and what I thought about it.


This has to be the funniest part of your post. Get my shit together? Learn to master my craft? Is this some attempt to scare me. LOL. If this thread is so beneath you then why are you even here.

You made your point already, your system works for you. Cool, good for you. I wish you the best with your YouTube channel, again I am not a hater, but don't try and act like you are a better trader than me when you don't even have any proof of concept, and don't know how I trade.

This is the problem with trying to have a discussion about anything on this forum. Was my original post meant to poke a bit of fun against indicator based systems, maybe. Was it of bad taste? I don't think so. Did it strike a nerve for some? Clearly lol. If I offended any of you indicator based traders, then I am sorry. Keep doing what you are doing and making your profits as you go, no issues over here.

I never meant for this thread to become a shit show, honestly. I just wanted to prove a point, but it is kind of hard to do that when people do not follow the rules of the thread and deviate from it filling their posts with unnecessary crap.

We can all learn something from each other and honestly I try to keep that state of mind when I am on here, but some people choose to be rude and talk down to others, undermine each other and that doesn't get anyone anywhere. It just makes you feel better about yourself trying to put someone else down on FF.

Either make a point and move on, or do not comment at all. Very simple.

I think, using too many indicators can create a big problem. Sometimes it can cause a big amount of loss.

It is quite clear to me and anyone with knowledge of the subject matter that you don't even know what questions to ask. So, the fact that you got an answer that clearly should resolve the matter for you and you still retort with a response that has no probing value (Whatsoever) is prime evidence that your biggest problem here is that you are struggling with understanding the underling premise.


What you were trying to say (then) and what you are actually saying (now) are two entirely different things. That's the problem. You are not sure what question you should be asking relative to the underlying premise. It is not the fault of someone else when that happens. It is your fault when that happens.


This is a long standing problem that people have a really hard time dealing with. I'm going to try to make this as simple for you to understand as I possibly can.

1) The Market is in fact Random
2) Within the Randomness of the Market there is underlying Structure
3) Within that Underlying Structure the Randomness of the Market Disappears

Now, that is a tough concept for some people to get, primarily because to truly explore it, one needs an understanding of Variable Statistics and they need to understand that differential and distinction between Chance and Probability (two different Creatures - they are not one and the same). I will not open up a Mathematical Treatise on this subject, because the OP will throw a temper tantrum, label me an "Expert" and threaten to not participate in this thread anymore. So, I will simply say that within the Randomness of the Market, you will discover that the Market indeed has Probable Structure. That Structure can be Targeted, by getting yourself and your capital on the side of the market containing the greatest Probability for either:

A) Market Reversal
B) Market Continuation

The key here (as I've said 40 million times before) is understanding Market Structure. Once you develop a good understanding of Market Structure, all (and I mean ALL) of that stuff you talked about as "moving the market" collapses to a point of being literally moot - with the singular exception of the True Black Swan. This True Black Swan is (can be) a wonderfully warm and loving creature if/when you learn how to shift away from Directional Trading and into the world (realm) of SwapCycle Trading (which I've tried to explain - but you just don't wanna listen).



What "VIP said" is a bunch of confuses, neophyte, nonsense. Sorry, but that's just a fact. He does not know what he does not know and he refuses to accept the reality of what he does not know - nor is he willing to try to learn about what he does not know. Look, my dear friend. It is YOUR Capital. You can walk over to the Golden Gate Bridge, open a suitcase and proceed to empty every single dollar you have into the Pacific Ocean, if that is what you decide to do. Nobody (and I mean nobody) has the right to tell you how to throw away your Capital.

Now, regarding VIP's hypocrisy and your vouching for it:

1) This thread is called a Trolling Thread
2) This thread was a total contradiction in and of itself, but the OP has no idea WHY that statement is true
3) This thread assumed a standard and conventional Indicator response and got something wildly different in return
4) When this thread received a bespoke non-standard and unique un-conventional "Indicator" response, the OPs tone and tenor went negative

I started the exact same thread concept. The difference resides in the fact that I did not start that thread with an arrogant assumption that people who use Indicators were idiots. I began the thread with the pure assumption that New Traders could in fact learn how to trade on a "Naked Chart and Without Indicators."

The difference is that in my thread, I plainly showed the New Trader how to accomplish the task of trading without Indicators and I gave explicit instructions for doing so. I then stayed around and performed the task of trading without Indicators, directly in front of those who were paying attention. The difference is that my thread was not Hypocritical. My thread was Educational for the New Trader. Mine was not an attempt to belittle those Traders who use Indicators, or to prove that I could keep up with Technical Traders using a simple "Naked Chart."

So, if you want to get down to who is truly contributing on this forum - then lets get to the truth, instead of the bullshit that's being passed off as truth. Show many ANY New Trader and I can show them how to approach the market and how to become (slowly) profitable in less than 1 day, using a so-called "Naked Chart."

In fact, I clearly pointed out to VIP in this thread that his charts were not truly naked. His charts contained Candlesticks, which are in themselves, Indicators. In my thread, I used a simple Line Chart. No Indicator Candlesticks were on any of my charts (beyond those used to explain concepts). I showed New Traders a way to Pre-Define their Risk before taking the trade using a simple Line Chart. I showed New Traders WHY and HOW the Market naturally arranges itself into a Pre-Defined Region of Risk, the Trader could then use to determine whether or not the trade made sense for them.

VIP, did none of that here. Absolutely, none of that. He proclaimed that he could trade on a "naked" chart (with candlestick indicators) and do it just as successfully as one who uses "Indicators." Yet, he did absolutely zero in showing people HOW he does it. In stark contrast, my thread on trading without Indicators made the process of how to do it a priority. And, in this thread, I went from trading with "Indicators" (a Trading System) to trading with a completely Blank Black Chart, which is still in progress right now as I type.

So, I've covered the Subject Matter of this "alleged" thread full spectrum, never skipped a beat, never waivored and never blamed anyone for moving the goal posts. I simply grabbed a pair per the OP's instructions and presented "a trade" - which is exactly what the OP got, to his chagrin.

Back in the day, that was the "language" they used. They did not have the ability to develop the Tools we (some of us) have access to today. So, "Supply and Demand" became buzzwords that traversed time and remained a part of the Trading Lexicon to this day. There are lots of phrases like this out there. Pivots, for example are another buzz. Channels, remember "Channel Trader." They sold a lot of their product online coming up through the early 90s.

Some Traders evolve over time. Some don't. That's the nature of People.

You shouldn't. You have no reason to, yet.

Hi JetTrader, don't take any notice of the troll's, you obviously have a vast knowledge of the trading world, a damn sight more than i do, and as such i am always an empty cup waiting to be filled when i come across people on here such as yourself. i tend not to surface much on here, preferring to look,listen and learn when i see someone of interest whilst i'm working(trading). Keep up the good work and good luck with your quest, although I've got a suspicion you don't need it! 40 million green pips to you sir!

And JetTrader, here is another view of EURAUD and I put an arrow close to about where you entered. The price moved higher because it was in an area where buyers previously pushed price higher, and your indicator based system managed to be in line with that. Your system is not the reason why price moved, price moved because other investors/traders came in at around the same time you did. Meaning that, yes you were right in your decision to buy here, but your indicator based system was not necessarily needed to enter this trade, and that is my point.

I did not claim to know more than you. Clearly your indicator based system works for you, and that is fine. I have an entire thread about how I trade and some of my methods, but I do not go into extreme detail about it because everyone is different, and will trade differently.

Again, my only point here is that new traders should try and understand what the Forex market really is, how and why it moves, before trying to combine some indicators together and take trades purely based on that.

I was never "throwing a temper tantrum" lol I just stated to post your trade, reasons for why and that I would point out how I see that trade without using indicators aside from candlesticks, market structure and support and resistance since you want to count them as indicators. My philosophy is that less is more when it comes to TA, and that is just my way of doing things.

Also, I never stated in my OP that people who use indicators are idiots, I just stated that they are not necessary to trade profitably, and I also stated that its better to learn the basics before trying to over-complicate your trading.

Just a general question that I would like to throw out there... can someone explain what the significance is of EURUSD’s low of today, and please bare with me, I’m having to squirrel about using an IPad.. charts not the easiest to read on, as I’m on a couple of days break. I would just like to see what the general consensus is....and has anyone been taking longs recently but getting stopped out? Again, just to see what the general mood is. This is a chance to chuck on the indicators and get an opinion out there.

M.

EUR is extremely weak right now in comparison to USD. If you look across all the USD major pairs the same thing is happening, this has to do more with what is going on with the USD rather than what is going on with EUR, however the recent news about Brexit and GBP leaving the European union most likely is the driving factor behind the EUR current weakness. At this point it is not a good idea to look for long opportunities for this pair, and to stay bullish USD until further notice.

It also may be too late to enter short here, for me at least. I try and look to get in these types of moves early and if I miss it I wont enter unless I get a good entry during a pullback that has a high probability of continuing with the main trend.

Hope that helps.

Using RSI (period 20) for USDCAD. Timeframe H6 (possible on MT5 only). At 7 AM (my broker time) check the previous 2 candles [1] and [2] ([0] is the current candle).

BUY SETUP: if RSI[1] value is higher than 64 and RSI[1] is higher than RSI[2] then open BUY with TP 14 and SL 71.

SELL SETUP: if RSI[1] value is lower than 42 and RSI[1] is lower than RSI[2] then open SELL with TP 14 and SL 71.

What we do here - we follow the trend which is detected by using the RSI indicator.

Within 20 years backtest were 873 trades, 87% profitable, with 0.01 lots, drawdown 44 USD, profit 461 USD - see detailed backtest results:



Please explain how you could define entry setup without RSI indicator (you can check from Excel some entries)?

If I am correct this is an EA that you have developed and back-tested. In this case it would not be worth my time to sit through all of these trades and tell you why or why not they worked. I also highly doubt that this EA based on RSI indicator will be profitable long term, regardless of your back tests.

I could be wrong though, as I do not have enough information on your EA or how it works. If this really does work as you say it does, and you are able to achieve 87% profitable trades with 461$ profit, you should be a millionaire in no time. (not sarcasm)

Thanks for the analysis.
Your post 335 explained to Jetdude that his indicators did not give the reason for price being where it was..just coincidence, and I agree with that.
But taking that further, my honest opinion is that strength/weakness is also based on previous data. Means nothing. Supply demand zones, pivots... all an illusion.
Again my chart could well be lacking data due to IPad, but there is one significant reason for price to be where it is or has been today.
George would have seen this a mile off.

M.