As a trader, you may see some analysts use lots of indicators in their trading. Sometimes, it's hard to follow because the charts are unreadable from of all the indicators they put in. In a sense, lots of tools are helpful, but they are not always helpful when they are all clumped on a single chart. In fact, the more indicators traders use when drawing up charts causes confusion and are mostly unsuccessful.
Common Indicators
Some very common tools that traders like to use include moving averages, stochastic oscillators, bollinger bands, relative strength index, or Fibonacci retracements. These are just a few of the most common things we see on charts, but what is the most useful and how many should we use to optimize our win rate as traders?
Before I move on, I would like to say that creating a plan is very important, but the plan doesn't have to be perfect. Not every trading set up will look perfect in real time. Setting a pending order doesn't always get reached, stop losses cut off potential winners, and TPs are often missed. What's important to note is that technicals should be used to help gauge entries. I've been in plenty of trades that put me in drawdown in the beginning and ended up being winners. Instead of being perfect in your entry/strategy, let the trade happen, because the markets aren't perfect. There is no such thing as a 100% win rate as everyone deals with losses. You can always adjust your trades to cushion the drawdown. You can also see some winners really run.
Conclusion
One average, I'd say that traders should use only a few indicators in their trading. Indicators are just tools that highlight specific market behavior and allow you to see what you need to see. It's supposed to point out the obvious, it shouldn't be something you have to dig for. Relative Strength Index shows whether something is overbought or oversold. Moving averages will let you see how far the price is deviating from the mean. These tools are very easy to use and see. If indicators are too difficult to see, then the majority of traders will not see it. If traders don't see an obscure support line that somebody draws on their own chart, the odds of other traders picking up on that are very slim. Instead, look for the obvious, and trade what's clear. I can attest to that you won't be second-guessing every move you make. And you will make trading easier.
Featured Photo: https://www.google.com/url?sa=i&url=https%3A%2F%2Fforexobroker.com%2Fkilid-forex-system%2F&psig=AOvVaw2KdsxTKuIop-foLgt7q_54&ust=1592069796232000&source=images&cd=vfe&ved=0CAIQjRxqFwoTCLjlzKno_OkCFQAAAAAdAAAAABAJ
Thanks for reading! If you are interested in joining our trading community, we have chat rooms, trade alerts from our top traders, and educational content. You can join using the link below, and get a discount on your membership.
Please note that this email is my personal opinion only. I am not a licensed financial advisor, and any information shared or discussed is not to be construed as investment advice. Trading and investing involves a degree of risk, and is not suitable to all investors. Please consult with your financial advisor before making any sort of investment decisions.
Looking for a Broker?
Check out our favorite brokers & reviews! Find brokers available in your country, or our top rated brokers to consider.
Weekly Forex Forecast for GBPUSD, GBPCAD, EURJPY, XAUUSD (22-26 February 2021) Hey everyone! Welcome to this week's forex forecast for the week ending January 29th, 2021. I'm TraderBart with A1 Trading, and this week I'll be looking at GBPUSD, GBPCAD, EURJPY & XAUUSD. Psst! It is my birthday tomorrow on the 22nd, so I have […]
Should You Do The FTMO Challenge? There are many traders out there that believe they have what it takes and the skill to be a successful trader, except for the fact that they do not have enough capital to trade big time. There are companies out there that offer to fund traders and take percentages […]
Weekly Forex Forecast for USDJPY, GBPNZD, EURJPY, XAUUSD (15-19 February 2021) Hey everyone! Welcome to this week's forex forecast for the week ending January 29th, 2021. I'm TraderBart with A1 Trading, and this week I'll be looking at USDJPY, GBPNZD, EURJPY & XAUUSD. USDJPY Price has recently broken out of this long-term descending channel and […]
Politics preventing new financial stimulus The economic recovery in the major global economic powers depends on several important factors. One of the most vital part, the spread of the virus and the government's answers to it. With a decrease in daily cases of COVID-19 to 50,000 in the U.S.A. Yet U.S. A remains the most […]
Our team has unfortunately received many reports of scammers using our content and pretending to be us. While we will continue to report these accounts to the authorities as we receive reports, we may not always catch them in time. Below our a list of things to look out for before making a purchase to any […]
Warren Buffett is one of the most idolised, investors in the world. At the time of writing , his company, Berkshire Hathaway, has a market cap of $495 billion and Buffett himself has a net worth of $79 billion. His approach to value investing, combined with his influence over the companies he invests in , […]