It seems that most forex traders now are looking for the short cut, instead of using the oldest form of technical analysis: trading just using price action. Most traders though don't seem to be interested.
You can tell this is true by looking at any forex forum on the internet. What is it that you normally see on these sites? Usually it's people that are talking about some system that has 40 moving averages or some forex expert advisor that's supposed to be the new holy grail.
What's wrong with this picture?
Off the top of their head they should realize that all these indicators like moving averages or stochastics are always lagging. They are great if you want to know what has already happened, but it provides no ability to forecast future prices.
Traders also need to be able to understand that 9 out of every 10 forex traders are losing money as you read this. If this is the case, why use the same exact tools that all the other struggling traders are using?
You also need to think about the fact that most traders on a forum are usually struggling traders. If they weren't struggling why would they be on a forum to learn about trading. The real successful traders don't really have the time. They are too busy trading the markets.
What's really increased in popularity are the Forex Expert Advisors. For those that don't know, these are basically automated trading machines or robots. Developers program them using lagging indicators so the market trades automatically while you're away.
It's pretty obvious that this would attract almost every new trader. Who could pass up all that free time that an expert advisor gives you. You can be out the whole day and when you come home the trading robot has made you a millionaire, right? Well, you better thing again.
With Forex Expert Advisors, you're asking a computer to do something that 95% of forex traders can't even do. If you know anything about the forex markets, you know that news can really move the markets in a big way. Even more so than any other markets. How is a computer going to account for that.
For those that want to have a deeper understanding of the market then, I recommend you get rid of all your indicators and start trading the markets on a clean chart. Just follow the price action. See if you can start to notice patterns that are always happening. These are the kind of patterns you need to focus on, because this is how you forecast future prices.
About the Author:
Jim Buhs finally just learned successful at trading forex after he learned how to trade price action. If you wan to see what he used to leaen how to trade with no indicators, make sure to check out his blog.
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