What is the most reliable forex indicator?
Having begun forex trading and been enthusiastic about the amount of money you would make, all that remains is for you to get involved in and start making money. But when is it OK to trade? Which door should you use to enter? What currency pairs should you be paying attention to?
Take for example, the possibility of having a solution that advised you just when to enter a trade!
Mr Indicator, please introduce yourself to the newbie trader. Forget about those obnoxious heikin ashi candles; that thing is simply too complicated.
What exactly is a bullish engulfing candle pattern, and how does it work? In my ignorance, I don’t understand or care; I simply want to make money, no matter what it takes! Show me the quickest and most efficient way to make money right now!
Does this sound familiar?
These mystical clues will guide you through the process. It’s similar to a Magic 8-ball. If you follow them, they’ll lead you to the holy land of forex glory, where the streets are carpeted with green pips and everyone you meet hands you a bar of gold just because it’s in your best interest.
When I hear this, it reminds me of the song “Take me down to the paradise city” by Guns n Roses, which goes something like this: “Take me down to the paradise city, where the pips are green and the charts are gorgeous, oh won’t you please take me home, whaow ouw.”
In other words, what is a MACD, CCI, ATR, RSI, or even a bloody Stochastic?
You’d think they’d be good because they all sound so scientific.
Sorry to bust your bubble, but I’m afraid I have to… However, this is simply another method of interpreting price changes in the market (some traders like to call this price action). When it comes to indicators, salt and pepper are a lot more common than Colonel Sanders’ 12 unique herbs and spices.
As traders, we have access to just a very limited quantity of information. If there is one thing you should take away from today, make it this:
The only things we can be certain about are the following:
What is the current market price?
What was the price 1 minute, 5 minutes, 15 minutes, 1 hour (you get the picture) ago?
That’s all there is to it.
Nothing more than presenting you with the same information in a different format is accomplished by indicators.
Fortunately, for those of you indicator enthusiasts out there, you’ll be relieved to know that it isn’t all hogwash. When used correctly, indicators can be used to indicate past patterns in the market that may not have been visible to the human eye. And according to the notion, if you can recognize a pattern in the past, you would be able to anticipate the future. That, however, is a topic for another day.
Forex traders have the ability to foretell the future. That would be an excellent topic for my next blog entry… Wait a minute, let me jot that down…
Okay, I’m back in action. Now, on to the subject at hand: which indicator should you employ?
You can choose whatever one you wish.
That was probably a tad underwhelming, and I apologise for that…
Simply put, all it is doing is displaying information you already know (current and historical market prices) in a different visual style. To summarise, select an indicator that you understand and stay with it.
My only piece of advice is to avoid running many indicators at the same time because you will most likely end up confused as a result.
It appears to be the right time to buy, sell, hold, and spin.
Personally, I prefer to deal while completely undressed. Yes, starkers, that’s correct.
Eventually, if you pay attention to the charts for an extended period of time, you will no longer require the mythical Ichimoku Cloud to present you with a weather forecast. With the ability to gaze up at the sky and determine whether or not you will require an umbrella for the session ahead, you will be prepared.
Please let me know your thoughts on this. Am I going insane? Do you employ one or more indicators, and do they prove to be beneficial in your trading?
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