When starting out indicators are a big part of most peoples trading journey and its certainly not surprising. Most content online teaching trading techniques revolve around indicators. There are exceptions to this reality as some teach the importance of risk management to make things work whilst others suggest special numbers within these indicators that work like a magical formula ensuring successful trades and investments.
Unfortunately, reality begs to defer.The world of stocks and Crypto is a real world.Billions of dollars ; our whole economy, our whole world run through these markets.To simply think that an indicator is capable of telling us the direction a real world market will move is nothing more than fallacy and wishful thinking.
Now the reason you will find indicators being taught all over the internet as the formula guiding you towards financial freedom is only because it’s the easiest option for most guru’s.Trading isnt impossible but its really hard. The truth is that most people no matter how much they say they want something don’t want it bad enough to go through with all the hard work required.
The bottom line is that indicators are easier to explain and easier to sell.
It makes so called guru’s more money and attracts a huger following.
In this article we are now going to cover perhaps the most important lesson you can learn and save you a lot of potentially wasted time.So pay attention.
When doing something an intelligent human should always look into what that is in its essence.If I were to become an engineer I could memorize a pattern such as:
if this happens this should be done.
Or I could understand the system and produce solutions based on informed decisions.
There is a huge difference between the two.
The question we should immediately ask ourselves is what are indicators?
And the simple answer is that they are visuals created by historical data of the market and that is all.
Does it have any use, well of course.
However you must understand that the market is a free entity. It does not move because of the indicator.
I will repeat this again in bold because this is something you need to understand
The market does not move because of an indicator
The indicator cannot accurately predict the direction of the market
Indicators in essence are just historical data.However its one dimensional.
You see the market is effected and moved by many factors (we will cover these in future articles)
When the indicator is correct there are many factors that aren’t accounted for.This is why indicators may look good when watching a video but as soon as you try you it yourself you will probably lose.
For example. If you started to trade during the bull run you would have a high success rate.Whatever indicator you use would seem like a winner to you.However the truth is if you flipped a coin and decided weather you would enter a trade or not based of heads and tails you would still be profitable.
Because the factor influencing the success is not the indicator itself but rather other factors.
If you study the essence of indicators you will certainly be able to make use of them if that is what you wish for.However any other way of trading is the same as flipping a coin every single time you feel like entering a trade and hoping for a positive outcome.
The market is influenced by many things things such as liquidity, news and much more.They are a few of the things that cause the market to move.
This is a topic of its own that requires its own detailed analysis. A specific article will be made in detail explaining how the market moves and why the price moves.
In a logical moment of contemplation, consider the world around us. We live in an era driven by automation and artificial intelligence. If a formula or set of indicators genuinely guaranteed profits, wouldn’t it render the market obsolete? Would such a strategy not be readily available? Even someone with basic coding knowledge could create a bot to execute these trades, but the reality is that it doesn’t work. Developing a profitable trading bot is likely more challenging than mastering trading itself.
Trading requires the human mind, it requires knowledge.Its probably one of the few jobs that can never be done by anything other than a human.
People who successful trade and tell you its because of this indicator or this pattern are lying.
That’s the honest truth.
They either have a formula or a set of rules that they follow (these rules don’t revolve around indicators but rather market conditions, news and other analysis’s that affirm a bias)
Or they trade of their feelings and experience.
Our aim is not to leave you hopeless. although indicators might seem like a good option its in all honesty a waste of your time.
You must remove the psychology of relying on patterns and focus on understanding what things are in their essence.That’s the only way trading will work.
We hope We’ve added value to you and I sincerely advise you to follow for more content like this
By reading this article, you have already taken a step to sharpen your edge and gain an advantage over others who are unaware. Certain things can be directly taught and absorbed through knowledge acquisition, further honing your edge and creating opportunities for yourself.
However, it’s important to acknowledge that there are aspects that can only be learned through personal experience. We can guide you and demonstrate the path and the methods, but ultimately, only you can take action.
Our aim is to provide you with valuable insights and help you navigate the trading landscape. We genuinely hope that we have added value to your understanding. We strongly encourage you to follow us for more content like this, accelerating your path to success.
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