Many people come in to the financial markets, whether it is forex, stocks or option trading and look for an automatic solution. A packaged commercial step by step way to make money easily without using your brain at all. In their own time they find out (the hard way) that this type of commercial sell doesn’t deliver the return on their capital that they were led to believe or expected. Then they stop.
They then move on to another automated process and, over time, they find out that this NEW process doesn’t deliver to their expectations as well. So they repeat the whole process over and over again. Typically they will move on to moving from one indicator to another (all telling the same story) and even end up having 5 indicators on the same trading screen.
Don’t get me wrong – there is nothing at all wrong with indicators however they should confirm a move and not dictate it. There is not one single indicator on earth that will make you a millionaire from the forex market. There is also not a single trading bot (robot) that will make CONSISTENT gains in all markets. Indicators confirm not dictate.
In order to be successful in the markets we DO have to have a trading plan with some basic factors built in that do not rely on automation of entries. This includes good money management, looking at the trend in the higher time frame, good entry strategies based around price action and support and resistance levels and good exit strategies based around support and resistance levels and partial profit taking. Market volatility should also be in there as traders can’t make money from an instrument that does not move for days on end. For stock traders the market, sector and sub-group direction are also very important.
These are the main constituent parts that you will find in any successful traders bible and they should be the main parts of your trading template also.
Indicators should be used to confirm a move based around support and resistance levels and they all work to some degree however the bigger picture needs to be seen and the bigger picture is price. It doesn’t matter whether you use a an ADX cross or a hammer or shooting star candlestick pattern they are the tools that confirm the move.
So before you start your trading career don’t be one of those that is looking for the HOLY GRAIL for trading forex because it just does not exist!
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