Hi guys, im noob and im still learning in pip school, i wanted to ask you 1 thing. If all there is indicators were made up just for 1 thing, to help us trade, why traders dont use all of them at same time, maby not all but lets say 10 of them, if lets say 8 of them showing that u can jump and start to trade and 2 not, so basicaly probability would be 80% that ur trade will be succesfull. In theaory that it how it will be, but tell me how it is in reality?
That is a massive miss understanding of what indicators are and how they work. I get the feeling that most newbies (even myself at one point) think that because it’s called an indicator it will indicate when to buy or when to sell. THIS IS NOT THE CASE!
Indicators are mathematical forumlas used to display “hidden” infomation contain within the recent price action. For example the RSI compares the “average gain” against the “average loss” over the past X many periods. So as the price moves strongly in one direction or the other the indicator increases or decreases in value. It does not tell you when the price is about to turn around or when a trend is likley to continue, what is shows you is simply what is calculated.
Now you might infer from the RSI that as the price has moved very quickly in one direction that we are more likey to encounter some buyers/sellers who have been waiting for a better price. That is logical but again the indicator tells you nothing other than a numerical value about the previous X candles/minutes, not a probability or likley win percentage if you make a trade.
Back to your origional question, why don’t people shove 10 indicators on the chart? Because you don’t need to for a start, and secondly because an infomation overload causes trading paralysis. Keeping it simple and clear is the only way you can make a quick decision and maximise your profits, pondering for hours which indicator should I trust now will cause you to wait and simply make errors.
Indicators are used (by good traders) to pull addition infomation from the charts which they don’t want to take the time to collect themselves. Don’t rely on them to make the decisions for you!
All indicators at once…that’s not a good idea, apart from the info overload and the sheer confusion [if you’re not aware of how the indicator works or what to make of the data], you’re going to get stuck, heading nowhere…
The fewer indicators the better. Otherwise they just end up contradicting each other. The best thing you can do is start with learning price action, then add one or two indicators to see if they work for you. Remember to backtest your strategies manually to see if the system has a chance of making money.
In reality, the less you use the better, especially if you are a noob.
Indicators dont show where price is going to go. The Candlestick charts do.
Thank you guys for ur answers, nikitafx i wanted to ask you is info about candlesticks on babypips school is enough or should i buy a book or read more info about it, and what indicators should i start with? i like support resistance + trends and channels
I only use the very basic candle patterns. They work well most of the time. The most important is pullbacks / morning stars / hammer / fakey. ( they have numerous names ). The candle stick lessons on Babypips is a good beginning. Though I must add that knowing the candles and calling a trade entry as it forms on the charts are two different things.
You must be comfortable at watching price waves, HH, LL, HL, LH.
I couple them with S&R on D, H4 TF and I use H1 for my entries.
I rarely use trendlines but they are worth keeping an eye on.
I use to trade channels when I first started FX, but I have abandoned them since.
The best advice I can give a noob is not to complicate things.
A fancier chart with all the add ons, bells and whistles dont bring home the pips.