All the 'indicators' really necessary?

I have been trading ‘forex’ for about a month now with good returns, something I learned in life is “K.I.S.S” aka KeepItSimpleStupid.

I have been doing a little bit of research & was intrigued by all the available tools out there. But the more I try to learn about all the indicators, tools, etc … the more complicated I feel I make it.

Before I say anything, let me say that If all of these indicators & systems work for you, that is great & I respect that.

But I feel a couple things, first thing is, {not just on these forums, but all around ‘internet’ information} but it seems like there are alot of ‘self-made’ indicators & systems out there and people just try to learn the system & not what drives the system. If that makes any sense.

I just feel that all of these tools are really really unnecessary UNLESS what you do actually requires it, if I had to guess based off of my research, I would say 90% of those using ‘new’ systems {assuming they are not newbies like myself} do it to find the new quick way to make money & nothing strategic goes into it.

I Have also come to recognize that there are a limited number of indicators & such that are ‘industry standard’ indicators, Correct me if you think otherwise, but I think it would be most wise to stick with these ‘industry standards’. I also believe that if the effort that was put into finding new indicators & systems was put towards the technical studies of Forex, those who fail would be a lot more successful.

I guess my point is this, I have been trading and doing pretty successful for a newbie over the past couple weeks & all I have done is this :

  1. Trade opening sessions based of previous days highs/lows & news.
  2. Scalp in 1m/5m charts with ‘Boll’ ‘EMA’ ‘Stoc’, and have been pretty successful.

I guess I am trying to figure out if I want to expand my knowledge of other trading techniques or If I should stick with and grow off of what I am doing now.

A BIG part of this decision is based off the fact that I might want to turn this ‘full time now/part time later’ venture into a ‘full time … period’ venture, meaning, this might be what I choose to do for a living.

So are all of these ‘extras’ & ‘tools’ really necessary for the average trader?

I had the same questions a while back. This thread is a great intro to pattern trading:

Personally, I currently only use patterns and fibs. Indicators are always late to the party. Those few leading indicators out there tend to have high failure rates. Because of the common motivaters in every market: fear & greed, intensive study has identified a great deal of patterns that are common when markets are experiencing a reversal. Makes for a great risk/reward ratio and high success rate when you can spot a reversal coming minutes or hours before hand and call it to the pip. This is not to say indicators never work. My research has shown lower r/r and success rates on every indicator i’ve tried. Check out the forum and read the recommended book if your interested.

I say…

If you have something that works for you, stick with it…

As far as my trading… I don’t use ANY indicators for my trade decisions… I do “kinda” keep an eye on them, but more for my anal eyes than anything else.

TO ME, price action holds the key, and all the lagging indicators do, is lag behind…



Just keep doin what you’re doin if it works. If you’re happy with your results, it doesn’t really get any better than that. Consistency is your goal now. Real money is made by compounding your gains, and that requires a high degree of consistency.

IMO, indicators are not a necessity for successful trading. They do help me often only because I now fully understand the formulas behind them, what they’re computing, and why they matter right now. Of course they’re lagging but their information is very useful if it’s what you’re looking for.

I feel one of the biggest noob mistakes with indicators is default settings. For example; the market cycles change so frequently and we’re looking in different TFs, yet why are we using the default 12/26/9 (or w/e) for MACD? Customization of indicators in various market situations is neccesary to have a better grip on indication. :slight_smile: I dont mean to go and reinvent the wheel but indicators can help improve trading when you need them to tell you what you’re looking for and how far back.

PA reigns though and that ‘30 pips a day’ thread is awesome.

If indi or not depends on your system.

I have two systems right now both profitable so far. One without any indi just pa and time and one with one indi. The one with indi uses also pa. So, pa is king and indi is just to filter out some trades. K.i.s.s., right! I am pretty sure the best system would be one which is just based on one info, maybe time and nothing else. You just have to find it out, lol.

I realized this a while back and since then have been experimenting with different indicators in depth, I write indicators for mt4 that use various different settings on the indicator in question and record their success rate, with some suprising results, even the parabolic SAR which is comonly known as an extremely lagging indicator can trade profitably with the correct, but non standard settings, so well in fact that I have been live auto trading it with an EA for over a week.
Last week it made almost 300 pips profit and today alone it has made over 100.
Right now after 1 week and 11 trades the PSAR with my settings is 410 pips in profit.

Edit: I probably should add to that I am not entirely convinced that setting would always work consistantly in the long term, I believe the next step would be to create an algorithm that uses the amount the market has been ranging to calculate the best settings for the indicator dynamically

Thanks for the confirmation, SDC. I Had a wild meditation spurt the other night with focus on the changing of indicator imputs based on changing market cycles.

I fully agree with your last statement. It’d be nice if your current settings worked in the long term but we both know they probably wont :stuck_out_tongue: An algorithm based on market conditions would be killer.

Dwight: “Michael always says, K-I-S-S. Keep it simple, stupid. Great advice, hurts my feelings every time.”

Trading without indicators can be a good option because it keeps your workspace clear. and allows us to focus on the price.

But without them you can miss something important! Is i right?

Well after answering my own question, what I have come to do is check the indicators only when I am not trading.

I let the indicators be my consultant … if you will.

Yes, of course! It a nice strategy:)