Hello Traders,
I have been trading on demo trading since last year. But till now I don’t understand what I am doing and I can’t understand these instruments like MACD, RSI, BOLLINGER BANDS etc,. are showing some false information. How can I over come this confusion.
With charts, go back to basics. Set it up with daily candlesticks, and mark the middle sections of the uptrends and downtrends. Add a 20-day moving average if it makes these easier to see. Trends are the simplest and most reliable patterns.
Get a simple trend-following strategy from this site or the internet or a book. Demo trades based on trend-following, not trend reversals. Use a strategy that involves at the most 1 off-chart indicator like RSI or MACD, not two or more.
Learn about stop-losses and risk management. Log what your trades were (and the trades you decided not to take), until you’re consistently profitable through your plan, not through good luck.
Then start trading with money, but tiny amounts at first. Come back here for feedback as you make progress.
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the bollinger bands are actually really useful, and provide great indications. If you just put these indicators on your chart, and just look at it and study the movements, then eventually you’ll see what works for you and what doesn’t
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Mate, trading is not all about the indicator based strategy! You should focus on Market chart as well as fundamental analysis.
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How to study the movement of these charts ?
start watch some trading videos on YouTube and carefully listen to what they say while they’re explaining their trades. I feel as though you’re a visual learner, and trading is all visual. You said you’ve been trading since last year, but still don’t have an idea what’s going on within the charts. Have you watched any trading videos at all? Honestly, the more you learn and practice trading, the more things become clear. A bunch of light bulbs go off for me all the time. And of course, like what @LauChoKun said, the fundamentals are important as well, but you have to be skilled in price action and technical analysis if you want to be one of the best
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I’d recommend you get comfortable staring at a plain chart in the first instance, and try to see how different moves play out at different times of day. I do use a couple of indicators on my charts, but only as secondary, backup evidence for a setup I have first seen on a naked chart. And then once you’re ready to add indicators, personally I’d advocate only having one or possibly two on the chart at a time (personally I only pop one at a time on, look at it then take it off again). If you get indicator overload, in my view you can obscure the underlying Price Action and lose track of why you are considering a trade in the first place.
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Keep it simple. You don’t need to use every single thing.
Price action is what matter most imho.
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It’s called Price Action trading strategy; I see S.Templar always described it.