Do you use similar indicators?

Beginner Questions
1

I have seen so many charts where people add indicators which tell them the exact same thing. I trade essentially naked and focus on price action, but I have been shown so many charts where traders clutter it with indicators and often with a similar indicator which makes no sense to me at all.

Those who use indicators, please take the time to fully understand them before you create a trading strategy which incorporates them. Trading an asset based on an analysis you don’t understand only leads to losses.

2

I’m guilty, or I was. I’ve cut them all away except for standard Stochastic and Ichimoku on a separate chart. I’m starting to see that news and price action/levels are the most important…

3

I wouldn’t say guilty, but I used different indicators that were for the same thing myself and have cut back. For probability the same reason you did; you have enough experience trading so you don’t need so many indicators to help you with your trade decisions.

Rambo35 is also right sometimes people use different indicators that do the same thing, but they use them for different reasons.

  1. as you said because they don’t understand that the ADX and MACD are both trend indicators
  2. Some people know they are using different indicators to tell them same thing, such as momentum indicators like the Stochastic and CCI but they are trying to see which gives a better picture to them
  3. Some people use different indicators that do the same thing , to verify what they are looking at(especially newer traders) ; such as using a SMA to establish a trend and verifying it with MAA(moving average angle which is a custom indicator)
  4. Some people also use the different ones for the same thing because certain parts of the trade such as entry, management and exit one is more important than the other. For example a swing trader is probably not as concerned with an entry as they would be with manage the trade once entered and exiting as say a scalper or scalper/day trader.

I trade sideways, ranging and trending markets, so for me I break the trade into 5 parts. Trend, momentum, cycle, support and resistance. I address each one with indicators that deal with each part, and then verify on different time frames. because depending on how I’m trading a particular currency I may be in and out or holding for the day.

4

Good that you learned from it, most refuse to learn a lesson and keep clogging their charts.