I’ve seen many people show there strats. And I see often that only the MA’s and MACD is used. When they explain the method, what to look out for and how to use these analysis tools… it really comes across as simple.
Sure I understand the tools help alot but are not 100% everytime, but “in general” how can you lose money? Is it purely money management and lifestyle which make people fail or are they really judging these tools incorrectly too often?
Please remember I am basing this all on technical analysis ( I would also attribute the media events into my trades but yet to learn how on earth to do this ). I have only been reading and watching lessons so havn’t been in the driving seat.
Please tell me what i’m missing here and what I should expect to catch me out if using these seemingly very reliable tools.
Trading is not just about reading indicators, if it were that simple we would all be millionaires. You have to understand a bit about the markets too and if you are using indicators YOU are the one who has interpret what they are telling you about the current market conditions before you make a decision about your trade. There are no strict buy or sell signals related to any standard indicators such as a MACD (which I wouldn’t bother with if I were you), it’s all about pulling out additional infomation and using it to make a decision.
People who use indicator based systems can make it look easy for one of two reasons; they are either faking it (you’d be supprised how many “traders” show up showing epics wins using captain hindsight indicators or even photoshopping the chart) or they understand exactly how (and most importantly why) the system works and can appear to almost pluck trades out of the air when the indicators show up the right signals.
If you want the gritty truth about indicator based trading it requires just as much effort as S/R, harmonic trading or supply & demand trading styles, if not more effort as you must resist the tempation to act just because an indicator “says so” :p. You can’t just pop an indicator up on the chart and expect it to tell you what to do.
Context & interpretation is everything with indicators, you have to do the hard work.
). I have only been reading and watching lessons so havn’t been in the driving seat.