When people first start out trading Foreign currencies it is very easy to be taken by the idea of making trades based on indicators. The fact of the matter is, indicators will never make you a successful trader. I wish someone had told me this when I first started out, it would have saved me a lot of wasted months. Support and resistance lines, trend lines, etc. are the way to go. This is what the major banks use and they most likely know what they’re doing. Just some advice to noobs, forget about indicators.
hey prez welcome to babypips.com you’ll get no arguement from me. I do use moving averages but my main focus is on s/r and price action. the ma’s are simply price levels or floating s/r if you will.
To each there own though some folks around here like indicators.
I think psychology and mm are actually the most important factors coz 2 traders can have the same method or system and one succeed and the other fail. the battle is either won or lost upstairs first. if folks get that squared away then the sky is the limit.
I think the reason Im on this topic is because folks think that indicators are some sort of saving grace or a crutch and they make traiding so complicated when it is really quite simple. If people would realize they don’t need all the indicators and voodoo for that matter they can then focus on taking responsibilty for there own decisions and controlling there emotions.
sorry for the rant 
Very curious where you got the information on what the banks use to trade.
And I don’t agree fully with support and resistance. I will use support and resistance along with indicators in smaller time frames to boost accuracy. When using simply support and resistance my accuracy is over 20% less.
And being a successful trader has alot to do with the person you see when you look in the mirror.
What is it that’s accurate? Is it the number of times you win divided by the number of times you loose? If so, that has little to do with your entry signals.
Everyone has their own ways so I will just explain with a daily chart. Once you have an established uptrend wait until the price gets to or under support. From there I will go to an hourly chart and look for bullish divergence. Once it hits my sweet spot I am in with a specific plan. The only thing is waiting for the set up. For the highest accuracy only take signals going the direction of the trend at or below support on the larger chart.
This same thing applies to smaller charts.
Wins divided by trades taken = accuracy
My point was that you can be as accurate as you want and still loose money. Let’s say you’re “right” 60% if the time (no small feat) and each time you’re “right” or “accurate” you win $2,000, but each time you’re “wrong” you loose $3,000, well I don’t know about you but I’ll take money over accuracy.
I am not so sure that you are correct saying that banks do not use indicators, I would think that some traders use indicators and some traders do not use indicators… depending on the particular trader.
Unless you have been able to actually observe all of the bank traders, I would think your statement is conjecture.
Hmmm… I’m sorry but I just couldn’t let that one pass, given recent events and all… 
I agree about the indicators though.
Banks have something we will never have…Market flow data. They will always have the upper hand. Its safe to say a lot of large banks can help their positions by injecting 100s of millions on one trade! That helps.
I have read that the best technical indicators have a success rate of less than 50%, but yet they can still make money if the profits margin is larger than losses and with strict money management.
Whether an indicator makes money is solely up to the trader and his application…
I find myself agreeing with this. 
Now money management is more than just being “strict”
Money management can itself involve strategies which are very effective in making a losing system (with indicators) into a winning system.
See the following hyperlink as an example of an excellent money strategy…
http://forums.babypips.com/analyst-arena/12562-using-multiple-lot-positions-improve-trading-fx.html
To be honest I actually have no solid evidence that banks use s+r lines to trade. I read it in an article a few years back and it kind of just built up in my head as fact. But, the reason I believe that this is true is because, any long-term traders that have talked to tell me that they eventually switched from using indicators to not using indicators early on in their career. From past experience I have learned that in order to last in this “game”, you must not rely on indicators. Now, you say that your accuracy drops by 20% when using support and resistance. This means one thing, you simply do not know how to locate and/or use support and resistance lines. They key is to be patient and wait for price to hit only very strong, well-established s+r lines. Do not trade just to trade.
And being a successful trader has alot to do with the person you see when you look in the mirror.
Yes, if the person you see in he mirror uses indicators he will not be successful, if he uses s+r line he will be successful.
Seriously though, I’m not trying to be an @sshole. I am open minded and I am interested in reading some success stories of traders who do not use s+r lines.
If some people would chatter less and read more they might learn something…
http://forums.babypips.com/free-forex-trading-systems/6632-alternative-technical-templates-85.html
http://forums.babypips.com/free-forex-trading-systems/19076-technical-templates-2-a-52.html
I’m with you Pres; S/R lines can work quite well for long term traders. The simpler the system the better. Read less books and do your own math.
I have found S/R and fib/even numbers to work. Say for example the EUR/USD is trading at 1.4780s and resistance is 1.4800 and the pair breaks through 1.4800 it is good for about 15-30 pips before moving back. A good entry would be 1.4760s/70s for a move to next resistance.
However, nothing works 100% of the time and I find this strategy to work about 60-70%.
Forgot to say that I use this on the 4hour chart.
Since when look S&R lines different on 1m,5m,15m than on 4h,1d,1w TF’s…once those higher TF S&R lines become visible because PA get’s there…?
Since when work S&R lines better for long term traders when PA rules in regards to S&R lines…?
Read less books and do your own math.
Think first and do your own lines.
Strength and Resistance levels use a look-back period to calculate these levels. Really, they’re just the Highest High and Lowest Low of a particular time period.
As the look-back period shortens, these levels get closer to the price, giving you more signals, enriching your broker.
Price action analysis is in my opinion by far the best way of gauging what the market is doing at any one particular time, having said that i do believe indicators have their uses when used in conjunction with price action analysis.
the diference between the two is the knowledge and level of understanding needed to use them, a majority of new traders think they can be successful by slapping a few indiicators on a chart and taking trades when x crosses or is above/below y, etc. when in reality they have absolutely no clue as to how the indicator REALLY works thus no clue about what its actually telling them about the market, they are just blindly following a signal without doing their own analysis then blame the so called system when they fail…
however with price action analysis it requires you to really think and understand the market and its movements enabling you to make better informed decisions at your own discretion leading to a more successful trading career
lee