Hi fellow traders I noticed over my time here on babypips that few I would say experienced traders only use price action and chart patterns and don’t really use indicators at all or may use a MACD for entry purposes only. I personally use both but then I would say I’m still in the grey area of being a beginner/ being intermediate, all I need is just experience personally to help me along now.
So I was wondering is there a point where a trader becomes an experienced trader which has seen X amount of set ups and doesn’t need indicators anymore, or may use some indicators. Because from what I have read from some of babypips more experienced traders all most do is look at price action and use chart patterns for when they go to open a trade.
I don’t use off-chart indicators but maybe it could be said that as I take mostly trend-following positions, I wouldn’t get any benefit from them anyway. I do use MA’s to confirm and compare trends.
I have used the traditional indicators previously of course - everyone tries them. But I realised that the trades that made the best profit and that I could add to and that had the best r:r and that I could take profit from but then get back into, were those with the most consistent trends. So I dropped the indicators and just started to look out for the trends.
Yeah I use MA’s to confirm trends too , as I too trade trends only, as I only have time for long term trades. Also @tommor you’re a lot more experienced than I am, what is your, say, checklist for seeking trends? As mine at moment is a combination of using MA’s and chart patterns and Support and resistance lines, and Fibonacci levels. Also good to hear from you!! How’s your trading going in general
Trend-following is a spasmodic style - so often, nearly all stocks or nearly all the major currency pairs are trending up or trending down, or none are trending. So pickings have been lean for me since the last days of January when the US stock market took a new view of risk.
I have 3 mandatory criteria for confirming a trend, plus 7 optionals for gauging their comparative attractiveness.
Uptrend: Mandatory -
20EMA > 50EMA
50EMA sloping upwards
50EMA > 200EMA
Uptrend: Optionals -
% of weekly closes, highs and lows in last 16 weeks above 50EMA
consecutive weekly bars above and not breached by 50EMA
consecutive weekly closes above 50EMA
consecutive weekly bars overlapped by current
I also prefer the majority of other pairs off the same base currency to show the mandatory trend criteria.
I think in the beginning, you need to trade axcording to the analysis based on the indicators. When you will get experience then you can shift your analysis towards the price action. Moreover, you need to know about the candlestick patterns in the beginning as well. Thanks!