Why This Trader Thinks Indicators are NOT the Solution to Making Money in Forex

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Of course, everyone knows that these types of events occur within the real market, within the world of real currency. That is not the issue here. The issue is your claim that you, with your staring intently at your hourly and 5 min charts can apparently spot these events and benefit from them:

So you apparently could have spotted the LIBOR manipulation in 5 mins or any of these other events that from time to time hit the headlines precisely because they were NOT spotted at the time they began by anyone else with your eye - and not for a long time after they had been occuring.

You have developed your skill for joining the dots and making sensible trading decisions based on probability analysis and sound risk/reward. Well done, that is what is being taught and talked about on this site for years (and with little actual success).

But if, as a result, you think you have invented the Harry Potter magic wand of revealing manipulation and conspiracy in global currency markets on your 5 min charts then you know even less about the differences between the interbank currency market and the broker/retail trader with their typical 10-100 lot equities, than you have already revealed.

Why can’t you Newbies just stick to the facts of what you are trying to learn instead of always elevating yourselves to the heights of financial intellect after a few little successes.

Arrogance and sarcasm are destructive enough in a Newbie, but self-delusion will knock even the most consistent veteran off their perch.

But, like I said, that is enough. You are not going to take off your new set of emperors clothes because of anything I say. And the desperate Newbies that will grasp at any straw offered no matter how transparent in its presentation, will continue to feed your new-found ego. So go for it (and if it fails then with these skills of spotting the manipulators you might also get a very good and well-rewarded career as a central bank advisor or in the major regulatory bodies).

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Interesting thread @QuadPip :sunglasses: and not a little controversial ! Something in there to “upset everyone” in a way. :rofl:

I read the summary and a few of the comments around the book “Jekyll Island” and whilst some of it is in line with the book I frequently recommend

There are differences, particularly in the “Conspiracy” elements it would seem, though whether that is important or not from our points of view as observers, I don’t know.

One of the reviewers refers to “Fractional Reserves” which I understood to have been abolished long - since. Can you tell us whether “Fractional Reserves” are discussed as current within the book please - as the current discussions around “Money” relate to “Modern Monetary Theory”, which could not work in such a system - I don’t think and you might want to take a look at MMT if the book stops there.

I also disagree that inflation is some sort of “devil” provided it is kept to modest levels, since without inflation, the effects of “Interest” charges will eventually kill all trade transations, which after all is the whole POINT of “money” - and there would be no point whatever in buying your own home for example, since it’s resale value would never increase. Thus the operation of Inflation, over time reduces the monthly mortgage payments making home ownership a worthwhile exercise rather than an exercise in stupidity.

Then if nobody wanted to buy houses, what would be the point in building them ? Why have “Bricklayers”, Plumbers, conveyancers, Estate Agents ?

I suppose that then brings us to the “Moneyless Global Society” mentioned in the “Venus Project”. I have not watched (as yet) the whole vid but have stepped through it and don’t see what replacement for money is proposed. One has to think the emphasis on “Computers” implies a liesurely existance with “machines” doing all the work and ruled over by some benevolent “Team of experts” - a sort of “Updated Marxism” ?

“Postmodernism” taken to it’s (very over-optimistic in my opinion) conclusion perhaps ?

Personally, the very concept of a “cashless society” - frightens the hell out of me in so many ways ! :worried: [edit - a “Moneyless” one - seems to me to reduce us to the status of a society without any point - like the Eloi in HG Wels “Time machine” simply breeding and waiting for death - when the Morlocks come out of the ground and take them away to be eaten ! - Jeez - No Thanks ! ]

[edit 2 - That then brings us to an important - nay VITAL question - since this “Global Society” advocated is exactly that (Global) - what is to become of those of us who simply don’t want to participate in this Utopia ? - Those of us who WANT a more traditional lifestyle - Are we to be FORCED to comply ? under what penalty ?]

I have to say I quite like the PA / SR approach to charts, although with the application of Volume and perhaps a Moving average and a Bollinger Band as assistance with the timings and psychology of the market ? However I have often thought that a young “Gamer” may be far more able to attune themselves to short term trading rather better perhaps than us “Oldies” - I’d certainly be interested to see “research” on such a trial !

Anyway as I said - Interesting thread - thought provoking - thanks for that :sunglasses:

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@anon46773462 Wow! Such vitriol! So much anger!

I have no grand illusions about my capabilities as a trader. I have always stated that I am a developing trader. Having learned price action basics from other people I have studied it and I am developing it independently since I do not have a mentor to reach out to. I have no arrogance or delusions about what I can or cannot do. In fact I’m a strong believer in shedding arrogance in favor of opening up one’s mind to new thoughts and learnings. The moment one thinks he knows it all that is the moment that he stops learning.

Manxx I never said I could spot LIBOR manipulation on the charts. You are distorting everything I say. Since you are incapable of having a civil and reasonable discussion and, for some unknown reason, you’re intent on disparaging me, I shall refrain from responding to you any further. Just because there are things beyond your comprehension, it does not mean that those things are impossible. If I had mentioned the quantum physics concept of non-locality, before you had heard or read about it, would you have believed me? Ponder that for a moment. What I’m telling you about my PA capabilities is not unusual. Many others can do it and do it much better than I can.

Believe what you will and be happy (no sarcasm intended). I wish you well.

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Hi @Falstaff. I’m glad you liked the thread, although I now wish I had declined to be featured. :smile:

Fractional reserves is very much alive and kicking. It is the basis on which banks “create” money to loan out to you when you purchase a mortgage or an auto loan, etc.

Regarding inflation, you are likely conflating inflation with appreciation. Inflation refers to the devaluation of a currency and not the appreciation of an asset. Whether or not real estate appreciates you will pay more for it as the currency devalues further. This is an ongoing phenomena caused by the increased money supply in the system which occurs due to the fractional banking system. There are some very nice explanations of money and the fractional banking system on YouTube if you’re interested in learning more about the subject.

The Venus Project has many videos and can even be found on Netflix. I shall let you explore that in depth if you choose to do so. The reason that this concept scares you is because you (and all of us) don’t know anything else but existing in a monetary based economy. But, let me ask you this: Were we given a choice to participate in it or not? And to top it off, we get taxed and we toil for less and less money as the currency devalues continuously. How many people love their jobs? Why are people clamoring to forums like BP and others to learn how trade so that they can exit the rat race? The Venus Project provides a solution.

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I do have some qualifications in economics and certainly knew about fractional reserve ratios - the reciprocal of which is what we used to call the “Multiplier” which determined how much a bank could lend. Perhaps there are still countries which operate that system.

As to the difference between asset appreciation and inflation and their relationship to each other, I think you may find it rather closer than you appreciate.

However I’ll not press either of those points unless you want to.

As to my choice not to participate in the “Utopia” of the vision of Venus your post refers to.

NO Thanks ! I’m not joining in !

Those of us who don’t WANT To - will just “Do our own thing” - unless your “Happiness Police” slap us all in chains and physically force us to participate in this life of idleness and luxury !

If they choose to do that - I think you may find rather more persistent “resistance” than you expect !

(A bit like “Brexit” - in a way - as I see it ! )

Sorry mate - the old style Marxism was responsible for hundreds of millions of deaths in the 20th Century. I see no reason why a new version should have any different results.

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Whoa! Easy cowboy! I’m getting a little tired of being berated for no reason. I wonder if tonight will be a full moon night. Geez!

There is no happiness police. No one is forcing you to do anything. And to equate the Venus Project with Marxism without knowing enough about the Venus Project is just plain ignorance.

As far as the rest of the topics in discussion, you claim superior knowledge so I won’t waste your time with my ramblings.

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Thank you for your input, fantastic read, from Newbie!

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Interesting read. Thanks for sharing, QuadPip!

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I enjoyed your post, so much so that I will be exploring price action a lot further than I have in the past.
I think that the concept of price action you mentioned is more than likely the missing link in my poor effort in trading, continual losses, indicators and a lot of not so deep understanding that I am lacking.
Any help pointing me in the direction of meaningful price action information or help will be greatly appreciated. I have looked at various sites on the web, but have yet to find something of value.
Thanks again, great article.

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Hi, some of what you say i agree with, however supply and demand does not move the Forex market. The big banks move the market and decided were price will go. Commodities are moved by supply and demand.

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QuadPip thank you ever so much for your very interesting post that confirms what, in just 5 months of trading, I was independently beginning to suspect. Something very fishy in price action indeed. My journal is replete with the single observation that my technical analysis for trade setups was correct only to be confounded by a price action reversal that stops me out before resuming movement to predicted targets which I usually set based on prior price action. Your post has convinced me to learn more about price action if only to broaden my perspective of the markets. Do you have any advice on reference material to learn more about PA?

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Price action isn’t for everyone despite it being a great skill.
Finding something that works for you is key. I use 4 indicators that work well together and give consistently good returns. It is possible to get into a trend early and ride it with the right indicators. You just have to do what suits your preferences for learning and risk management.

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@QuadPip What a great thread!
I think we can learn from arguments too! It is confronting points of view how people can broaden theirs, even when it might not be entirely pleasant :wink:
I know about Venus project since more than 5 years, and I think their thoughts are too advanced for most humans, unfortunately. Funny thing how even smart people resist to live in more freedom of action. The ¨good¨ thing, for most who don´t want it, is they´ll be probably gone when it happens, if it does. (still too much development to achieve before we can All just be doing what want)
I would like to ask the same question other person had, about what sources would you recommend to specifically develop PA skills. I don´t think many people can just sit in front of charts and start understanding PA without a little more guidance.
Thanks, and hope you can share.

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So is QuadPip going to leave us hanging or is he sleeping on the other side of the globe. You are right, we could carry on staring at the charts but it would be better getting pointers or perspective from those who have further down that road.

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Would love to defend indicators but interesting insights nonetheless :slight_smile: A little disagreement never hurt anyone.

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@QuadPip thanks for your insights. Also, thanks for agreeing to be featured. If you have something worthwhile to say, there would always be objections to your points. Disagreements can be good too as it helps us newbies to see both sides of an argument that could be individually right for the people espousing them. Also, as traders, we should be working (or talking) with as little ego interference meaning you aren’t so attached to being right. I believe that would help have more meaningful conversations even with people with opposing views while also spotting good exit points (pun intended) for such conversations. That being said, what I took out of this is not to work at learning PA but to begin to discover what works for me.

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@QuadPip Great to hear your trading journey! I’ve been swaying between pricing action and indicators for some time and always believed that there was a simple way to trade. I’m very new to trading and would like to know more about the price action you describe. Beyond studying the charts are there any other resources you would recommend regarding mastering price action? I’m a little worried I’m unable to spot the patterns after spending time analysing the charts. What time-frame would you recommend I start with? Thanks

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First, thank you all for your posts.

I’m helping with a move this weekend so I have not been able to spend too much time at BP to respond to all the wonderful posts in this thread.

Take a look at Chris Lori’s videos on YouTube as well as Sam Siden’s (hope I spelled that correctly). Sam teaches supply/demand, which is closely related to price action.

If, while exploring beyond that, you find videos with diagonal trend lines or candlestick patterns, you want to skip those videos if you desire to concentrate your learning on price action. They take you on a different path (not necessarily wrong) that does not correspond to pure price action.

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Thank you!

Yes, I swayed between pure price action and using indicators too. That is natural as you transition to pure price action and as you get better at reading a naked chart. You’re on the right track as long as you recognize this. In time you will view even an MA as interfering with your analysis. :smile:

See the resources in my previous post in this thread, It does take considerable time to spot the patterns and markers. I’m going to be unoriginal and say “be persistent and don’t lose hope”. One day you will open a chart and suddenly things will become much more clear.

An important observation I’ve made (discovered many times by accident) is that if you hit a wall and you are not progressing as you had hoped, take a week off. Don’t think about trading and don’t go near a chart for that week. Come back to it after the week is up and you will be surprised at the newfound clarity that you get.

There is a well known ad agency in San Francisco that sits on every new client intake for a week after their initial analysis. They claim that it takes a week for the neurons to fire and make connections that enable them to arrive at the award winning campaigns that they create. Given my similar experiences, I believe that there is some truth to that.

I was planning on creating a thread to walk people, who are interested in price action, through some important basic concepts that would accelerate their development considerably. Subsequently, I was hoping that, as a community, we could develop our understanding of price action together. Many heads are sometimes better than one.

However, two things prevent me from embarking on that journey. Firstly, I just don’t have the time to markup the charts and to write up dumps of my knowledge (admittedly very little) to bootstrap that effort. And secondly, I fear that, were I to find and put in that time, our efforts would be thwarted by trolls, naysayers and the disrespectful behavior that I observe on some threads in BP. It is time consuming and entirely unproductive keeping them at bay and responding to their self-aggrandizing posts.

If enough people express an interest in receiving such a knowledge dump I might consider an hour long video/screen sharing conference to get you guys/gals rolling. So, reach out to me on this thread, or via PM, if you are interested.

The particular time frame does not matter. You may choose to use any time frame or chart granularity. I primarily use range charts since it helps to eliminate long wicks and the temporal aspect. I also use time based charts and tick charts occasionally.

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Thank you once more. I appreciate your time and effort to share your knowledge and help those of us who ask. much respect

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