Why Price Action Is So Underused In Trading?
It appears to me that every time a new trader wants to learn about what it takes to trade the forex marker, they will usually spend all their time scouring the internet to and learn about using indicators like stochastics, MACD, moving averages as well as the other common ones.
What eventually happens is that is all you see on their trading charts: indicators. It really never dawns on them that they are not trading correctly. Sadly, trading with price action never comes to their mind. Many traders get scared when they hear the concept, and think only smart people can trade it. They would prefer just using their indicators to tell them which way the market is headed. However, they really dont know which way the market is moving.
What most people dont realize is the fact that when you trade with indicators, you are essentially trading other peoples signals. All you are doing is hoping that they are giving you correct information, because YOU truly dont have any idea of why you are taking a trade. You are essentially going on blind faith.
Thats what is so perfect about price action. Finally you get to eliminate all the needless clutter that is on your charts, and you can finally read and understand the market, the way it was intended: without having to use a single indicator.
Many times when traders use indicators, one of the biggest hiccups for them is when two separate indicators are giving opposing signals. For example, the MACD could be signaling a buy, while the Stochastics are signaling a sell.
Since many traders dont really understand the concept of price action, what happens is that they are left just sitting there waiting for their indicators to line up in the same direction.
Im sure you have an idea of what a tough spot this is for a trader to be in. Think about it. Instead of being proactive in the market, you are left staring at a bunch of random lines hoping that they match in the same direction. The really sad thing is that most traders dont even understand what exactly these lines represent.
What I want you to do is that the next time you start trading with indicators, think about the New York Stock Exchange, and think about the fact that the majority of the traders on the floor dont even use charts, much less use indicators.
