Have you tried a ton of indicators without consistently making profit? If so, find out the mistakes you’re making and how price action can improve your trading:
What’s better? What works? Two methods of trading are compared: indicator-based chart trading versus pure price action.
Price action trading:
- Is free – a trader does not need to extra software. Candles, bars, dots or any other chart price symbol will provide ample information for price action traders.
- Can be used on any market at any time under any circumstances (E-Mini S&P, Forex, stocks, other commodities, futures and currencies).
- Can be used with any trading software (NinjaTrader, TradeStation, MetaStock, etc.).
- Is fast – price lag is irrelevant, old data will not obstruct your trading.
- Is versatile – price action trading methods can be combined for a coherent trading system that is free of conflicting data.
- Must take time to learn, and understand how to trade it. Education is needed to master the methods and practice is key. The Cost is not cheap and is compared to a semester in college.
- Is not free – most indicators are commercial.
- Lags behind price – data based on the past is unlikely to be of assistance in the present and the future in an ever-changing market. Until data can be transferred instantaneously across any distance, this will be a consistent outcome.
- Often produces conflicting signals and hesitation of when and how to perform trades.
- Compatibility is dependent upon the indicator’s programming; only certain markets and / or trading software may be supported.
- Subject to the law of overuse – the more traders that use an indicator, the more a market will adapt “in retaliation” to its overuse, thus rendering it ineffective. Price action is free from such boundaries as it is based on watching the resulting changes in price.
- Easy to use, and follow. A no brainer, nothing to think about and only following the signals is needed.
What type of trader would you like to be? The choice should be obvious – learn how to become a price action trader.