Posts Tagged Under: lagging indicators

Price Action Vs. Trading Indicators – The Old Battle Settled(?)

 

The discussion about price action trading and whether it’s better than indicator trading is as old as trading itself. This article will debunk the five most commonly shared opinions on Price Action Vs. Trading Indicators and give traders a new perspective on the age-old debate.

#1 Price action is better than indicators

Price action traders claim that it is a much better trading method in general. But if you dig a little deeper, price action and indicators are not that different. Candlesticks or bar charts are tools to visualize price information on your charts. Indicators take the same price information and apply a formula to it. Indicators don’t add or take away anything from the price information you see in your candlesticks – they just process the information in a different way. This will become more apparent in the next points.

#2 Indicators are lagging – price action is leading

A trader who claims

Read More


Why You Shouldn’t Drop Technical Analysis Even if You are a Day-Trader

 

The combination of volatile markets in 2008 and the rapid advancement of trading technology opened up new possibilities and an emphasis on the ‘day trader.’ Many amateur traders were drawn in to day trading after hearing unrealistic, although popular, promotional phrases such as ‘daily income’ and ‘don’t wake to disasters.’ However, day trading is not less challenging than the traditional long term strategies, and in fact requires deep analytical skills along with a deep mental focus to translate and filter market noise. Market noise can be thought of as institutional interest that is not related to speculation.

Interestingly enough, the most disturbing trend has been the neglect for traditional technical analysis that has been exercised for over 100 years, and also the general acceptance that traditional technical analysis does not work.

When many make the shift from long term trading to day-trading they often neglect technical analysis. “Isn’t technical analysis for long

Read More