Posts Tagged Under: trading 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

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Two Volatility Indicators That You Need to Add to Your Charts

 

When analyzing charts, most traders tend to focus on price action and then apply standard principles of technical analysis to come up with trade ideas and find potential entries. These traders often miss important information because price does not always tell the whole story. By looking at volatility and volume-based indicators, traders can often find out more about the driving force behind such price movements.

In what follows we take a look at two volatility and volume based trading indicators and explore how to use them to analyze price in a potentially more efficient way.

 

Market Facilitation Index (MFI)

The market facilitation index (MFI) is an indicator that analyzes and visualizes momentum and price strength. The MFI is a confirmation indicator that analyzes buying and selling pressure by looking at price movements and whether volume is falling or rising.

Therefore, the MFI is used by trend-following traders who want to know if a trend

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How to Trade With Indicators the Right Way

 

Indicators can be a great addition to your trading methodology. But they can also ruin even the best trading approach if you don’t know how to use and / or combine them with other tools in efficient ways.

In this article, we provide you with a realistic view of trading with indicators, how to choose the right one and which indicator mistakes to avoid.

 

Do you know your edge and trading strategy?

The biggest mistake traders make is that they try to be in the market and find trades all the time. The professionals, on the other hand, know exactly which market circumstances favor their trading approach and then choose their tools accordingly.

If you are a trend-following trader, you should look at momentum indicators and stay away from oscillators. When you are a range trader, on the other hand, momentum indicators won’t improve your trading and you have to pick from oscillators.

Using

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Indicator Trading Vs Price action – Tips to help you make the right decision

 

Indicator Trading Vs Price action

The question regarding whether you should use price action only or rely on indicators when making trading decisions is probably among the most controversially discussed trading topics. At the same time, there are many misconceptions around this topic that keep traders from making the right decisions for their own trading. In this article, we discuss the pros and cons of Indicator Trading vs Price Action trading and we debunk some of the most commonly shared myths.

Are indicators lagging?

The number one argument of price action traders is that indicators are lagging. But why is this not true and what do some traders miss here?

It’s important to understand that indicators and price action is really not different. Indicators take the price action information you see on your charts and then perform calculations based on that information. Thus, the indicator shows you exactly what

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A “better” trading system is not the answer to your problems

 

Let’s assume that you built a discretionary method or even an automated system that has the potential to earn above average returns. How can you make sure that your method is applied in a manner that is robust and can be traded long term?

Developing a robust trading method that potentially has a positive expectancy is a very individual thing and it has a lot to do with the personality, beliefs and the actual application of the trader using the method.  More often than not, the trader overrides the system/method, stops trading it and switches to a “better” method.

Your expectations from the system, the market, and your belief system will all come out in how you apply one method or another.  We can clearly say that those who approach the markers with “it’s too good to be true, but maybe my luck is different” will sooner or later realize that they

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