Podcast:

What Indicators should you use to trade Forex?

In this video:

00:29 – Selecting which indicators to use

01:02 – To the novice trader, the array of indicators is fascinating

01:48 – Leads to complete confusion and analysis paralysis

02:10 – The important thing is the price

02:40 – Don’t clutter your screen

03:05 – 95% of all Forex traders don’t make money

03:55 – Look at the strength or weakness of each currency

04:25 – No one system suits everyone

05:03 – Get out of your trading rut

05:55 – Everyone wants to be consistently profitable

What indicators should you use as a Forex trader? Let's talk about that more right now.

Hi traders, Andrew Mitchem here, the owner of The Forex Trading Coach. Today, It's Friday, the 20th of May.

Selecting which indicators to use

In this video and podcast I want to talk about something that's so, so important and it's all about selecting which indicators you should use as a trader. You see, the problem is as traders we are completely inundated with all number of technical indicators. Just go and have a look at any system out there, any e-book, any robot, any robot back testing software, any trading platform. Anything on the internet to do with a trading system or a Forex platform you will find that there are just so many indicators on there, completely overloaded.

To the novice trader, the array of indicators is fascinating

Now, for the novice trader that actually looks so cool, it's really impressive. I remember about 12, 13 years ago when I started trading. I was going online, I was researching all these different indicators and names, who invented them, why, how they're created, why those levels are used, why the optimization levels are used, what time frames they could be used on. I was getting printout after printout of all this informational indicators and I just was absolutely, just absolutely thought it was just so cool. I added them to my charts and I could see how when this line crossed over that line the price would then go up just as it said.

Then of course you go adding more and more indicators together and you get lines and dots and hash marks and you get all this stuff over your chart.

Leads to complete confusion and analysis paralysis

The problem is that you get complete confusion and now there's this paralysis, think of it like that. You get lines everywhere. The problem is, what you end up doing is you see the price like this, this tiny little area at the top or the bottom of the chart is the actual price. What the indicators do is they take your mind away from what is the important thing.

The important thing is the price

The important thing is the price. Where is the price right now? What is the price of the currency pair? What's the candle pattern looking like? What's the overall strength and weakness of that pair? Where abouts within the chart does this price occur right now? Has it got room to move up even further to your profit target level? If I put my stock down at this level, is that a safe level for a reason. Yes or no?

Don’t clutter your screen

When you just clutter your screen with lines and charts and dots and wiggly lines it just takes your mind away from the real important thing. Just how to think about any different trading platform that you've tried, whether it be MT4, Trade Station, whatever it might be. Those platforms are completely inundated and overloaded with all these flashy looking indicators.

95% of all Forex traders don’t make money

Also think of it this way. Supposedly, the figures that we hear are 95% of all Forex traders lose money or don't make money. Yet I can be fairly sure that probably 95% of all Forex traders out there use far too many indicators so you can see ther...