Why I Ditched Technical Indicators (And Why You Should Too)

by Justin Bennett  · 

December 1, 2022

by Justin Bennett  · 

December 1, 2022

by Justin Bennett  · 

December 1, 2022


Technical indicators are no doubt a favorite topic in the financial markets. They can range from a simple moving average to a complex array of algorithms.

It doesn’t matter whether you’re trading stocks, commodities, futures or any other market; technical indicators are a common theme.

Useful? Well, that’s another matter entirely.

But of all the financial markets, Forex is arguably the worst offender of overutilizing indicators. Proprietary languages like MetaTrader’s MQL have made it relatively easy for newcomers to design anything imaginable.

Other trading platforms offer similar languages. There are even businesses that do nothing but custom code indicators for clients.

And if you ask me, it’s closer to being part of the problem than the solution.

With an infinite number of indicator combinations, how on earth are you supposed to find something that works?

Well, if your journey turns out to be anything like mine, you will dismiss the idea of using indicators as buy and sell signals. You may keep one or two as I did, but for the most part, they’re an unnecessary burden.

Everything you need to trade successfully is already on the chart; it has been the whole time.

In this post, we’re going to take a detailed look at why I decided to scrap technical indicators. I’ll also share what I use in their place.

As always, be sure to leave any questions or comments at the bottom of this post.

Let’s begin.

Technical Indicators Distract From What's Important

distracted trading

As a currency trader, what do you buy and sell?

Currencies, of course! That may seem like a silly question to ask a group of Forex traders.

But here’s the thing…

I wasn’t really buying and selling currencies when I was using indicators many years ago. I mean sure, I was technically buying one currency and selling the other.

But every decision I made was based on a signal from a group of indicators.

The chart underneath it all was inconsequential to me. It could have been the EURUSD, GBPUSD, AUDUSD or any other currency pair.

That doesn’t sound like a trader to me, at least not one who’s going to make money in the long run.

Of course, the underlying chart didn’t matter to me at the time because I was relying on a random set of lagging indicators to make decisions for me.

I thought I was being a trader.

The truth is I was being lazy. I was also following the herd blindly, hoping that I’d stumble across some magical combination of indicators that would make me wealthy.

But I can’t be too critical about the path I chose. After all, I didn’t know what I didn’t know.

Also, that path led me to something much better. More on this shortly.

Because of the indicators I was using back then, I wasn’t getting to know the charts or how price ebbs and flows around key levels. I was just clicking buttons because a few squiggly lines said it was time to buy or sell.

That’s a problem, isn’t it?

It was for me, and my deteriorating account balance was proof.

When I think back on the experience today, it amazes me that I didn’t blow more trading accounts. And believe me, I went through a few between 2007 and 2010 to get where I am today.

Don’t get me wrong. I’m not saying all indicators are bad or that those who use them are wrong to do so. Even I use two moving averages which we’ll get to later in the lesson.

But to rely solely on them without first learning how to read price action is a mistake.

That’s just my opinion but having been involved with trading since 2002, I can tell you that there’s no better indicator than raw price action.

It has the most direct relationship with market participants and is the least lagging of the bunch.

2. Indicators Are Condition-Dependent

You’ve no doubt come across one of the sales pages for a Forex trading robot, or Expert Advisor (EA) as it’s called in MetaTrader.

In fact, if you’ve been in the business for a while chances are you’ve seen quite a few of these offers.

What’s curious is that they all seem to be promoting the same thing – a high win rate.

I always find that odd considering a high win rate is entirely unnecessary. Sure, it makes you feel good to win, but a ratio of wins to losses is 100% inconsequential on its own.

As George Soros famously said…

It’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong.

But that’s a topic for another time. For now, I want to focus on the sales pages for those trading robots I mentioned.

How in the heck do they achieve those win rates? After all, most of them are backed up by something like Myfxbook.

Well, I’ll tell you how they do it…

The developer designs the EA to function in a particular market condition. Yep, they rig it, so the performance stats look great, but the robot is entirely dependent on specific conditions.

That’s why most of them only work on certain currency pairs – because the developer designed it to look good on only those pairs.

Perhaps it’s been tailored to range bound price action or only works in a trending market.

But what happens when those conditions change?

You guessed it. The EA stops performing. That $500 piece of software is now obsolete, and you’re left searching for a new trading strategy a bit poorer than you were before.

Oh, and if you’re wondering what the other half of those developers do to get a high win rate, the answer is they cheat.

Yep, the performance is pure fabrication. There may be a few that are legitimate and can work with a few modifications, but the vast majority fail over an extended period.

How do I know this?

Having been a trader since 2002 and solely involved in currencies since 2007, I’ve done my share of research. I’ve also had the opportunity to connect with traders whose experience far exceeds that of my own.

I may get some hate mail for what I just said, but that’s okay. Those who have been around the block know that what I say is true.

The key takeaway here is that indicator-based strategies will always be condition dependent. If it’s designed to work in a trending market, it will likely blow your account when that market begins to consolidate.

Even the large hedge funds aren’t immune to this. It’s why some go out of business after years of turning a profit. And those who make it pay millions of dollars to have their algorithms fine-tuned so that they don’t go bust.

But do you know what isn’t dependent on market conditions?

Price action!

Simple yet effective strategies like the pin bar, inside bar and engulfing patterns have worked for decades and will continue to be effective for years to come.

And if you construct a sound strategy for managing risk, they can serve you very well over the course of your lifetime.

Sure, you may have to stay on the sideline occasionally. But once you know what to look for, these price action strategies work regardless of whether markets are range bound or trending.

Even chart patterns like ascending and descending channels, wedges and the head and shoulders have been around for ages.

Why is that? Why do indicator-based strategies have a limited shelf life while price action lives on?

Let’s find out!

3. Psychology Is King


Psychology drives markets. Gather millions of people from around the world, give them access to a computer and ask whether they think a currency is too high or too low.

That’s the Forex market in a nutshell.

Of course, we all know that profiting from it is another matter entirely. But deciding whether we think a pair is likely to move higher or lower is all we’re doing. That’s what each of us is doing when we buy or sell a currency pair.

And in a collective sense, what market participants do is illustrated via the price action on your charts.

Now, what happens when the EURUSD approaches a level that has acted as resistance for the past six months?

If it’s an obvious level, chances are it will attract sellers.

Everyone can see that same resistance level. You may not have it marked on your chart or see it in time to take advantage of it, but it’s there.

It doesn’t matter whether you’re using a MACD, RSI, Stochastics, moving averages or some fancy combination of proprietary indicators.

The key support and resistance levels are there for everyone to see and use.

But while the price action is the same for everyone, the indicator combinations are far from it.

Let me ask you something…

How many indicators are there?

500? 1,000? Maybe 5,000?

There is no number. It’s infinite considering you can code to your heart’s desire using something like MetaTrader’s MQL.

That’s an issue, right?

Your indicators are telling you one thing while the next trader sees something completely different.

For the price action trader, that resistance level on the EURUSD is universal. There are no variables like indicators to get in the way.

And as I mentioned above, things can get dicey when the market decides to stop trending. Because if you designed your indicator-based strategy to work in a trending market, it’s going to fail when markets begin to consolidate.

But once again, the price action trader isn’t phased. It doesn’t matter if the market is trending or range bound, the psychological support and resistance levels will always tell the real story.

At the end of the day, that’s all you need to become profitable.

4. Indicators Overcomplicate a Simple Process

Trading the Forex market for consistent profits is not complicated, or at least it doesn’t have to be. Those who have taken my course and are part of the Daily Price Action community know this.

But that doesn’t stop most traders from overcomplicating things.

Just look at how MetaTrader – arguably the most popular Forex trading platform – starts traders on their journey.


The chart above was taken directly from a new MetaTrader demo account. Not all platforms start out this way but the vast majority default to some combination of indicators.

You know what’s ironic? The name of the template above is “popular.”

If that is indeed a popular template, it’s no wonder most Forex traders struggle, especially in the first year.

Now, don’t get me wrong. All technical indicators are not necessarily bad. I don’t want to give them a universal label like that.

The issue is that many traders abuse them. They add four or five indicators to their chart, watch for crossovers or oversold and overbought conditions and then pull the trigger.

The thing is, they don’t even know what they’re buying or selling.

Those same traders tend to get frustrated when they don’t see some form of consistent profits after a month or two.

So what do they do?

They begin looking for a new indicator or perhaps an entirely new trading strategy. And given the infinite number of indicator combinations out there, it’s no wonder so many never find what they’re looking for.

It’s a vicious cycle.

But I’m not judging. This is not a me versus you post because I’ve been where you are now.

What’s the real issue?

Any new endeavor has a learning curve. Some might be a few weeks while others can take a few years. For most, trading falls into the latter half of that range.

One of the issues with using a trading system built around indicators is that trying to pinpoint the problem is an uphill battle.

Let’s assume Frank has been using a trading system that utilizes the MACD, RSI and four moving averages. He’s been trading for a few months but has only losses to show for his efforts.

But Frank is determined to make it work, so he decides to deconstruct the strategy to try to isolate the problem. His goal is to figure out if it’s the MACD, RSI or any one of the moving averages that’s causing the issues. Perhaps it’s even a combination of these indicators.

Talk about problems…

I don’t envy Frank one bit in this situation. There are hundreds if not thousands of technical indicators available for the MetaTrader platform.

So he’s now supposed to go out and sift through thousands of options to find the one that works? Who knows if the strategy he’s employing will work regardless of the indicators he uses.

What’s worse is that it will take him at least a month or two to figure out if the new addition is useful.

I speak from experience here. My first three years in the Forex market (2007 to 2010) were spent testing various indicator-based strategies.

It was a painful grind. The only reason I made it through is that I was obsessively passionate about trading and stubborn enough to see it through.

A simple solution

The way to untangle the mess of indicators on your chart is quite simple yet highly contested by most traders, particularly those just starting out in the business.

The solution is to remove every indicator from your chart.

Yes, all of them! Even the coveted MACD or RSI has to go.

You can add one or two indicators later, but not until you fully understand what’s happening with the price action on your chart. Otherwise, you won’t know if they’re actually adding value or if you just like them because they look cool.

Let’s face it; most new traders choose indicators based on how they look, not their function or added value. That’s what I used to do.

Take it from me. Until you can read the raw price action on your chart, you have no business adding indicators.

Some will argue this point, and that’s okay. Everyone is entitled to an opinion.

But after more than 15 years of trading financial markets and teaching thousands of traders, I can tell you that adding indicators before understanding price action is a mistake.

The Two Technical Indicators I Use

Yes, even I use technical indicators. But before you start thinking I’ve been hypocritical up to this point, let me explain what I use and why.

As you may well know, I favor the 10 and 20 exponential moving averages (EMAs). Those are the only two indicators I use. You will never see any MACDs or RSIs on any of my charts.

Why the 10 and 20 EMAs, you ask?

I primarily use these moving averages as a way to identify the mean. So let’s run through that for a moment to clear up any confusion.

In math, the mean is the average of a set of numbers. It’s the “central” value of any set of numbers.

So if we had the set of numbers 1, 2, 3, and 4, the mean would be 2.5.

We get that by adding the four numbers together and dividing by four. It would look like this (1+2+3+4) / 4 = 2.5.

What does this have to do with the markets?

Everything! Financial markets are just the visual representation of what happens when math and psychology collide.

Every market regardless of whether it’s stocks, currencies, commodities or something else has a mean. Moreover, every market always returns to the mean.

That isn’t a possibility or even a probability; it’s a mathematical certainty.

With this in mind, I use the area between the 10 and 20 EMAs as the mean during a trend. This keeps me from buying too high or selling too low.

Here’s an example from the AUDUSD daily chart.

mean reversion and overextensions

For teaching purposes, I’ve exaggerated the area between the 10 and 20 EMAs you see in the chart above. But notice how price returns to the mean before making the next move higher or lower.

The concept of mean reversion is one of my broad-based rules for entering a trade. If a pair is too far from its central point, I will stay on the sideline regardless of how appealing the rest of the setup may be.

The Ironic Evolution of a Price Action Trader

There is a universal satire about the evolution of humans. The image usually depicts a baby turning into a grown man and later becoming elderly.

The irony is that in many ways, we end life how we started it.

In a similar but not so serious vein, price action traders are the same. We start out not knowing anything about indicators, so we set off on a mission to learn everything there is to know about them.

But somewhere along the way, we get frustrated enough to purge our charts of the clutter.

After all the struggle, we end up right where we started.

The only difference is we go from not knowing anything about indicators to not caring much about them. They become a distraction and a nuisance rather than an advantage or a benefit.

You know why?

It’s because everything you need to know is right in front of you. It has been the whole time.

I can’t see your charts, but I know it’s there. All you have to do is pull back the proverbial curtain, and you’ll see it too.

Final Words

If you want to become a great price action trader, a clean chart is a must. Otherwise, you’ll end up spending your time sifting through useless technical indicators rather than learning to read the activity on your chart.

Attempting to troubleshoot complex indicator-based strategies is a nightmare. By using simple price action strategies, you’ll reduce the learning curve by half if not more.

If you feel deep down inside that indicators are the way to go, that’s okay. Just be sure to spend some time learning how to read price action. It’ll undoubtedly help you in the long run even if you decide to use an indicator-based strategy.

Whatever you do, keep it simple. Learning how to trade Forex doesn’t need to be a complicated process. In fact, it should be just the opposite.

Master one or two price action strategies at a time. Incorporate indicators if you’d like, but remember that price action is all you need to become consistently profitable.

All you need is one pattern to make a living.

Linda Raschke

Your Turn

Are you still struggling to make technical indicators work for you? Did this lesson help?

Share your opinion or ask a question below and I’ll get back to you shortly.

Continue Learning


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  1. Thank you Justin,
    I have been using the 8 and 21 EMA trend lines to identify entries but really appreciate the great insights, which you have shared. I trade a small account so can you tell me if I can apply the same principle of market mean to a lower time frame eg. hourly or four hour?

    1. You’re welcome, Earlyn. The concept of mean reversion works in any market and on any time frame. However, you’re going to experience a greater number of deviations on an hourly chart than you will from something like the daily time frame. Those deviations can make trading more difficult, which is why I prefer the higher time frames.

  2. Hi Justin,

    I experienced the very same journey you outlined — researching and trying almost every indicator — only to come full circle and end up back at price action, trendlines and s/r levels.

    Thanks for sharing and new traders would be wise to take your advice.

  3. Hi , Dear Justin, pretty and detailed explaination as always about indicators effects. You are absolutely right, raw price action is a basic foundation. indicator can cheat but price action does not cheat and consistently remain with us in all weathers. Thanks

  4. Good day
    All said on the blog cuts numbers of years struggling and blowing accounts.
    Big up to your trading experience

  5. Justin thanks mate you have just opened my wife’s and my eyes… Its always what we have suspected but your lesson has put it all in focus. Too much clutter is not a good thing in fact its more confusing than not. We have been trading for almost 2 years and have ‘charted’ ourselves into a stupor and all you really need in front of you is price action not a ‘Christmas Tree’. Thank you for your invaluable guidance.

    1. You’re welcome, Costa. Your experience is similar to what most traders go through. The source of just about every indicator out there is price action.

      So why use a tool based on something else? Just use the source. Cheers.

  6. Thank you for a very insightful and detailed explanation, Justin.
    I’m using a combination of 20/50 EMA and full stochastic (14,1,3) for entry and Fibo extension and/or sup/res levels for exit. I found the basic combination on the web, added (and adding) some of my own ideas, and I’m constantly profitable for 2 years now.
    So I would recommend a simple combination of technical/naked trading as a way to a trading success.

  7. I completely agree with you. I was seduced by the automatic programming for a long time. I agree that a fundamental part of trading is psychology. Also it must have a well-sized account. I still have no clear ideas about stoploss. Is useful? if so it is useful for me or for the broker? Having a large account, maybe you can even survive without.
    Anyway, thank you for sharing your experience. Whoever leaves lose. Who is tenacious in finding a solution won.

  8. Hi Justin
    yes I agree . I previously spent a lot of time trying to master various indicators and could not make my mind up which ones to use, but now just use a couple.

  9. Thanks Justin for such info, may God richly bless you, i have just one question, what your take on Currency Strength Meter?

  10. Thanks Justin for another light. I have been using mostly Moving Averages mainly the 200 and 34 but I am still struggling to keep a consistent gains. As per your explanation in regarding the mean if I understood right the mean in your chart should be an EMA(15)? And as a normal approach those 2 EMAs you use works better in trend markets right?
    Your posts and comments are helping me to tune up my trades so tahnks a lot for the time you put on this.

  11. Hi Justin, just a question on your MA’s please. Is the market bullish when the 10ema is above the 20ema and visa versa?

  12. Thanks Justin for confirming what I recently come to realize… I just use horizontal levels and use trend lines and dynamic levels to get bias and confluence.I recently noted a market which was
    overbought with MACD above 80 and most traders trigger sales order at 70 but market proceeded to go up with another nearly 200 pips.Honestly if indicators work everyone would be rich since they are in those meta4 platform for free.Thanks.

  13. Hey Justin
    I just read your comment here about price action.Al I see on your charts is what is happend not one in the future.If you see now a bearish pin bar on euro dollar at 1.10,h can you know that you go short for 200 PiP move you the downside,it still van shoot up to 1.12.

    1. Davy, sorry, but I’m not sure what you mean by “in the future.” Are you suggesting that I show a pin bar that hasn’t yet materialized? That would be difficult, to say the least.

  14. Hi Justin,

    Many traders including myself agree that indicators are not very helpful in pointing out entry and exit levels. Hence, many have recommended to incorporate order flow trading in their trading to strategies to increase the chances of success.

    Can you share your opinion on order flow trading and how it might be helpful?

    Thanks & regards,

  15. Well i appreciate your lesson and advice. But in nutshell, i had like to comment that their are many ways to skin the rabbit.
    i never traded anything like price action but i will devote time to learn about it. i love knowledge.
    But the flying devaluation comment by many traders that indicator are this or that is what i have not come to its realization.
    i personally use multiplicity of time frame and conglomerate of indicator for my analysis and frankly speaking, it works well for me.
    i spot top and bottom of market the same time price action traders claim they do using solely technical indicator.
    Though it could be that it is not the way i understand indicator signal that most people do.
    for moving average for instance, what i use is the curve of one moving average versus another in relation to price location to 400 DSMA for example.
    though complex, but my only but 7years in financial market has made me to understand the chemistry of market movement such that when price is above 200 SMA on 1 minutes chart, but bellow 30 SMA on 5 minutes chart, i can tell where it is in relation to 50 SMA on daily chart.
    so, everything depends on your studies.
    The major problem traders have is to spot what works well for them.
    And the long and short of my comment is that it is not the technical indicators that are wrong but we the traders.
    “teach a horse the right way to fly, and you will be the first inventor of a flying horse”

    (lets abuse the god of success and test its anger on us)

    1. I don’t believe I said that no indicators are the only way. In fact, I even stated, “If you feel deep down inside that indicators are the way to go, that’s okay.”

      This post is only a reflection of my opinion on the matter. As I’ve said countless times on this site, it all comes down to what works best for you.

  16. Hi Justin,
    I very much appreciate what you posted. It is spot on for most newbies. Perhaps it’s the glitter of indicators that attracts. Not all that glitters is gold!

  17. Hi Justine,
    Thanks for the eye opener. Since i found your blog, my trading experience has been transformed. I cant thank you enough

  18. Yeah Justin that’s really true what you have just share with us, you may look at the chart it tells you something but when you look at the indicators tells you opposite of what the chart tells you and you end up making a wrong decision, so from today i will really remove everything and work with the chart only.Thanks a million for what you shared with us.Thats true when they say you learn from the best people.

  19. Hie Justin. I have been using technical indicators and truly it has been confusing me. I believe price action will give me the results I need

  20. Thanks for the articles Sir. I did not know to use the MA correctly until I read your article on them. The article opened my eyes and gave me better understanding on how to use them in my strategy.

  21. It’s a shame brokers and these people are trying to get new traders to use indicators. It’s as if they want to get as much money as possible from traders.

  22. Hello Justin
    Could you share the EMA Cloud indication you use on your platform, please? Cloud looks more pleasure than just 2 lines 🙂

  23. learned a billion dollar worth of knowledge today….was rily stressed abt dis indicators..now im trading profitably well.Thanks Justin

  24. Please I have been loosing my investment since I join a forex market, I am a student, and I use to sponsor myself,,, but you people a making money without helping me,,,, plz I need any one of you with the good heart who can help me…. with a starting investment, ,, and a to be a successful trader plz and plz,,, here is my phone number or whats app +2347063694038 please help me and save my life.

    1. No one can here can give you money to trade. You just have to work and get some little money you know you can afford to loose and nothing bad will happen to you.

      Your best bet is to follow Justin and take his courses online.

  25. Thanks Justin – very well explained. I also use Moving averages but was using too many along with MACD & RSI. Can you clarify 2 things for me please:

    1. Will the Mean Reversion strategy work for Stocks as well .. ??

    2. You said, “If a pair is too far from its central point, I will stay on the sideline regardless of how appealing the rest of the setup may be.” I am a little confused by this statement – shouldn’t you be taking positions in ‘over-extension’ areas in anticipation that the price will move back to the mean. So, if the price is over-extended way below the mean than we go “long” and vice-versa .. ??? Am I correct or am I getting something wrong .. ??

    1. I too have the same question (#2). Thank you for asking. Hopefully Justin will respond. I have no idea when this was posted!

    2. Of course you are correct. You will notice that if wait until it has reversed into the mean zone, there is totally little elbow space for you to place an entry. Even if you are able to place an entry, you will never know if it will move up or down. Using the EMAs to determine when you should enter is only if it is within the area between the two EMAs is just not it. Sorry for being blunt.

  26. Will it work if i only use 50/200 on D1 and entry with 50/200 on the H1, your lession is exactly what i went through, test lots of indies and now after 2 year just taken everything off, thank you

  27. Thank you Justine

    I started trading last year in August, went through the same process of trying out every indicstor out there and kept on losing money and movey from one indictor.

    I decided to give it break and learn price Action for six months.
    Your article has greatly helped me in my journey to continue in the my search for knowledge on price Action and mastering the trading psychology which I have discoveredto be key in profitable trading
    So Thank you for your educative article are learning alot from you


  28. God bless you Sir, i’m overwhelmed with your message,my only question is how do I become a price action trader??


  30. It is a wonderful read an eyes opener, had I come across you early of my forex journey it should have been an easy ride than the torture I went through wasting time,lost money and the emotionally depression that come from unfulfilled dream.

  31. Me and justin one side …… Have the same story i started with 10 indicator from strategy to strategy to strategy 1,2,3 yrs and finally my chart had 2 moving average 50 and 200 wondering what next. But all along i know PA is the king. Now i am in …..

  32. I agree with you up to a certain point…..But in wave harmonics specific indicators may help you map a certain harmonic pattern. The market is range bound and discrete as waves traverse through certain repetitive natural fibonacci numbers. The design of certain patterns may help you so to project the direction (bullish/ bearishness) of the market as it trends

  33. thank you I look forward to getting more involved,been a member for some time but mostly on the sidelines,shut down a old account and planning to open a new account with the broker you use.TJG

  34. Hi I’ve learned something, indicators are confusing,I’m in binary lot of indicators I’m confused not knowing when to buy or sell.

  35. It is my belief that out of the 2000+ indicators out there only about 50 have a modicum of merit. And only a handful that are of any use in trading. I believe it is very tough to find the handful that can be of help, as it requires a lot of trial using a demo account. And it is none of the most popular ones. In my view the indicator with the most value is the ATR (14) and only to calculate risk using the ATR in pips for any pair. I ignore the graph. Other than this the one or two indicators that can predict trend the majority of time is all one needs in my opinion. Sadly it is the Big Banks who control most of the price movement and it is best to stay under the radar in order not to be faked out no matter what trading method one uses, including price action.

  36. Hi, I’m from South Africa I heard about your work and reading this article validated what you have been doing in South African traders

  37. I liked what you say about only price action charts. I have been trading in FX for only six months now. Well, a newie. 🙂 When I first started to learn I enjoyed a lot studying indicators, how to use them. Fibonacchi was my favorite. RSI, MACD, Bollinger… I was still following the price action tough, candles were the first thing I learned. But after two months all those indicators started to seem to much. I got rid of them one by one. It was almost an instict. I started to see better what’s going on by only watching the price action. Since then I don’t use them. Now and then I use Bollinger for the mean, like you use MA. That works for me.

    Very good contents in your articles. Thanks for sharing. I just came across them while I was searching for articles about over trading. Yeah that’s my problem 🙂


  38. Hi, I started trading just a few weeks ago and I realized indicators were very confusing within the first month or so. I got rid of all of them from my charts and at times I feel guilty for not using any of them. Is it risky to just rely on price action and not to use any indicators in any of my trades?

  39. Thank u Justin, indicators have greatly failed me so bad. I blew my account because I trusted them. I researched each one of them , I even downloaded free videos on YouTube about them but still failed. I will no longer use them. I’m learning price action from u. Thank u for the education

  40. I totally agree with you.
    I started learning to trade 20 months ago, and recently came to a conclusion similar to your reason for settling down to the 10 & 20 EMAs.
    I now use 5 EMA, Bollinger (5,2,2,close, Middle line), and Tenkan-Sen line of Ichimoku kinko hyo indicators.
    I use them to confirm entries and exits.
    Thanks for this great piece of lesson.

  41. Not to add more to what that had been said above mentioned. I realize recently that, Keeping things simple goes a long way to long term success regarding to trading.
    Thanks very much for this lighting post. It really helps.

  42. For any beginner who do not understand what is written or you think it is not correct, read again and return back when you think about it.

    This post is well written and correct in any way.

    If you are beginner or experienced and you do not understand or disagree with this content, remember that when you find good trading strategy some or all written here will be in that strategy.

  43. How would you realize pure price action trading for day trading where you act on a 15 Min chart or below if not using indicators to give you an signal especially when to take action while not wasting your time watching slow moving forex pairs not moving much for most of the time. You are only trading daily charts right? Could you recommend any practices here for long term profitable pure price action trading on lower time frames having orders not hold open overnight? I always ask my self how people effectively do this while staying long term profitable without ending up in over trading while still making enough money (even if this shouldn’t be the goal). Trading the higher time frame also requires much larger stop loss. That’s fine if you come to a 500k in your account at one day so a 2-5% realistic monthly return is maybe a nice thing but what if there is only a 5k in your account, so growing your account to such number with just following your few trades per month will be take you 100 years or so while keeping the risk low per trade. So what would you recommend here?

  44. Nice post, but I have to say I disagree at some extent.
    I’ve been using EMAs and momentum indicators that have made me make money. I’ve tried to trade patterns and price action, but it never worked for me. Also, a great trader like Elder and some others that he interviewed were using MACD as the main indicator and they have earned tons of money. That said, I think each trader performs well using the strategy that works for him. There is not only a strategy, and maybe the one that doesn’t work for you works for me because we think different. It’s like music. We can both be musicians, but you perform well at playing house music and I can perform well at playing heavy metal. However, you don’t have any idea of playing heavy metal and I don’t have any idea of playing house music.
    I hope you get my idea. English is not my first language and it’s a bit harder to explain.
    Have a good day! 🙂

    1. You and I are saying the same thing. Here’s an excerpt from my post…

      “Now, don’t get me wrong. All technical indicators are not necessarily bad. I don’t want to give them a universal label like that.

      The issue is that many traders abuse them. They add four or five indicators to their chart, watch for crossovers or oversold and overbought conditions and then pull the trigger.

      The thing is, they don’t even know what they’re buying or selling.”

      So what I’m saying is to understand price action before adding indicators; not that all indicators are bad. I agree that every trader needs to find what works for him/her.

  45. Thanks for your insight,
    Been using indicators since i started six months ago- more loss than profit. Will ditch them and report the result in a month.

  46. Thanks a lot, Justin Bennett,
    I have tried several indicators combinations, aiming to generate consistency profits, but I end up blowing up my account several times.
    I should’ve QUIT Forxe, but the thing is that; I really LOVE Forex, so please help me out.

    I’ve been following you for a while now, I love to trade price action as you do… but the problem I have is that; I trade a very small account. please tell me what to do, and any help you can do to help me also, to become a successful trader.

  47. Hey Justin, Just wanted to say this is an awesome post. I recently ditched all of my indicators except for one and it makes reading the chart so much easier.. I just did a search and stumbled across this article as I wanted to make sure it was the right move and it appears it was.

    Thanks for clearing it up!

    (btw this is not a fake comment)

  48. I started off by using indicators. Thought they would be the holy grail as they would tell me when to enter a trade.
    I started off with a few and made a few dollars. This gave me confidence and I traded some more.
    Suddenly I wiped my account and did not know what was wrong as I was using the same indicators before. I ended up adding a few more indicators to confirm my trade. My chart ended up lokking like a spider’s web. It would take time to analyse the chart in order to make a trade. I ended up missing on many profitable trades. Where I would manage to make a trade, i would make the wrong choice. Everything was just going backwards.
    Then I decided to go back to basics. I stripped my chart of all indicators except 3 (EMA, BB and CCI). Even these I may remove with time.
    I have been learning how to trade with price action. A dirrent pattern at a time. And I can tell you that the results have been amazing.
    Although I am not yet at the winning ration that I want to be, I am slowy getting there.

  49. I agree. In my experience , I have seen technical indicators like MACD, RSI, EMA change as per the buying and selling pressure on the chart.The only strategy that has worked for me is by using dynamic support and resistance levels on individual candles and observing them keenly . Also, observing the candle itself , its wick size, etc. Secondly, controlling ones emotions matter a lot and it just works fine

  50. As a lifelong believer in a less is more approach to life – the 100 MA is gone. I don’t even have a grid anymore! Now instead of waiting for the right market conditions, I’m in the green right now within literally 5 minutes I caught a bullish move on the USDCHF based on price action and candlestick pattern. Thank you Justin for simplifying my life even more! If you have found your way to this article – zip it, sit down, and learn.

  51. 95% of traders use price action/trendlines/supply & demand/ etc. 95% of traders lose money. After 8 years of losing while using this rubbish, I found the right set of indicators and now trade full time. So basically this article is utter shite

  52. Such a refreshing article. I been thinking this for years as my trading account has dwindled and dwindled…. I love trading but can’t afford the flash and jazz of indicators any longer.

    Thank you.

    Why not dump the moving averages too? What time frame are you using most? How long is your average trade?

    Awesome article.

  53. If most people are using the most common indicators surely it’s best to use the most common indicators as the market is going to follow what people are doing so everyone doing the same thing benefits everyone??

  54. Great article! Honestly, I found it because I don’t like using indicators (or the ones I have been using) and needed confirmation that I wasn’t the only one. I noticed that it was only telling me what I already knew and was taking up space on my computer. It did look cool though, almost like the stuff in the movies. After learning how to read the charts alone, I started to question if I should use indicators and I thought something was wrong with me because so many traders swear by certain indicators, which coincidentally ended up being their own. Again thank you for the insight!

  55. Technical analysis may require the assistance of charts, indicators and other technological brilliance. It is useful in identifying trading opportunities by getting hold of trends in the market.

  56. you are right , after trying to use and modify indicators to trade profitably was a hard and painful experience for more than 10 years now for me and it’s time i did it the right way , in other words , your way . i’ll be using only 3 ema for direction only and buy /sell using price action .

  57. So what you are basically saying is that price action is the best for the fact that its popular and every one sees the next move, well thats what makes people lose their money, popular things like price action that doesn’t work cant be compared to a sets of indicators that works together secretly.
    Every strategy loses even price action, its a 50:50 game but indicators are by far better than price action in the sense that it gives a concrete signal unlike price action thats full of guess work and uncertainties.
    You money management is what make the money for you not your strategy, strategies only give you courage and discipline by providing direction to follow.

  58. Indicators are tools that are used in technical analysis to foretell future price movements. A technical indicator works on the basis of a rigorous mathematical formula created on the idea of historical prices, volume and shows the shape of optical representation, whether mislaid on top of the prices or the underside of your panel.

  59. Forex Trading Indicators to understand the forex market traders should use. The indicators can assist you in earning higher profits. It is recommended for traders to use these trading indicators to understand upcoming market moves. But the use of indicators depends on the trading styles of traders.

  60. In response to Alexander’s comments, for the most part of my trading even though a few years, Ive tried it all I come to a conclusion that if you must and have to trade with indicator signals, then you “must” scalp the markets with less than 20 pips per trade as they are lagging the actual/real price action. On the other hand trading with price action has made me to become more patient and confident and i tend to hold onto trades longer than i never would have imagined to earn as much as 40pips -100pips on a trade! So i chose price action over indicators!

  61. This piece is priceless and I hope (and wish) every new trader gets access to it because for the most part, your struggling beginning tells the stories of most (if not all!) new traders to the financial markets!

    My beginning isn’t any different, if not much worse (even though it has been for a considerably shorter time frame – but not the least tormenting)! But luckily, I discovered two months into trading that price action is key and I delved into its study with my heart, body and soul!

    Three months into it’s study now and it’s already exhilarating how when I open a chart (just about any chart!) and right in front of me lies the story of the market (past, present and future prospects!)!!!

    Before setting out on the study of pure price action, I ditched everything about indicators! And now, I have been exploring several options on indicators to see which I will apply as a complement to price action… great thanks for the headstart on the 10 and 20 EMAs and pointing me towards that direction.. they sound like they will make great compliments already!

    Thanks for this article, its priceless!

  62. The statement that every market returns to the mean is completely wrong. And it is not difficult to find stocks, indexes and so on which don’t.

  63. Don’t just condemn indicators, there’s a lot of studies that comes to trying indicators like time of the market, Volatility of the market and also the understanding of the chart, people only think theres only japanese candlestick, no that’s wrong, theres point n figure, renko bars, mean median turbo renko bars, line chart, just because your indicators didn’t work in renko doesn’t mean it won’t work with line chart

  64. Been struggling with indicators for 7 years backtesting endlessly. 10s of thousands of hours. Nothing ever works. Everything I think I’ve finally gotten the holy grail things start to devolve in a sideways market. I tweak the system and end up with nothing.

  65. What source are you using in your EMA? Open, high, low, close, hl2, hlc3, ohlc4, hlcc4, EMA or smoothing line??

  66. I feel as if the author of this post has been secretly watching me for the past year and a half. I’m undoubtedly a case in point. I’ve run the gamut of useless indicators on every chart imaginable, from traditional candlesticks to range bars to Renko bricks and Heiken Ashi candles, with everything from the moving averages to MACD, RSI and even fancy indicators created by the usethinkscript community…all to little or no avail. I can’t count the times I’ve studied losses and said to myself, “well, if it hadn’t been for that d**n indicator I would’ve gotten in at point A, sold at point B and turned a profit instead of a loss.” I literally have a full trading journal of examples, complete with screenshots that show my loss followed by a full blown green field of candles the rest of the day, if not week. Talk about creating an unnecessary burden of analysis paralysis for myself with these indicators…I’m glad I started looking into price action trading and found this site. Thank-you!

  67. You have confirmed exactly what I have been experiencing. I am exhausted with the indicators. They keep me distracted. Thank you so much. I have been doing this for 3 years and could not figure out why I continue to lose. I am forever jumping around looking for the easiest strategy. I am going to try price action alone.

  68. When setting the 10 and 20 EMAs do you set the “Field” to “Open”, “High” or “Low”? Some charts, such as on Yahoo, let you choose.

  69. Absolutely amazing post. This was truly something I needed to read, and I will continue to revert back to this post because you haven given me information to last a lifetime. Simplicity & price action truly is key. I will now be removing the RSI from my chart and the MA’s; but I will definitely use your advice on the 10&20 EMA to always determine the means.

    Thank you so much

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