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This lesson, and the one following it, are are pretty much just of a rant against indicator-based trading, and indicators in general, so if you already know the joys of indicator-less trading feel free to skip them and move on to Supply & Demand. If, on the other hand, you think indicators are the greatest thing since sliced bread, or if you’re not sure how to trade without them, then keep reading.
The nuts-and-bolts of Forex trading are easy to learn. Any Forex broker will teach you, right on their website, the definition of a pip, what phrases like “go long” mean, and how to use your trading platform. After these basic lessons most new traders are released out into the wild world of Forex, without a clue how to actually trade.
When people realize that they don’t know what to do next they turn to people selling Forex trading systems, or they go through every single Forex trading forum on the Internet, hoping to stumble onto the perfect mechanical system that will make them rich. Or, even worse, they pay for an expensive trading robot or signal service, hoping that someone or something can do their trading for them.
They want easy money, so they cover their charts with one useless indicator on top of another thinking that these indicators will tell them when to buy and when to sell. They can then just sit back and watch the money come rolling in.
The problem is that the Forex “Holy Grail” doesn’t exist. There is no indicator, Forex robot, or mechanical trading system that will make you money if you don’t understand how and why the Forex market moves. Once you learn why prices move up and down you can start to predict when they will move up and down. All you need to do this is a simple candlestick chart and a little knowledge.
Depending on how long you have been trading with indicators this might sound scary, or even foolish! If you’re one of those traders who only knows how to trade with indicators then it can be hard to fathom the idea of giving them up because of the false sense of security they provide. Indicators are like a crutch that make traders think they have an understanding of the Forex market, but they don’t. In reality you’re not really trading the Forex market, you’re really just plugging numbers into a few mathematical formulas.
So what’s so much better about the Smart Money Forex way of trading? The method is better because it’s is a form of naked trading, and just like when you see another person naked, you get to see the Forex market in all its glory!
Trading without indicators is just like eliminating the middle man. Instead of the indicators telling you what the market is doing, you can see it for yourself. This is, however, terrifying to a lot of traders. For some reason many people feel like an indicator has some sort of magical insight into the market that the human brain can’t comprehend. That, in my opinion, is a load of crap.
Indicators have absolutely no flexibility. They are just a math equation that is used over and over again, regardless of market conditions. You, on the other hand, aren’t limited to one way of perceiving your charts. You can understand the complexities of the market. If you’re reading this then you probably don’t yet know how to understand the market, but trust me… you can, and you will!
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