Thread: Why common indicators do not work any more?

Everyday, thousands of Forex & stock market traders use the common indicators which are available to them by their brokers. The traders have learned how to use them either by training schools or online research. However, these indicators do not have the desired effect to power the traders to make steady and constant profit because they have become redundant. For example, George enters a buy trade when RSI is below 30, but, he loses the trade. Why is that? The answer is simple:

When George enters the trade at that time, Mr.Ali, Mr.Steve, Mr.Hun and hundreds of new and old traders around the World enter the trade at the same time because they have been told to buy when RSI is below 30. The Buy and demand rule tells us that the price will go higher because we have higher demand, but, the opposite happens. You need volume or more traders to make the price higher, but, when most traders have already set their position under RSI=30, there is not enough momentum or volume to push the price higher. It is like a train which tries to go on top of a slope but there is not much fuel left to move it. This is the situation in which false BOTTOM/TOP condition occurs. Of course, Big Boys love it and they make most of their money at this period.

So, what is the solution? What should we do? If you want to be a good trader you must learn how to study the chart free of any indicators. The chart reflects the Human Emotion: Fear, Greed, Sadness and happiness.

Best Regards,

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