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It has been some time since I updated the site and by popular request I have uploaded some new trading videos for your perusal. Many thanks for all the encouraging and interesting emails which I have received from subscribers and passers by on the site.
A lot has been going on in between and our active trading has continued apace. Price action trading has become somewhat flavour of the month, however I never cease to be amazed at the number of technical indicator packages which spring up all the time and which continue to attract the unwitting investor. Just take a look at the pages of the 30th anniversary of Stocks and Commodities magazine. It seems that individual beginner traders simply can’t away from the plastering indicators and lines all over their charts -to me this smacks of lack of market knowledge – as if they unable to walk and need a crutch to help them.
I am often asked how did we come to use just price in our trading – the answer is quiet simple, via the realisation that indicator s are mostly just noise, they confirm what you already know about price, but they do so mostly after the event has already happened.
Take the moving average cross over – anybody who has been trading for very long will undoubtedly be aware that the moving average cross systems were some of the first computer driven systems invented as far back as in the 1960′s, with the likes of Bruce Babcock spear heading research and development.
The trouble with those systems as price action traders understand is that they are attractive and easy to understand – too easy in fact – and therefore the beginner trader is drawn to them. The trader sees a couple of brightly coloured lines cross over and receives his signal to push a buy or sell button. Even better, his automated system pushes the button for him.
The issue that I have is that such a buy signal comes after price has actually showed it’s hand and therefore the trader gets into the move later than he/she should do. Certainly way after the price action traders, for example. This causes an issue of profitability for the cross over traders as they are immediately at a disadvantage. The sting in the tail is that not only does such a system get you in to the market late, it gets you out late, because of the lagging nature of the indicators in question.
Most indicators lag and even if you don’t like price action trading can’t do it, don’t understand it or whatever, do yourself a big favour and don’t trade using lagging indicators which will cost you dearly.
I take nothing away from some of the very famous and intelligent trades and developers who have done many hours of long research in order to create such indicators, it’s just that what was current and mouth-watering in 1970 is no longer so. In those days, some of the best systems around used moving averages, the markets were very ‘trendy’ and with a 40% win rate funds were making money.
It isn’t that we don’t have trends anymore, we do, but perhaps the nature of those trends is somewhat different, the pullbacks perhaps slightly sharper and most of those average systems tend to get whipsawed all over the place.
In addition to trading Forex we also have positions in some of the Equity and Futures markets , anywhere in fact where price moves in an attractive manner and the market can be read is a good hunting ground for us.
Within the next few months I will be developing a training series related to Price Action and I will follow this further series related to some very specific trading setups which we use most days and which give us a very high win rate.
For those that are new to the blog, please do stick around, take a look at some of the videos, subscribe to the newsletter and take a look at what we are doing and offering.
Good trading success to everyone.
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