The Benefits of Trading With Price Action
It appears to me that every time a new trader wants to learn about what it takes to trade the forex marker, they will usually spend all their time scouring the internet to and learn about using indicators like stochastics, MACD, moving averages as well as the other common ones.
What eventually happens is that is all you see on their trading charts: indicators. It really never dawns on them that they are not trading correctly. Sadly, trading with price action never comes to their mind. Many traders get scared when they hear the concept, and think only smart people can trade it. They would prefer just using their indicators to tell them which way the market is headed. However, they really dont know which way the market is moving.
When you trade with indicators, its somewhat like trading with other peoples signals. All you are doing is hoping that they are right. You dont really understand the underlying reason why you are taking the trades that you are, you just hope that their opinion is correct, (or for an indicator, their formula.)
But the whole idea of trading forex by just using price action is that you get to eliminate all the clutter that is on your screen. By doing this, you get a clean and unbiased look at how the market actually moves.
One of the biggest obstacles for traders who are using indicators is the fact that on many occasions indicators will give you two opposite signals. For example, moving averages can be telling you to buy, while MACD is telling you to sell. So you are really just sitting there and waiting for these indicators to align, in order for you to take a trade.
Since many traders dont really understand the concept of price action, what happens is that they are left just sitting there waiting for their indicators to line up in the same direction.
You can understand that this can certainly be an awkward position for a trader. After all, you are sitting there waiting for some random lines to match to take a trade, which you dont really comprehend, what these lines even mean.
What I would like you to do is the next time this idea of trading without indicators pops in your head, I want you to think about all the floor traders on the New York Stock Exchange. Think about the fact that most of these traders do this for a living without having to even use charts, much less indicators.