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Many traders mistakenly believe that the key to success lies in generating indicators or endlessly experimenting with technical analysis software. This is a misconception. No truly proficient trader spends their time experimenting with every new script on platforms like TradingView. Indicators are merely a part of the system, not the system itself.
If you find yourself devoting all your time to manipulating indicators, you’re not engaging in serious trading—you’re indulging in a hobby. Let me be clear: there is no “magic” system or “Holy Grail.” What sets successful traders apart is discipline and common sense.
Here are my core beliefs regarding indicators:
1. Simplicity Wins: The more complex an indicator is, the less effective it likely is. If you’ve spent a small fortune on a “super-secret” indicator course, you may have been misled. The best systems are simple. Markets only do three things: go up, go down, or stay flat.
2. Focus on Trading, Not Software: The more you focus on mastering your software, the less you understand about actual trading. Collecting software and indicators often means you’re neglecting the fundamental aspects of trading.
3. Nothing New Under the Sun: There is no such thing as a truly innovative indicator. Most indicators fall into two categories: trend-following or oscillators. Similarly, the markets themselves are not original—they simply repeat patterns.
4. More Does Not Mean Better: Some traders believe that adding more indicators will make their strategy stronger. This is a false assumption. The truth is, it’s the trader who makes the indicator work, not the other way around. A skilled trader can succeed with any trend-following system, regardless of its complexity.
Source: create.vista.com
5. Indicators Are Placebos: Indicators are tools that provide the confidence to make decisions, but the real work begins once you pull the trigger. They offer psychological support, but success depends on your execution and strategy.
6. Find Your Rhythm: Confidence in trading comes from understanding market behavior—watching how it moves, ebbs, and flows. If you’re struggling to find this rhythm, try an exercise: stand in the ocean up to your thighs, close your eyes, and feel the water’s motion. Once you’re in tune with the water, you’ll start to anticipate its tempo—just as you need to do with the market.
7. Focus on Your Own Trading Journey: Don’t concern yourself with the indicators others use. What works for me may not work for you. It’s like the time I thought using the same tennis racket as Bjorn Borg would make me unbeatable. Success in trading, like tennis, isn’t about copying others but about developing your own approach.
8. Evaluate Your Progress: If the majority of traders are obsessed with indicators and still losing, it’s time to reconsider your approach. Learning from the failures of others is a powerful tool in developing your own trading strategy.
In conclusion, while indicators have their place, they are not the key to becoming a successful trader. Focus on mastering the basics, developing discipline, and trusting your own ability to interpret the market.
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