Forex Lasers Forum

Go Back   Forex Lasers Forum > FOREX TRAINING > Forex Articles

» Forex Ad
LinkBack Thread Tools Search this Thread
Old 12-10-2017, 18:31
painofhell's Avatar
Level V Lasers Member
Join Date: Aug 2014
Posts: 2,969
Default An Indicator Has No Concept of Trend

It’s a great question since many traders, especially newer traders, literally become fixated on the indicator at the expense of everything else. When the indicator gives a buy signal they buy and when it gives a sell signal they sell…regardless of what is happening on the price chart.

Always remember that price action, the direction that the pair is moving, is our primary indicator…Indicator #1.

So, first and foremost, we need to determine the trend on the pair, the direction that the market is moving the pair.

Take a look at the Daily chart of the CADCHF below…

We can see that the pair is in a downtrend on the chart so we know that we ONLY want to find reasons to sell the pair. Knowing that and using the Slow Stochastics indicator on the chart, we will only take selling signals and ignore the signals which tell us to buy the pair. Each of the signals in the black circles would be the selling signals and a short position could have been taken successfully on each one.

The buy signals in the red boxes are to be ignored in a downtrend.

Keep in mind that a trader can still have a losing trade even when taking a higher probability entry. However, your likelihood of having a successful trade will be enhanced (not guaranteed) by entering trades in the direction of the trend.

Remember, the indicator has no concept of trend, it only reflects momentum. As traders, it is up to us to determine the trend and then use our indicator of choice to only take trades in that direction.

Reply With Quote

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On

Similar Threads
Thread Thread Starter Forum Replies Last Post
An Indicator Has No Concept of Trend painofhell Forex Articles 0 10-08-2017 23:21
Master the Concept of Greed-Free Trading painofhell Forex Articles 0 05-07-2017 01:41
Free Ixbone Forex Trend Catcher & Price Action Combo Indicator Ixbone Indicators Discussion 1 06-05-2013 16:06
Free Ixbone Forex Trend Catcher Indicator Ixbone Indicators Discussion 3 06-05-2013 16:04
PW-TREND INDICATOR manus168 Indicators Discussion 1 17-09-2009 04:01

» Forex Ad
» Log in
User Name:


Not a member yet?
Register Now!
Powered by vBadvanced CMPS v3.2.1

All times are GMT. The time now is 23:54.

Powered by vBulletin® Version 3.8.10
Copyright ©2000 - 2017, vBulletin Solutions, Inc.