The most common strategy in forex trading is the implication of technical indicators. While it may seem like a priority to use indicators during trading, that’s not the full truth. Some traders trade forex without indicators during their sessions. The question is, what is the difference between these two approaches?
It may seem confusing at first and contradict what you have learned and read but there is such a strategy that does this. The following article will unravel and clear out all this confusion to help you find the best trading method suitable for you.
How Useful Are Indicators?
Forex indicators are a widely used tool in the forex market. What makes indicators very useful and popular is the way they help the trader to identify market patterns and trade upon them.
A forex trader tries to collect and analyze information to aid decisions while trading. It can be hard to collect and organize this information individually. The solution that traders have come up with is technical indicators. Technical indicators analyze different data and indicate to the trader different aspects of this data and how it can be useful. Some of this data is volume, currency price, and market performance. When all this data is collected and analyzed it helps the trader to make a more informed decision on whether to open or close a particular trade.
Can You Trade Forex Without Indicators?
The benefits of forex indicators are now known and a question comes to mind, what’s the reason for not using them? Indicators can sometimes be confusing to trades and a forex strategy without indicators may be a better path to take.
Trading without indicators has been around for a long time, but it has been undervalued since most traders use indicators while trading. The way a forex strategy without indicators is used is to focus on price action to determine when to enter and exit a position. The price alone can be enough to determine the strength of the market and whether to buy or sell.
To trade without indicators traders tend to use the following:
1) Candle stick patterns: They can be used to determine the current state of the market and whether it is trending or not.
2) Chart patterns: Price movement on the market can result in the price charts forming a specific shape. These shapes can help to decide if the price is going reverse or not. Chart patterns are important whether you are using indicators or not.
3) Support and resistance levels: Support and resistance levels can help determine the strength of the market and when to enter and exit a position. An area is formed due to price action and if the price can not go higher then it’s called resistance, and when it can not go lower then it’s called support.
What Are The Drawbacks of Not Using Indicators?
When you trade forex without indicators there can be some drawbacks. To be able to trade in this way a good understanding of the market must be acquired. The trader must be able to recognize real-time patterns and cycles in the market. This can be a problem for beginners who are just starting.
Also when a trader gets used to using indicators with his strategy it can be difficult to adopt a forex strategy without indicators. It may take some time to learn how to not use indicators when trading.
What Are The Benefits of Not Using Indicators?
A forex strategy without indicators can be very useful to the trader in many ways. The most important reason is that trading without indicators can help you understand what is happening in the market on your own. Without indicators, all the trades made are based on your analysis and not the interpretation of indicators. This can also help you to avoid costly mistakes that you may have not been aware of when using indicators. All of this can help grow the trader’s knowledge in trading forex.
Conclusion | Can You Trade Forex Without Indicators?
Indicators are a common tool known in the forex market. The use of indicators is not always the case for all trades. A forex strategy without indicators can be very beneficial. When a trader doesn’t use indicators a better understanding of the market can be acquired. You can also grow your knowledge of trading when not using indicators. Candlesticks, support and resistance levels, and chart patterns are used by traders when not using indicators. In all, both with or without indicators can be very useful so the decision is all up to you.
