If a survey was handed out to retail forex and futures traders and one of the questions that was asked was “what method or system did they first trade with,” without a doubt the huge majority of traders would say they started with indicators such as moving averages, stochastic, MACD, Bollinger Bands, and the list of goes on and on. The reason indicators are so popular is that they feed into the new trader’s belief that the indicator can help predict where price is going to go.
The root of the problem with using indicators to analyze the forex market lies in the fact that all indicators are second-hand; this means that instead of looking at the actual price data itself, you are instead trying to analyze and interpret some variation of price data. Essentially, when traders use indicators to make their trading decisions, they are getting a distorted view of what a market is doing. All you have to do is remove this distortion (the indicators) and you will obtain an unobstructed view of what price is doing in any given market.
Among the infinite diversity of various trading systems and indicators on the foreign exchange market, the ordinary trader is easy to get lost. Methods of estimation of price movements have become popular and play major roles in making trading decisions. Forex strategy without indicators can be based both on visual graphic signals, and be completely fastened only on money management. Such strategies are popular among different types of traders. Fans of forex strategy without indicators prefer to rely directly on the dynamics of prices, not the late data from the oscillators and togas on.
There is no question that technical analysis can help you greatly in making trading decisions, and many forex traders would be hopelessly stuck without it, but it is still possible to make good profits without using any technical indicators at all. Naked trading is basically their flavor of price action trading. It is when you use price action alone to determine when to enter and exit trades. No indicators and no complicated chart setup.
The most simple and uncomplicated trading method in the world is price action. All that is needed for trading price action is a blank raw price action chart and your trading method. The major difference between indicators and price action is with indicators you are using old lagging price action information to try to predict the future, but with price action you are continually reading the raw and live price as it is being printed on the chart. Basically price action trading is the skill of being able to read the price and make trades on any chart, in any market, in any time frame and without the use of any indicators at all.
