Wisdom

Using Technical Indicators vs Trading Based Purely On Price And Volume Charts

The debate among traders over advantages and disadvantages of using indicators will never cease. There is no correct answer or absolute truth regarding the use of indicators. It all comes down to your personality and the way you see the markets.
Some traders plot Bollinger bands, OBV (On Balance Volume), plenty of moving averages and Fibonacci retracements on their charts. Then they tried to be even smarter and then added MACD, Stochastics, RSI, ATR and ADX to the mix. You get the picture. They ended up with ‘Spaghetti Charts’. You take a clean chart and literally throw spaghetti onto the chart until it becomes completely unreadable. The result is the well known ‘analysis paralysis’.
While I can’t seem to trade based only on Price and Volume Charts, some traders seem to be able to pull money out of the market with this approach.
The solution is to keep things simple, the fewer the better, use what works for you, a couple of indicators should do the trick.