Technical Analysis For Forex Trading

While information technology does carry over to other markets as well, when it comes to Forex trading in item, the technical analysis we use here at No Nonsense Forex is unparalleled.

Below, I will explain why.

Warning: This is a long weblog post, and does not give you any tools you can get out and use correct now. Feel free to abort now if this is what you were looking for. No harm washed. Come up back someday.

The Fashion It Was

For the life of me, I still to this day cannot understand how and why technical assay has refused to evolve the manner literally everything else in this world has over the past fifty years. It'southward downright bizarre.

Even today, some of the brightest minds in finance will postal service a technical chart up on the screen from time to time, and information technology will exist an absolute calamity. If they only knew.

Spot Forex went "mainstream" I suppose in 1996, when traders now had the ability to trade over their dwelling house computers. Naturally, technical analysis plays a large function in trading, so traders were eager to find ways to use charts and be able to plot charting tools to help them determine which mode a currency pair was heading.

Which tools to use? Well, most traders just knew of most 5-15 different options at the time. These tools had been effectually for a very long time because the majority were created in the 1970s and 1980s for stock trading.

Little did anyone (literally anyone) know, there were many, MANY other options available. Options created past skilled computer programmers, who were programming at exponential levels in terms of skill and experience compared to decades past.

Modern technology was out at that place, but nobody had the base minimum level of curiosity to discover it.

What's even more appalling is how most 25 years later, modern technology itself has multiplied in ways never before seen, all the same the vast bulk of technical traders are all the same blind to it.

Most of today'due south technical traders are still only aware of the aforementioned five-15 tools as before.

What?

Information technology was crazy dorsum in the early 2010'southward. I would wake up every day and feel similar I was on some kind of paranormal TV show where only I could meet the other ten,000 tools, like they weren't actually there in real life.

Yet here nosotros are, today, with all the technology we take in social media and in technical trading, and it's no unlike than information technology was before.

I feel similar I'm in the Twilight Zone sometimes.

"I Recollect It's Foreign You Never Knew"

Fifty-fifty today, most traders have no thought these other tools exist. No Nonsense Forex traders do of grade, so it seems similar that number should exist higher, but nosotros go along to exist a drop in the bucket of traders worldwide.

On my Dirty Dozen video where I tell traders to avoid 12 of the most commonly used charting tools bachelor, at that place is a question in the comments section I keep getting over and over.

"So what am I supposed to employ then?"

I have to laugh. The blindness is real. So real, out of the 10,000+ tools bachelor, I erase twelve of them, and these people accept absolutely no other recourse. They really practice retrieve there are none left remaining considering I took them all abroad.

This is Forex teaching's error. Day later day showing the same tired charts with the same 12-15 tools on them, to the signal where our muscle memory sees this as the only available options later on a while.

Hell, maybe I'chiliad being also hard on the educators. Perhaps they didn't know either.

It is funny to me though. Information technology's like existence thirty-years-old and non knowing there were more water ice cream flavors bachelor on this planet across vanilla and chocolate. If you met somebody of that age who wasn't aware of whatever other flavors, yous would have lots of questions, I'thou sure. Withal this is the norm in Forex.

Failure To Adjust

Only how fast is it technology growing? xc% of the globe's data has been created in merely the by two years.

Every industry on the planet has defenseless up, at to the lowest degree somewhat to all of this new technology. They accept no choice. Their competition would accept them downwards tomorrow if they did not.

Every manufacture of course, except for technical analysis.

To this day, I still cannot wrap my head around it. Thousands of great technical indicators, many of which were adult in this millennium, get completely undiscovered by millions of traders who have been programmed and conditioned not to search them out somehow.

People are using rotary phones, on purpose. And what's more, they're strangely proud of it!

"Jail cell phones? Pffft. Existence tethered to the wall is the only style to go, everyone knows that."

It'south so prevalent, that many traders balk at the thought of doing anything else. Like a child who spent their whole lives on a cult chemical compound, they spew pre-packaged lines of disobedience towards my channel and anyone who dares to seek out superior and modern options.

"Y'all need to report price action".

"Indicators are for lazy traders".

"You'll never know where the market is going with out back up and resistance lines".

NPCs, all out frolicking on vacation. You tin can tell these people are parroting lines from other online instructors. Non an original or curious bone in their bodies.

Look, well-nigh people in this earth take a "Merely tell me what to do" mentality. One quick glance at the comments on my YouTube channel shows this all too well. Information technology'due south as if a cutting-and-paste arroyo was the key to unlocking success in a 3-6 trillion dollar a day market this whole time.

As a result of this crippling dumbassery, an online teacher or self-proclaimed guru simply tells them what to do, they go do it, and then they neglect. Over and over.

The crazy function however, is how despite this often instant failure, they volition still defend these methods to the death. They've already died on the hill they tried to defend — and their corpse yet wants to argue.

Simply again, I get it. I know why people are so resistant to try our way.

Sunk Cost

Trading with trend lines, fibonacci, support and resistance takes a lot of trial-and-error to finally settle on a method you lot tin can utilise over and over again.

And because there is then little certainty to the signals these tools give yous, this whole trail-and-mistake process can take a very, very long time.

So after you've done all the frustrating legwork, frustrating because no matter how proficient you get with these tools, it'southward never enough, you want me to close information technology all down and dive into a sea of 10,000+ indicators? No fucking mode.

Once more, I totally become it. You lot will resist getting started in this new arroyo equally hard as y'all can, coming upwardly with any excuse you tin can think of.

You've sunk too much cost into an inferior way of trading, and y'all're too scared to learn if this was in fact the case. And let's be honest, the results are already telling you this. Only you don't want to let go.

To you, I don't have much to say except for, "Just do information technology anyway".

Yous owe information technology to yourself to notice the nigh optimal way to use technical assay, regardless of how long it takes.

How awful would exist to get through life knowing there were far more than effective options available, but you purposely chose to ignore them and scoff at them out of your ain sloth?

Starting over and doing things a completely different way is difficult, and time-consuming, and you don't have what it takes to exercise those things.

Thankfully, some people do. And they're the ones who fabricated information technology.

"Merely The Pros Use These Tools"

Yes, they practise. No Nonsense Forex has only been effectually since 2018, most people who have found the fabric didn't do then until 2019, and the vast, vast majority of traders out at that place nevertheless don't know nosotros exist.

Yet, there were still professional person technical traders making money in their professions before 2018, and they continue to exist today, doing consistently well with things like support and resistance and the RSI.

The most pop forex technical trading sites on the internet, all still use some combination of the ancient tools of stock trading's past.

And I'm going to sit down here and tell you lot information technology'south inferior? But it'south "worked" for so long!

Absolutely. But you're purposely not thinking this through.

It's possible to still win with inferior tools. I did a whole podcast on this, but I tin sum it upwardly right here.

We have established already how trading psychology is the #1 most important aspect of trading.

Money management was second.

Technical analysis was 3rd.

I will guarantee you lot every existent professional Forex trader who was always to sustain a successful career for more than 5 years had top-level trading psychology and money management. All of the professional traders I know have it locked down with the best of them.

What bully technical assay does is up our odds (another podcast ep), making our win charge per unit higher, therefore making our results even better than we would with inferior tools or flipping coins.

Only fifty-fifty without top level TA, it is certainly possible to prosper and have a long professional trading career based on your charts. Possible, absolutely, there is living proof out at that place for sure.

Just probable? You've got to be kidding me.

Out of millions of people trading the markets, you could probably count the number of pros y'all are personally aware of on one mitt, and the corporeality of pros using technical analysis as their master guide on one finger.

Carve up that into millions of active traders. Does this seem likely to y'all?

Typical weak-ass, Naxalt Fallacy nonsense.

Credit to lifelessons.co

The pct of pro traders in an ocean of non-pros is sooo slim. You lot but cannot afford to utilize every possible advantage you can. And if you're purposely avoiding 10,000+ other possibilities, you lot're also purposely doing things in a sub-optimal fashion.

The chances of y'all going pro are modest, just thanks to your inability to adjust, they have now gotten much, much smaller.

"But I Take Had Success With These Tools"

Have you lot really though? Or are we lying to ourselves.

More than importantly, how long did this "success" last?

At that place are actually people out there who think I'1000 upward here saying that every fourth dimension you apply a trend line to trade, you're going to lose money. And and so they wonder why I don't reply to their annotate.

Moments where these tools work will certainly occur, sometimes often. The number you're really looking for is yearly ROI. This long-term view really reveals the truth behind your success.

These "moments" of periodic success are dangerous to your lesser line, considering they re-inject hope into your veins right as you're about to give up on what is certainly a failed long-term approach.

Merely like a deadbeat sports bettor who's broke and owes a loan shark $xxx,000. He will hit 1 four-squad parlay, win $1000, and utilise that equally justification for why he should continue to be in the betting game.

Seriously, it's no different. Same diseased mentality.

And allow's say I'thou wrong, and yous actually practise win with these tools. I would sincerely say "congratulations" to you for defying near insurmountable odds. You must certainly have top-level money management and trade psychology to pull this off.

Merely y'all could nevertheless do and so much better. You practice know that, right?

Wouldn't you want to do even ameliorate than you've been doing?

How could this answer exist annihilation merely a loud and enthusiastic "Yeah"?

Only it's not. People who put in a lot of effort before when they learned about these older tools, seem to feel like they're all done with the work and don't want to put in any more of it. I guarantee this is a main reason for so many people's objections.

After all, why would you not want to improve what you have and get amend?

NNFX traders realize that the work never stops, and comeback is a Practiced thing.

Certainty Matters

Autonomously from several of my YouTube videos, nosotros have also debated price action vs indicators on the podcast as well.

One of the master things it actually comes downwardly to however, is how i side gives you a definitive signal to go long, get brusque, or do nothing — and the other side does not.

Unless you're somebody who actually over-thinks everything, at that place is no ambivalence to Forex indicators. They clearly tell y'all to go long, get short, or do zippo.

There can be unlike ways to utilize a single indicator, but once y'all have chosen the method you want to abide past, it's as clear and easy as it gets.

Support and resistance lines? Not and then much.

Even people who have been using support and resistance lines for years will still have a chip of lingering incertitude every time they enter a merchandise.

"Is this a breakout or a reversal?"

"Am I on the correct timeframe?"

"Is this line withal valid fifty-fifty though it'southward already been broken?"

"There seems to be a stronger line a bit to a higher place. Should I wait for it instead?"

To an experienced price action trader, these questions may seem a scrap light-headed, but believe y'all me — out of all the potential possibilities, yous can bet your bottom dollar Forex Twitter is going to be right there, afterward the fact, showing off the one line that mattered.

And that line may take even been a trend line or a fib level instead! Forex Twitter doesn't care. Once you have the luxury of hindsight, you can cull whichever line fits your narrative the best.

There is never a definitive trade when it comes to toll action trading.

And that can be very frustrating. We've spoken ad nauseum almost how trading psychology is the #1 most important concept in all of trading.

There is no better way to add an actress dose of self-doubt to the equation, than to trade price activity, and to never know if you indeed took the well-nigh optimal trade bachelor.

To all the price action traders out there, I'chiliad not trying to make it look like you have 16 lines to option from at any given time, and yous have no idea which one to choose. Many of you are far more skilled than this.

What I am saying is that at any given time, in that location are multiple approaches available on the board, one of them will probable be the best option, and information technology's tough to know which one it's going to exist. Non a lot of certainty there.

Yous merely have to give it your all-time educated guess. And "giving it your best educated guess" is not a winning strategy, in whatever arena.

Indicators Are Like shooting fish in a barrel To Test

Management guru Peter Drucker said information technology best. "If you can't mensurate it, you can't improve it".

This is not skillful news for toll action traders.

Could y'all imagine trying to backtest a support and resistance strategy? What a mess! You could maybe try to automate it, but achieving accurate results there would exist even more hard.

Nautical chart patterns and such are a flake easier, but tin can yield very few signals and be a lot more difficult to see after they have already developed, increasing the margin of error. They're not even all that accurate anyway every bit we've discussed earlier.

And tendency lines, forget information technology. Especially considering how in that location is no consistency whatsoever as to how they are drawn.

When you have clear and defined signals like you do with indicators, testing is a breeze. Signals are very like shooting fish in a barrel to locate, and once y'all have your money management parameters plugged in, you know exactly what to do, and know exactly if that trade was a winner or not.

Simple, accurate testing. Testing which most chiefly, can be improved upon over fourth dimension.

Sir, Your Boner Is In The Way

I don't think nosotros demand to spend any more time on toll activeness. If yous still feel similar prehistoric tools are the fashion to go in a market full of modern applied science readily available to yous, you and I are just non the same.

I hope you reach your dreams someday. Keep chasing that dragon!

On to the indicators themselves. Now we have a whole new contend going on, and it's as every bit os-headed as the price action debate, and I would argue even moreso.

How many indicators are bachelor to everyone with an internet connection and a laptop? More than ten,000.

How many indicators practice nigh non-NNFX traders know well-nigh? Permit'southward count them.

RSI

CCI

Stochastics

Ichimoku

SMA/EMA

Bollinger Bands

Parabolic SAR

That's probably near information technology.

Most traders aren't even enlightened of the majority of indicators which come standard on MT4. They simply have no want to know near them. This listing is about it. And me adding Parabolic SAR may have been stretching it.

Indicators are easy to fall in dear with. They take the painful guesswork out of trading, you lot tin can (usually) conform them to your liking, and this can give traders their ain identities.

That terminal part was important, specially for male traders, and I recollect this accurately explains why people get a lot more mad at me when I trash certain indicators compared to my videos on price action tools. As silly equally it may sound, people accept their indicators very personally.

Often at times, male traders who in the past have felt how they have had depression status or no true identity their entire lives, now have something to finally hang their hats on when they detect how to use a particular indicator. Information technology's a really big deal. Egos are particularly enormous in Forex trading. I should know.

Traders will not merely attach themselves to this identity, they will spend hours upon hours going as deep as they tin into all of the piddling intricacies their favorite indicator can provide.

Problem is, they're going deep on inferior tools. It was a waste of time, and the concluding thing they want is somebody similar me coming in and exposing this. The reactions will not be kind.

Imagine thinking those listed indicators were your merely choices — then wasting all that time on them. This is the norm, believe information technology or non.

As we mentioned earlier, all of the previously listed indicators were adult way before spot Forex became a mainstream thing in 1996.

And instead of advancing with the times like literally everything else does — somebody idea it was a skillful thought to conduct these dinosaurs over to the modernistic trading world.

"Say in that location dear boy, have I always told you about the stochastic oscillator?"

Realizing there was a whole new, modernistic world out there this whole fourth dimension, and you have spent the last 5 years of your life missing out on it and squandering all of your time learning how to use an abacus is a existent kick in the assurance. I get it.

Merely yous demand to shake it off and pace into this century. Or even the most novice of traders are going to first passing yous upwardly tomorrow. No fourth dimension for ego here. No fourth dimension for petty arguments either.

Oh only the trivial arguments will come. If y'all accept never seen me accost these before, allow me to do it correct at present, for the purposes of linking this web log mail service to anyone in the future who wants to contend minutiae with a guy who doesn't feel the need to argue dorsum.

And I really don't care, everyone has opinions, only what I'm trying to avert is to have a newbie trader come in and see these half-baked arguments and really think they accept any bearing whatsoever, considering they don't.

The Boofus Files

Whatsoever time I do a video or podcast on a concept which I think is an ultimate failure, there is resistance.

You've gotta remember, up until NNFX came around, many of these quondam, junior tools were being called out by absolutely nobody. And then bizarre.

Equally much as I don't engage with YouTube commenters, I really would from fourth dimension to time if these counter-arguments had some real validity to them. But they don't.

Y'all may accept some of these arguments floating around in your head as well. Over the years of doing this, I've had the run a risk to run into a lot of them. Let'south become ahead and address the most common ones now.

I wrangle all of these arguments up into ane, and take created a graphic symbol over fourth dimension who embodies these objections quite well I call back. I have named him Boofus, and he has made a number of appearances on my channel and blog.

Boofus is nowhere well-nigh as popular as NNFX regulars Marco and Frida, I'thousand probably the merely one who gets a kick out of him, simply he's essential to understanding where this channel is coming from in regards to my dismissal of many of the nearly popular Forex trading tools.

"VP is an idiot, I make great money with the RSI. And past the way, if anyone wants to help, my cashapp is $Boofus69x…"

Let's knock out four of the most major objections I go.

i – "You're non using it the right mode"

First off, I'yard going to stop y'all right there. In that location is no definitive "right" and "wrong" ways to use trading tools.

In that location are certainly optimal and sub-optimal ways, just those are, and will forever be upwards for debate. So terminate speaking in absolutes. As steadfast as I am in my opinions, at the stop of the twenty-four hour period, they're still no more than mere opinions.

2d, I'thou a content creator. When researching how people utilise these tools, I need to focus on the most common way they are beingness used, and address that. I volition not needle-option every single method I tin can think of when it comes to something like support and resistance lines for example.

I volition exercise my best to state the fundamental flaws, and then motility on. Elimination is one of the main focuses on my aqueduct, and I exercise my all-time to get these concepts out there and then y'all tin can see them for what they are in a traditional sense, and fix to move on to something meliorate.

Looking at YouTube, Twitter, and IG, you tin easily run across how most people are approaching a certain technical tool. It'southward not hard. The near common usage is usually very, very common. Like 95%+ territory.

But people become maaaad.

"Y'all're not supposed to use Southward&R as lines, but every bit zones, stupid!"

Funny that, because most people don't use it that way. And how big should these zones exist? Practice they vary per currency pair? Practice they vary based on volatility? They should, but I'll bet on your nautical chart they don't.

"You neglected to mention how you can use the RSI as a tendency indicator when information technology passes the 50 line."

Aye, and that was on purpose. Very few people use it that style, and there are fashion better null/midline cross indicators out in that location.

Await Boofus, I'k sorry I neglected to accost your super special style of using trend lines on my video. I value other people's time also much I suppose. It's non always about you.

Above all this, my principal counter-statement to this logic, or lack thereof, has yet to be spoken well-nigh. I'm going to relieve it until the terminate. But moving on….

two – "You always tell us what Non to use, instead of telling us what TO utilize"

I don't have any time or patience for shit similar this. People who say things like that accept watched 3 out of 165 videos, and now think they know exactly what my channel is almost. You see variations of this all the time.

If that wasn't dumb enough, they've exposed themselves every bit the type of people who are just sitting there like a baby bird waiting for me to spit something into their mouths. Losers, and proud of it.

Next.

3 – "You simply oasis't gone deep plenty into it. That's your biggest problem."

First off, as I said before, virtually nobody goes deep into the CCI indicator for chrissakes, and my videos are for the majority of traders — non the tiny minority of people who practise things like read books about the CCI.

2nd, if you just thought vii indicators existed, going deep on 1 of them wouldn't be a terrible idea.

If you were aware of the fact at that place are over x,000 yet — going deep on any of them would be a pretty large waste of time.

But this argument does come. "VP, if you lot would have taken the time to read this book written back in 1983, yous would run into…."

I would see a book written about an old indicator created for stock trading. I'm not interested, and neither are most modernistic-day traders.

Guys, I get the frustration. People think I'm misguiding others by non being a completionist and spending hours tackling every possible bending on these tools.

Then again, my channel is pretty darn successful, as are many of the people who follow it, so I'thousand going to say my approach was likely the correct 1.

4 – "I'thou doing actually well with <insert old trading tool here>"

In that location are days when I see comments similar this, and I immediately want to reply with, "Way to go! Everybody cheer for <whatever his screen name is>!"

And then have 20 people reply with "Yaaaaaayyyyy!"

And then I accept three rebuttals to this.

First off, I'grand going to play the odds and say you lot're not doing THAT well with it. People who exercise really well in Forex trading are rarely compelled to go and shitpost on other people's channels. Information technology's only not in their DNA.

2nd, if this were actually true, then smashing! You have defied the odds.

……yous would have still washed better with superior tools though. There'south however time.

Third, let the states not forget this:

So there are the people who say they "know of" somebody who makes millions using these tools, or something to the effect of "the pros make millions with these tools, who are you to tell us not to utilise them?"

Past now you should know the answer, but I would certainly question the part virtually you lot "knowing a guy" making millions. Does he also have a signal service? Information technology was a lucky guess.

Regardless of these foolish petty nitpicks, my main response to all of this is pretty directly-frontwards.

The Smoking Gun

If you think past now I have exhausted my ability to proceed and on virtually this stuff, think again. But it's time to wrap all of this up in a dainty little bow.

Regardless of your opinion on old tools vs new ones, yous merely do not have a valid argument against the NNFX approach to technical analysis until you lot have adequately tested both methods out to see which one gives y'all the best results.

Saying one affair works better than the other, fifty-fifty though you've but tried one of them, is all kinds of ridiculous.

I take a childhood friend dorsum where I grew up who never wants to go anywhere or do anything. Years agone, I invited him to come out west so we could drive to California and spend the week at that place.

His response was "I don't like the people in California. Too fake."

My response was "But y'all've never been. How would you know?"

Most Californians I meet are intellectually curious, vibrant, outgoing, awesome people despite the goofy stereotypes, and I recall my friend would agree. But he'll never get to find out. Seriously, that guy is going to have a lot of regrets on his deathbed when the time comes. He'south been to a total of 3 The states states and 0 foreign countries.

Just like my friend, the people who want to poo-poo something they've never experienced themselves are either too lazy or scared to try annihilation new, and this is a mistake you just cannot afford to make.

If you don't like this method, or yous don't like me, or y'all take felt like you've sunk way too much time and effort into what you have, just understand one matter.

The penalization for non testing i against the other is a lifetime knowing that the right reply was probably out there, only you somehow couldn't allow yourself to at least try it.

I do get the occasional "I tried information technology and it didn't work" comment from a guy who merely found the aqueduct three months prior. And then funny. Three months isn't even enough to do a proper forrard examination on one algorithm, much less the research time involved prior.

And this is why the naysayers don't bother me. I know I'm dealing with people who lack the base level ambition to effort both, and the os-headedness to tell me i is better than the other, even though they've clearly only done things i fashion their whole lives. These people are not worth my time nor anyone else's.

I only don't want people new to the aqueduct to think this reasoning is valid, so I take to step in sometimes. Newer traders are very impressionable.

As they progress through the fabric, they'll learn all of this on their ain, I simply desire to make sure these silly objections don't prevent them from doing then. A lot of times people are timid when it comes to trying new things, and are just looking for a way out.

Well, What Is This Method You Speak Of?

Sooooo, you want me to explain it in one paragraph or something? It's not that simple. This is a three-6 trillion dollar a 24-hour interval market place don't forget. The process cannot be written on a dinner napkin.

Just go to this site's homepage and practise what it says if you're interested.

Information technology requires yous to search out your own indicators, put them together, and do a lot of testing to determine the best entries and exits.

We also spend more than fourth dimension on money management and trade psychology than any other site does as well, since those concepts are fifty-fifty more important to your success.

Putting it all together is where the magic happens. But a lot of this isn't even a possibility until I become some of the one-time toxic sludge out of your thinking showtime, hence the need for the negative stuff.

Simply be set to put in some time. If this is also large of an inquire, and so yous're probably meliorate off not trading this market at all. Seriously, the ones who put in the piece of work, and put information technology in the correct places, are the ones who get to defy the odds and make a living out of this.

Conclusion

Damn, I didn't even talk about the daily chart and how neat that is! Only I've written plenty about it in the past, and no need to write more at this point.

Thanks for reading this long-ass blog mail service. Many of you already know our opinion on these concepts already. It's never a bad thing to reaffirm them from time to fourth dimension.

I was self nearly my technical analysis before I started No Nonsense Forex, and I have but gotten cockier as I've seen so many of y'all discover this new and highly advantageous mode to charting, and are using it to live out your Forex dreams.

We up our odds hither. We sympathize the supreme importance of money management and trading psychology, but we bolster it with technical analysis which takes advantage of mod technology, gives us definitive signals, and a organisation we can thoroughly test earlier nosotros use it in existent fourth dimension.

If you have a trouble with it, don't worry — we already know why.

— VP

Source: https://nononsenseforex.com/indicators/forex-technical-analysis/

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