Oliver Velez says at one point, you can start to trade without any indicators. So, sometimes I look at charts without any indictors to practice seeing charts without any indicators. (Even though I don't trade without indicators for now.) What I find funny is, after spending months looking at hundreds of charts for hundreds of hours with indicators, I can almost "paint" moving averages and momentum oscillators in my head when looking at a chart with no indicators. And I already know what's implied by the movements (given the strengths and weaknesses of both types of indicators). LOL Of course, Oliver Velez says you can look at relative lows and highs to determine trend and enter a trade once the price surpasses the last candlestick after a series of 3 to 5 red or green candlesticks. When I lost my job at Titletrading, the manager spoke to me like you know, it's one thing to look at technical analysis but you should use your intuition. Well, when the existing home sales came out worse than expected, I started wondering whether I should exit a long position in the EUR/JPY. The stock market started diving but the EUR/JPY was trading sideways. I figured if the stock market keeps going down or stays down, the EUR/JPY would likely start going down (I've noticed somewhat of a correlation between the EUR/JPY and the S&P 500). So, I ended up getting out at what was the top of the range which was 134.13 (before it had a temporary breakout which only went to 134.27). Anyway, I was kind of temporarily unhappy about the trade thinking I did not keep my "trading discipline" and stick to my the profit target. But, my profit target was never hit and ended up hitting what had been my stop loss. I was concerned if I didn't keep my trading discipline, I would start to develop bad habits especially since this was my first trade in several months (after developing new methods). But, I guess in some ways maybe it's like they say, you need to know the rules and when to break them.
Your trading discipline dictates you hold through numbers like housing? No shame in taking it off around a number IMO, esp if your target is not based on news getting you there, which often throws a monkey wrench into support, resistance, and trends with little predictability.
You can trade without Indicators for Day trading. But when it comes to Swing trading you need a little bit more. But since you ask for day trading, my system is mostly based on support and resistance. To illustrate. I will trade gold this week, and i will focus on one stock. So let's go with ABX! I will use a time frame of 233ticks with a 200 moving avg. I will also have the gold contracts future with the same set up. The dollar index future at a time interval of 15 or 5 minutes with a 200 moving avg, and the gold sector. Which for this i will use GDX at the same style of ABX! With a set up like this, it makes it easier to just rely on the trend, counter trend, momentum, support & resistance and focus on the tape. So if you ask, is it possible to trade without so much indicators for day trading? yes it's possible. But you have to focus a lot in the tape, the movement, and the time frame. But If you don't know how to read the tape, then don't bother. Learn to read it first! Learning to read the tape, is what enhances your ability to trade better with out so much indicators! This is just for me. Everyone has their set up. It takes time to realize what works, and what don't work. But you will learn this after you have lost so many times!
realistic indicator analogy. two cars approach while you stand on the street corner. rainy, foggy, dark night. road has many turns and curves, new construction zones too. visibility is poor. road is not straight. one driver has an up to date gps unit and fog lights. other driver only has headlights and white lines on the road to follow. which car is more likely to jump the curb and run you over?
I'll add (as a newbie who is still in the early stages of learning) that it seems like indicators could end up being a big distraction where you end up focusing and relying on them for guidance and neglecting the price action itself, divorcing your self from the thing that actually determines your profit/loss. You don't make money by buying when oscillator A crosses and selling when squiggly line B moves down, you make money buy buying cheaper than you sell. It's like watching the weather channel to determine whether it's raining outside at the moment instead of sticking you head out the window and finding out for yourself.
ten years from now youll look back, realize price action and correct chart tools are 50-50 halves of whole. Neither stands alone without headfakes and false reads. Together they are one pro golfers bag has more than driver and putter. veteran carpenter has more than hammer and regular screw driver. for good reasons
Most likely, I'd guess the one watching his GPS (indicators) instead of watching where he's going. The other poor bastard has no choice but to concentrate on the white lines on the road (simple price action) and adapt to whatever twists and turns arise.
Pro Golfers and Veteran Carpenters can accomplish superior results regardless of what tools you give them. Itâs not the tools. Itâs knowing what has to be done to achieve the desired results