Many people use indicators to give them buy and sell signals. Some may even go as far as buying software that gives them green-light/red-light trading indicators (does anyone remember Wizetrade?). Buying this crap will NOT make you a consistently profitable trader!

Successful traders use their indicators, price action, and an open-minded vision of the market to successfully enter, manage and exit trades. For example, if your indicators are showing bearish divergence and heading into resistence, but you know the longer term direction is up, you may want to stay out of shorts. Alternatively, if you know the retracement down could run for 3-5 points, it may be worth giving it a shot.

I’ve had people argue “theory” until they were blue in the face. For example, some may say that MACD is a lagging indicator, or that the exact Fibonacci levels don’t always work. So what!? Folks, trading is not about being right 100% of the time. The key to trading, and I’ve said this time and time again, is finding a trading structure that works for you! If all you take is 1 or 2 trades that prove to be consistent winners, you are a master trader.

Filed under: Trading by Chris Dunn