Today I want to use a simple metaphor to explain in a clear and intuitive way the reason why it is better not to use indicators in the graphics used to trade the Forex and the reason that has made me understand that nothing is more efficacious than a graphic that in jargon we define “naked”. That is, without all those toys many traders like playing with: rolling averages, CCI, Stochastic, Fibonacci, etc.
Mind you, I do not want to say that the “naked” graphic is a necessary but not sufficient condition for profit in trading, quite the contrary. I know many traders that have excellent results through systems completely different from mine, which transform the display of their metatrader into an IKEA Christmas tree, and if you ask them about the price they don’t even know. Yet they make profit and so they are right too.
I am a relativist, and I respect all those who use strategies different from mine, and in this article I just want to tell you the reason why I find it extremely easier and natural to do trading “ revealing” the price more than “hiding” it.
So, let’s start from a fundamental assumption: Price is a language, a true and real language.
Yes, just like Italian, English or French. It has its grammar rules, syntax and hard- to- remember words.
In order to learn how to do successful trading, you must learn how to speak the language of Price. How? Just as you would with all the other languages.
You must learn the fundamental rules of grammar, you must learn to listen with humility and then, possibly, move to the country where that language is spoken. This means that you need to study the reiterated patterns, the probabilities associated with these patterns and then…observe. Observe with the innocent eye of a child. It’s not just a case that children learn languages ten times easier than adults. Why? Because they are innocent, because they have no expectations, because they are pure.
Once you have learned the fundamental rules and you have moved to the country where that language is spoken – the language of Price- start making conversation. That is, move your first steps with the only instrument you have: trendlines.
Trendlines are the equivalent of words for a language. They are the bricks making up each sentence, each pattern, and each channel. Initially, your words will sound stiff, and you will not pronounce them well. Your trendlines will be traced badly, with the wrong inclinations, connecting the wrong points, but slowly, and if you are constant, they will become more and more refined and, like magic, one day you will discover yourself speaking the language of Price fluently.
It happens as if you have moved abroad and you understand you have learned a new language when you start dreaming in that language.
Nobody tells you these things. Why? Because in order to learn a language you need time, passion and will. On the contrary, you don’t need that long to learn how to use gimcrack Google Translate.
Right. In my point of view, indicators are just like an automatic translator: the way to understand something in a foreign language through a poor quality shortcut.
Mind you, indicators can also be good indicators. We can have excellent simultaneous translators, but the result will always be lower than direct comprehension, and mostly delayed. In a world where speed is everything, such as trading, you understand that the faster you are, the more profit you’ll make.
It is something that has to do with the usual universal law: the more you give, the more you gain. The longer you devote to the language of Price, the more benefits you’ll have on your Forex account. The lazier you are, and therefore the more you trust on indicators, the slower you’ll be. Nothing is free in this world; let’s bear this in mind.
I too have lived the inglorious times when I could not sleep at night because I was far too excited, because I believed having found on a Forex forum the magic indicator capable of changing my life and earning without working. Out of experience, I know that there is just a small number of traders overcoming that phase. Let’s call it in this way: the teen years of a trader’s career.
Listen to my advice: if you want to overcome puberty, unveil your graphics, and start reading what’s underneath them. You will discover incredible, disarmingly beautiful things. Shall we exaggerate? Let’s do it! Not only Price is a language for me, but it is also a poetic language! Its repetitions are just like rhymes for me. Under a careful eye nothing happens randomly in a graphic, just like in the Divine Comedy. Dante’s masterpiece can be read in many ways, and can be read by students and intellectuals too. Anyone will be able to enjoy it according to his or her level of education. The more cultivated you are, the more you will discover new and incredible things, and for those who believe in it, even hidden messages.
Do not miss all this, do not be satisfied with a sterile and slow automatic translation: learn the Price of Language and you will never be the same after.
See you all at the next wave,
Davide Franceschini | Chief Trader