Forex Crunch Indicators – 3 Reasons Why They Will Hurt Your Trading

Indicators – 3 Reasons Why They Will Hurt Your Trading

Posted: 11 Jun 2010 12:31 AM PDT

Guest post by Jason Madison of beatwallstreetnow.com

Indicators are widely used by traders, but just because something is widely used doesn’t that mean it’s good. In fact given that 95% of traders fail it’s probably best to stay away from the herd unless you want to end up in the slaughterhouse. So, here are the top 3 reasons why using indicators will lead to your trading demise.

1. You will lose because it lags.

So the whole point of indicators is to forecast what price is going to do so that you can open a trade and profit, but it’s pretty hard to do that when you get in on the move too late and that’s what happens when you rely on indicators to make your trading decisions. Indicators don’t forecast price movements like people like to think they do, but rather they only give signals after movements have occurred. This will cause you to enter the market too late to profit.

2. You will lose because real traders don’t use it.

Do you think the world’s elite traders are sitting around waiting for indicators to tell them to take a trade? Well let me tell you they most certainly are not. You see they know that indicators lag and because of that they don’t use them. You have to realize that these are the people you are up against and if they are getting into to the market while you’re sitting on the sidelines then they are going to beat you every time.

3. You will lose as long as you continue to use indicators as a crutch.

If you want to become a successful trader then you need to stop relying on indicators and learn to read the price action for yourself. Once you learn how to analyze what price is doing in real time your trading will improve dramatically. Instead of waiting for an indicator to get you in late you can learn to read the price action so that you can get in quickly and profit.

Relying on indicators will only hurt your trading. If you want to become a successful trader that is able to profit at will then you need to understand price action.

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Forex Daily Outlook – June 11 2010

Posted: 10 Jun 2010 02:00 PM PDT

US Core Retail Sales, Retail Sales and Preliminary UoM Consumer Sentiment are the main events today. Let’s see what’s on the menu at present:

In the US, Core Retail Sales and Retail Sales are expected to show a decline in the US economy; Core Retail Sales, from 4.0% to 1.0% and Retail Sales, from 0.4% to 0.2%.

Later in the US, Preliminary UoM Consumer Sentiment is climbing up again to 74.7 points which is 1.1 points higher than the previous month. This continuous rise will have a positive effect on the market. More from UoM , The Preliminary UoM Inflation Expectations is likely to remain around 3.2%.

More in the US, Business Inventories released monthly, measuring the change in the total value of goods held in inventory by manufacturers, wholesalers, and retailers is expected to rise by 0.2% reaching 0.6%.

In Canada, Capacity Utilization Rate is expected to continue its rise reaching 73.4% which may indicate rising inflation rates.

For more on USD/CAD, read the Canadian dollar forecast.

In Europe, German Wholesale Price Index is predicted to drop from 1.7% to 0.3% although forecast in previous months also tended to be lower than the actual result.

Also in Europe, French CPI is foreseen a decrease 0.1% from 0.3% in May.

For more on the Euro, read the EUR/USD forecast and Casey Stubbs' latest analysis.

In Great Britain, Manufacturing Production is expected to decrease by 1.7% from 2.3% in May indicating lower inflation rates.

More in Great Britain, Producer Price Index Input is foreseen to plunge from 0.6% to -0.9% as well as UK PPI Output suspected to decrease by 0.8% from 1.4% in May.

Finally in Britain, Consumer Inflation Expectation will probably remain unchanged reaching 2.5% and Industrial Production is intended to rise by 0.3% to attain 0.5%.

Read more about the Pound in the GBP/USD forecast.

That’s it for today. Happy forex trading!

Want to see what other traders are doing in real accounts? Check out Currensee. It's free.