In order to consistently profit in the Forex market you need a trading method allows you take advantage of ever-changing market conditions. Whether range bound or trending, the Forex market is a dynamic and sometimes volatile market to trade. If your method to trade this market mainly involves indicators such as stochastics, MACD, RSI, or any host of others you are probably putting yourself in the worst position possible to take advantage of Forex price movement.
The problem with such lagging indicators is that they react with latency to price movement; meaning after a movement has setup and moved a substantial amount then the lagging indicator will give you a signal to enter. Often times these indicators give a signal to enter long just as the market is about to correct to the downside, or vice versa. When you trade the Forex market using pure price action strategies there is no latency, either the price setup is there or it is not. There are a handful of great price action patterns that can tip you off to impending Forex price movements as they happen, not a substantial amount of time after the move has started.
Another problem with most trading methods is that they require the trader to cloud up his or her chart with a bunch of fancy indicators that do nothing more than give you a visual representation of what has already occurred in the market. The ironic part here is that everything you need to know about price movements in the Forex market is already reflected on a naked price chart via price action analysis. All indicators do is cover up this raw price data and make it more difficult to discern. However, because most traders have a false belief that trading is inherently difficult and should be technically complicated, many of them fall into the trap of using lagging indicators and over-analysis.
Trading using price action analysis is much more conducive to the relaxed and objective mindset that is required to prosper in the Forex market than any other method you will find. This is because when your method is adaptable to all market conditions and makes logical sense within the context of the market there is no second guessing your self before you enter or spending large amounts of time over analyzing numerous lagging indicators.
Trading forex with price action strategies allows you to trade on any time frame you want, and even becomes more accurate the higher up in time frame you go which allows you to spend as little as 20 – 30 minutes a day looking over your daily Forex charts for price action setups. Many people get into trading because they want more freedom or are just tired of the daily grind and working for someone else. Often these same aspiring traders lose sight of their original intentions and allow their trading to control them and forget that part of the allure of Forex trading is that it allows you to spend minimal time analyzing charts while providing for maximal personal time. Price action analysis rewards the trader who is disciplined in their approach and does not over trade, it is entirely possible to use this extremely adaptable method and make a full time living trading off daily and weekly charts alone, thus freeing you from the daily rat race and giving you the best gift of all; time.