The first time I got into Forex, I was introduced to several trading indicators. The first was Moving Average, and as I learned more about trading and where the indicator window is, I came across Ichimoku Kinko Hyo. I read a lot about Ichimoku and began implementing it in my trading because it was easy to use. That was in 2020.

However, as countries were imposing lockdowns, the indicator started to behave weirdly, and it wasn’t working anymore. Most of my entries resulted in losses. I was disappointed. I failed to understand how within a short period of making profits, I was now losing. That is when I moved away from trading indicators.

From there, I put my effort into studying the market and how trades behave, and over time, learned how to trade without trading indicators.

As I gained more insight into trading without indicators, I later uncovered why all of a sudden Ichimoku Kinko Hyo was failing me and how all indicators fail traders.

Trading indicators don’t tell where a trend will change or continue

Let’s look at the post below.

Questions like these are common in most Forex groups. The trader didn’t see where the trend changed and is now wondering what happened.

During my study of the market and trades, I learned that trades change or open a new trend/direction during market opening or closing. In fact, the 15th-minute candle to and after the market opens/closes is very crucial for identifying what a trade will do next. A trade may make a pullback or continue with the trend.

The size of the pullback may differ. We can have a small or big pullback. However, they may communicate a change in trade direction. This is something that an indicator won’t show you.

Trading trick: Armed with this info, I usually exit all my positions 15 minutes before market opening/closing. Then I can come back and re-attack the trade 30 minutes after market opening/closing if I see a pullback or trend continuation.

Trading indicators don’t tell you what to do during new releases

High-impact news releases create a lot of volatility in the market. It is hard to tell whether the breakout or pullback that the trade does is real or fake. This is where most indicators will fail you as they can’t tell you what direction to take.

Some traders say you wait five minutes before you enter a position and others 15 minutes. However, most argue that one should take a position as per what the news says—that is if it is positive you sell, and if negative you buy.

Such judgments may lead to serious losses because with every news release, the market shows different behavior.

Trading trick: Wait 30-60 minutes after the news release and after that, you will know what direction the trade will take. Take care if a market opening/closing is approaching as the trade may change direction in the next 15 minutes to and after the market opens/closes.

Here’s an example of what I am trying to tell you in the 15 min, 30 min, & 1 hr chart. This was during a CPI news release.

As you can see, the trade went bullish when the news was released a few minutes after the NY open. 30 minutes later, there was a massive pullback, and 15 minutes to Frankfurt close, it again changed direction, continuing with the bullish trend.

Trading indicators can’t tell fakeouts

When the market or trade is consolidating, the market sometimes presents fakeouts. If you are using a trend indicator you might not see a fakeout and rather enter into a position and then end up losing when the trade corrects itself. A similar scenario happens when high-impact news is about to be released.

The market may react with fakeouts before and even after the news release. An indicator won’t tell you that these are just fakeouts and that you should not trade them. This is the biggest limitation trading indicators have these days as the number of news releases increases.

Trading indicators can cloud your judgment

I have seen traders with four to five indicators such that when you look at their chart; the indicators are all over the place to the point you can’t see the candlesticks. The problem with using more than one indicator is most times they will present conflicting information, and that is when you gamble by picking one that you think may give the best results, yet this is not how to trade.

The fact that they are all over the place also limits your ability to see clearly what a trade might be doing.

There are only indicators for trend or consolidation, none can do both

The Forex market never moves in a straight line. The market is always oscillating. Today, it is trending, but tomorrow it may be consolidating. Sometimes it may be trending or consolidating for months. Other times it may present lots of fakeouts.

If you have an indicator for trend in a consolidating market, you won’t succeed. That is why you have traders experiencing a losing streak.

I am sure you have heard traders complaining that an indicator or strategy they have been using for several months is no longer working. That is because the market is consolidating or trending and the indicator can’t tell them. So they experience losses from fakeouts.

I know some traders advocate for the use of two indicators—for trend and consolidation but this may lead to more losses as they can present contradicting information and cloud your judgment.

So what should traders do?

Ditch trading indicators. I know this may be absurd as indicators are there to ease the trading process. However, if you want to be in this thing for the long haul, going the indicator route is not ideal. Study the market and how trades behave during news and at market opening and closing.

It takes a lot of experience to successfully trade and profit by not using indicators. The secret to profitable trading without indicators lies in identifying where and at what point a trade will change the trend, open a new trend, or continue with the trend besides distinguishing real vs. fake breakout.

All things considered, trading without indicators is the best way to make it in Forex. I hope you try it if you are contemplating which method is best.