Big Mike's Trading Blog

Day trading futures, discussing money management and trade management techniques, and more

Indicators are not the answer

The majority of people in the forum will not agree with what I am about to say. Does this make them wrong? My answer is both a yes, and a no.

Yes, I think they are wrong if they disagree. Am I entitled to my opinion? Sure, and I also respect people that disagree with me. But, I also believe what I am saying to be absolutely true, and I think if you disagree with me, and you think indicators are the answer, then you are wrong.

But -- also a "no", because if you had come to me years ago and beat me over the head nonstop and tried your best with nothing but the best intentions to shove this information down my throat, it would not have worked. I would not have listened. I may have even agreed with you, I may have tried to copy you, but in the end I would not have listened. Maybe my lack of listening was not my intent, but it is what would have happened.

Human beings need to learn for themselves. Copying only gets us so far, we must do it for ourselves to truly understand it and appreciate it. It is the experience that counts more than anything else. And by that is my final answer, which is that people are not right or wrong in a black or white kind of way. There is a lot of gray.

Let me put this another way. How many of you have "learned your lessons" when it comes to debt, like credit card debt. Ok, how many of you tried your best to instill this into your children, your friends, and family members -- to please, please not repeat your mistakes but learn from them. Ok, how many learned vs. how many went right on and made all the same mistakes you did. Now, I hope you see my point.

  • Indicators are not the answer.
  • Indicators are not the solution.
  • Indicators are not the holy grail.
  • Indicators are not the reason you lose money.
  • Indicators are not the reason you make money.
  • Indicators are not why you got stopped out.
  • Indicators are not why you hit your target.
  • Indicators are not what told you to enter a trade.
  • Indicators are not what told you to exit a trade.
  • Indicators are not the answer.
Don't believe me? Disagree with me? No problem. Trading is not being right or wrong. Trading is about developing your own method, your own "system". And more than anything else, trading is about knowing yourself.

So if indicators are not all of these things, then what is?

  • You are the answer.
  • You are the solution.
  • You are the holy grail.
  • You are the reason you lose money.
  • You are the reason you make money.
  • You are why you got stopped out.
  • You are why you hit your target.
  • You are what told you to enter a trade.
  • You are what told you to exit a trade.
  • You are the answer.
Does this make sense to you? Does it kind of make sense? Does it make no sense at all? Do you believe it, do you question it? Are you having an "ah-ha!" moment, are you cursing my name?

The point I am trying to reveal to you is that you are controlling what is happening, not an indicator.

Are indicators valuable? Do I use indicators? Do professional floor traders who make millions of dollars a day use indicators? Yes. But the indicators are being used only as a small supplement to you -- your mind -- and that is what is so difficult to learn. Indicators can be useful, but only when used in the right context and by the right person with the right experience.

If you are questioning whether or not you are the right person with the right experience to be able to use indicators to help your trading, and not hurt it -- then the answer is no, you aren't. You will know it when you are. It will be one of the greatest moments of your entire trading career when you realize this, everything will change, everything will be so clear.

Mike

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