{"id":22044,"date":"2012-11-16T09:19:10","date_gmt":"2012-11-16T14:19:10","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=22044"},"modified":"2023-04-03T13:12:13","modified_gmt":"2023-04-03T17:12:13","slug":"forex-its-organic","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/forex-its-organic","title":{"rendered":"Forex: It\u2019s Organic!"},"content":{"rendered":"

Ever hear the statement, \u201cThe forex market is very technical.\u201d Or how about this one, \u201cTechnical
\nanalysis works really well in the forex market because it\u2019s more technical than anything.\u201d
\nUsually statements like these come from promoters of indicators or systems that rely on some
\ncombination of special oscillators or other proprietary formulas. For someone who is just starting
\nout in forex trading, what do you think these statements imply? These statements mislead new
\ntraders into thinking the indicators on your chart offer some kind of unique advantage.
\nNew traders love indicators. These include Bollinger bands, moving averages, stochastics, and
\nso on. I\u2019m sure you can name a few. They love them so much that they like to jump from one to
\nanother or even better, put them all on their screen at the same time. You know what they say
\n\u201cmore is better!\u201d right? For some reason though, these same traders never seem to get those big
\nmarket moves they are looking for, or even worse just enter the market at the wrong time more
\noften than not. Time to find another indicator!
\nActually here is a better idea: Remove them all from your charts. You may or may not have
\nheard that all oscillators are lagging in nature. They were created to smooth out price action and
\noffer some kind of perspective on the recent history of price. For example if you are looking at a
\n14 period RSI, that means you are looking at a value generated from the closing prices of the
\nprevious 14 bars. Is this information useful? It can be, but even after knowing the intricate
\nnuances, none of these tools offer any kind of advantage in the market.
\nOn a more subtle note, these indicators send unknowing traders the message that price is
\nreacting to the movement of the oscillator. The newer trader starts out believing that prices are
\nsome kind of mechanical entity that automatically responds to lines, circles and other geometric
\nshapes on a chart. This implies exactness. Think about how such concepts can misguide your
\nexpectations of price action in the immediate future.
\nSaying the market is exact is like saying the wind is exact. In reality, market prices are nothing
\nmore than the reflection of the sentiment of a very large group of participants. Price is driven by
\nforces of greed and fear which are emotions that are found in nature. Why is it so important to
\nmake such a distinction? So that you accept that the movement of prices of any instrument is
\norganic in nature and far from exact. Price are messy and very random much of the time. If the
\nmarket was not so random, we can do things like place limit orders on pivot points and make
\nmoney every time.
\nIf you are having a tough time in the market and relying on the mechanics of indicators and other
\nsuch tools that measure price over time, take a step back and learn to appreciate prices for their
\norganic behavior. Take the oscillators off your chart and use a larger time frame peak or valley
\nto judge where your next turning point may emerge in the future. This is where price action
\nanalysis begins.<\/p>\n

Marc Principato, CMT<\/p>\n

\"\"<\/a><\/p>\n

Risk Disclaimer<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Ever hear the statement, \u201cThe forex market is very technical.\u201d Or how about this one, \u201cTechnical analysis works really well in the forex market because it\u2019s more technical than anything.\u201d Usually statements like these come from promoters of indicators or systems that rely on some combination of special oscillators or other proprietary formulas. For someone who is just starting out … Read More<\/a><\/p>\n","protected":false},"author":1030,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[1390,2092,2087,2216,56,18,2217,653,38,4690],"class_list":["post-22044","post","type-post","status-publish","format-standard","hentry","category-general-comments-2","tag-forex","tag-forex-training","tag-indicators","tag-organic","tag-smb","tag-smb-capital","tag-technical-indicators","tag-trader-training","tag-trading","tag-trading-education","no-post-thumbnail"],"yoast_head":"\nForex: It\u2019s Organic! | SMB Training<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.smbtraining.com\/blog\/forex-its-organic\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Forex: It\u2019s Organic! | SMB Training\" \/>\n<meta property=\"og:description\" content=\"Ever hear the statement, \u201cThe forex market is very technical.\u201d Or how about this one, \u201cTechnical analysis works really well in the forex market because it\u2019s more technical than anything.\u201d Usually statements like these come from promoters of indicators or systems that rely on some combination of special oscillators or other proprietary formulas. For someone who is just starting out ... 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