The Authority’ on Price Action Trading. In 2016, Nial won the Million Dollar Trader Competition. Essentially, when traders use indicators to make their trading decisions, they are getting a distorted view of what a market is doing. So, essentially, the only real use that forex macd indicator explained in detail indicators have is in helping to identify a trending market, and I do actually use certain moving averages to aid in trend identification.
The problem is that no one ever knows how long a market will trend for, so you are going to have a ton of false signals before the actual top or bottom of the market occurs. Let’s take a look at the way many traders try to trade with lagging and leading indicators all over their charts, and then let’s compare this to trading with nothing but a plain vanilla price chart and price action. MACD, Parabolic SAR, and a few moving averages. You can quickly see just by looking at this chart how confusing it is, and you can also see that there are a lot of unnecessary variables on this chart.
Now let’s look at the same chart with no indicators at all, there is nothing but pure price action and a couple of horizontal lines drawn in to show significant support and resistance levels. It’s obvious this chart has less clutter and less confusion, all it shows is the natural price movement in the EURUSD. By learning to read this natural price movement and the conditions it occurs in, we can trade in a very simple yet effective manner. It is also worth noting that due to the fact that there are no indicators underneath the price, like the MACD and Stochastic in the above chart, you have a completely uninhibited view of price which allows for a less distorted and larger view of the price action than if you had multiple indicators taking up the bottom portion of your screen as can be seen in the chart above.