This is the beginner trader cycle that most traders start out with when they first enter the forex market, or begin trading any financial market.
The Beginner trader enters the world of tech indicators and chart patterns.
Stage 1: Technical Indicators, Stochastics, MACD, Moving Averages, RSI, etc
Stage 2: Try finding divergence with the technical indicators. Try using multiple technical indicators together. Clutter their charts. When that fails they go to stage 3.
Stage 3: Find the next great technical indicator – aka the search for the holy grail
Stage 4: When the next great technical indicator fails they go to find new expert advisors aka forex robots
Stage 5: Pile on even more clutter on their charts. Try even more technical indicators that they never used before. Anything they can find like Bollinger Bands, Keltner Channels, Fibs, Pivot Levels, momentum, etc.
Stage 6: Try even more technical indicators. Use Elliot Waves, ADX, Linear Regressions, Parabolic SAR, etc
Stage 7: They try to tweak the settings on their technical indicators to see if that works. They can also try using the technical indicators on multiple time frames to see if that increases the probabilities of the trade.
At this point the trader starts the viscious cycle over again and keeps on trying to find success using technical indicators. The beginner trader jumps around from system to system on various trading forums, never building any solid foundation for trading success.
This whole process can be very frustrating as the beginner trader cannot find consistency and it becomes very difficult to break out of the cycle. Many traders quit at some point in this cycle. I went through this cycle for over one year.
Of the ones that do survive, many of them enter the price action trading cycle.
Want to leapfrog over the trading competition and become an Order Flow Trader? Click Here for the Order Flow Mastery Course.
Click Here To Get The Free Report
loading...