Whenever you think of a typical forex trader, you may well have a picture in your head of someone who sits in front of a computer screen all day staring at charts. That’s because most traders will indeed make all of their trading decisions based primarily on a specific combination of technical indicators that show up on these charts.
However there are a small number of forex traders who are able to generate consistent profits without using any of these fancy indicators. Indeed some of them won’t even have heard of a smoothed stochastic indicator or an ADX indicator, for example.
So if you like the thought of not using having to use any technical indicators, here are the four types of trader that you might want to try to emulate:
1. Price Action Traders
Price action traders will often ignore all of the indicators that are available to them, and instead use nothing other than price action and trendlines to enter and exit trades.
This can be a very effective strategy because candlesticks alone can give you some valuable information about market sentiment, and when you combine this with trendlines that act as natural support and resistance levels, you have a powerful combination.
2. Long Term Fundamental Traders
Another group of traders who don’t concern themselves with what various different indicators are saying are long-term fundamental traders.
These people will often allow a position to unwind over the course of many months, and sometimes many years, and will base their decisions on economic factors concerning various different countries.
So for example, the people who foresaw the devastating impact that sanctions and a falling oil price would have on the Russian Rouble would definitely fall into this category.
3. News Traders
As I have already mentioned on this site, there are a small group of people who are able to make money from trading economic data releases, and you will find that these people don’t tend to use any indicators.
It is all about making split second decisions based on the market reaction to the latest economic announcements, and this group of people has a real gift for interpreting the data and predicting which way the markets will move as a result.
4. Scalpers
The final group of traders who will often trade the currency markets without any indicators are scalpers.
Scalpers will often enter and exit positions within a matter of seconds or minutes, and although they will sometimes make use of indicators, many of them will not use any at all because they may trade candlestick patterns or wait for trendline bounces or price breakouts, for instance.
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