| A Serious Look At Tom Strignanos Forward Forex Indicators |
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| Written by Edward Lomax |
| Friday, 07 May 2010 20:54 |
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Most Forex traders are taught to trade Forex the same way... with a trading system that uses the free indicators that comes with most trading platforms. When you look at a trading chart, it is usually full of squiggly lines, colors, arrows and waves. And can you really make decisions with so many conflicting indicators? Come on, don't lie... your chart is full of these indicators right now, aren't they?
Most Forex traders are taught to trade Forex the same way... with a trading system that uses the free indicators that comes with most trading platforms. When you look at a trading chart, it is usually full of squiggly lines, colors, arrows and waves. And can you really make decisions with so many conflicting indicators? Come on, don't lie... your chart is full of these indicators right now, aren't they? I'll be the first to admit... I tried many an indicator. Like many of you, I thought I could come up with some magic combination that would make Forex trading simple. But the problem is, all these indicators are lagging indicators. Lagging indicators are really good at telling you what price did in the past. But Tom Strignanos opened my eyes to using FORWARD Forex indicators. Here is some of what Tom taught me... #1 Get Rid Of All Your Lagging Indicators Tom Strignano makes it clear he is no fan of "public" indicators. They are "public" indicators because they come with just about every trading platform. (Your chart is probably full of them right now... Moving Averages, MACD, Stochastics, etc.). The basic reason Tom hates these indicators is because they are LAGGING indicators. A lagging indicator is good at telling you what price has done in the past... but not necessarily accurate at helping you predict what is going to happen in the future. And since past movement does not guarantee price will move in the same direction, these indicators are worthless. And I know, this might be a tough pill for some of you to swallow. Tom Strignano believes success in Forex comes more from reading PRICE ACTION than anything an indicator can tell you.Price Action, or what price is doing right now, is the best way to look at the market. And through some proprietary calculations, Tom can figure out where price is likely to go. And focusing on these forward indicators is what sets you apart from other traders. (You know? The ones losing money!) #2 Start Using Forward Indicators Let's talk a little more about forward indicators... Forward indicators are levels where price is most likely to go. They give you a clue as to where price is being drawn to, or will possibly be rejected from. Do you think you would be a better Forex trader basing your trading decisions off this valuable information? You might already be using some of these forward indicators like pivot points or support & resistance levels. But the difference with the levels you are probably used to and the ones Tom uses is that his are calculated from a proprietary formula he created while working as a Bank Trader. His levels look at levels the Banks look at, which is the most important levels if you what to know what the big boys are doing. #2A Market Exhaustion Points This is another calculation Tom comes up with. These levels you should watch closely because price could lose momentum and stall. Make sure to pay attention to what price does at these areas. If price starts to stall, you might want to exit the trade, move your stop loss up, take partial profit, etc. But the point is, without these calculations... you wouldn't know you were supposed to pay attention. How many time have you placed a trade only to see momentum die out shortly after? You probably just traded into one of these exhaustion levels. Wouldn't your trading be better if you knew these levels in advance? You see... using forward indicators can help you make better trading decisions. #2B Trend Reactionary Numbers (TRN) Trend Reactionary Numbers are the most important price levels Tom calculates. If price approaches one of these levels and bounces off... you can be pretty sure it is heading for the Trend Reactionary Number below. If price breaks through and stays above... you can be pretty sure price is going to move to the next one. These major targets can tell you where price is most likely to go... hundreds of pips in advance! When you see these TRN's on your chart, and how price reacts to them, you are going to be amazed. In conclusion... The point is, if you want to make consistent profits as a Forex trader, you need to start looking at the market like a professional trader. This means making important decisions at key areas the big institutions look at and react to. Other traders are using their lagging indicators to make decisions off what price has done in the past... and as a result, make poor trading decisions. What I learned from Tom Strignano is you need to use forward indicators to plan your trades and make decisions based on what price action does at these areas. Successful traders don't look into the past, they look forward and therefore make higher profits. This is why I stripped my charts of unnecessary lagging indicators. They are now much cleaner and easier to read price action. Now they just have forward indicators as to where price might go... which has effectively become a map to higher profits. In the end, naked charts win. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. Looking to find the best price action forextrading systems, then you need to check out Strignano Forex Trading |