John Templeton, who has been trading foreign exchange for over six months and who is the creator Trade Buff the forex system soon discovered that all the sophisticated methods that traders used to select a winning currency trade only clouded the field for it. “I was basically just an inanimate object waiting to cross random lines, telling me I needed to open or close a trade. Then it became clear. How in the world could I make money trading forex if I didn’t even understand what I’m looking at? “
This is when John decided to take the bull by the horns and figure it out himself. You no longer need to buy this or that forex theory. He started by listening to what all professional traders would say on the subject. And more than any other phrase that came out of their mouths, was the phrase “price action”. John was so stunned by himself that he could knock himself down. “It was so obvious I couldn’t believe it.”
When it comes to forex trading, John realized that a trader had to make a decision between two ways of analyzing a trade: either through fundamental analysis or through technical analysis. Fundamental analysis takes into account all the psychological underpinnings that may affect the movement of currency in the market. Things like the effect that non-agricultural wage numbers that are issued once a month can have, or how raising or lowering interest rates can affect a given currency pair.
When it comes to using technical analysis, this type of trader thinks that opening an indicator menu on their graphical platform will somehow tell them which currency pairs to trade based on how the indicators are read. From John’s perspective, these traders think that – rather than understanding price movements – the following charts, filled with lagging indicators such as RSI, MACD and stochastics, will lead them to the right trade. After many years of losing trades by the same formula, John is convinced that following this path is a loss-making cause.
The only technical indicator that most unsuccessful modern traders no need use is an action on price. They are all waiting for all their other indicators to line up. For this type of traders, only what their static indicators show is important, and the price becomes secondary or even irrelevant. The only bad thing about using such lagging indicators is that they don’t give the trader a clear picture of what the market really is. does during a given trading period.
For example, when you train yourself to look for a level of support and resistance, you see real statistics that affect market movement. No indicator of lag will ever give you such information that will be stored for a very long time. You should be able to see this directly from the market itself. This is what John is trying to kill home in his forex trading program Trade Buff.
The name of his program refers to the loss of indicators-based strategies and a return to the basic indication of price action. In other words, trading is a plus, without the use of theoretical window dressing, which is taught to many of the traders. Theories sound good, but they don’t always work. In short, what John learned himself by trading buffs was that more and more of his trades became successful when he based them on price action.