Many traders fantasize about a trading system or technical indicator that can capture every zig and zag in the market. A very intoxicating thought, but sorry to be the bearer of bad news, it just isn’t so. Please don’t shoot the messenger!
Despite all the marketing hype all over the internet, no one system or indicator can do it all.
Have you ever tried to tune-up your car? Well if you did, you certainly didn’t use just one tool. Depending on the car, it took a whole bunch of specialized tools to get the job done. Not only that, you also need to know how to use the tools and when to use them.
Trying to pull profits out of any market on a regular basis is the same way. It requires a lot of specialized tools and for most traders, technical analysis provides our palette of tools.
Since the market can zig and zag at any time, we need a “Trading Tool Box” full of technical analysis tools.
For example, when the market is in a trading range, then oscillating indicators work very well.
However, when the market is trending strongly then oscillators aren’t worth a pile of beans. When the market is trending then things like moving averages are one of the ‘tools of choice”.
Getting back to the car analogy
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