 Welcome back to the Trade Hacker Mindset. In this episode, I want to discuss the topic around, do indicators actually work? Trading the markets can be difficult to master and seemingly just out of reach. Professional traders have a secret. Trading requires total mental and emotional control. It requires the Trade Hacker Mindset. All right, so let's jump into this topic of answering the question, do indicators actually work? Now I have two answers to that question. The first answer is yes, every indicator works. The other answer is none of them work, okay? And here's what I mean by that, is you can take someone who trades based on an indicator and they can be ultra successful. And then you can take someone else who trades on the exact same indicator and they can be a losing trader, why is that? The reality is, is that it all comes down to a couple of things. Number one, it comes down to how you manage the trade, okay? It comes down to your risk versus reward. It comes down to how you manage risk versus how you manage winners. You know, it goes back to the old adage, you know, cut your losses quickly, let your winners run. Well, if you don't do that and that's what the indicator calls to do to be successful, then you're not going to be a profitable trader using that indicator. So, you know, there are so many indicators out there, indicators that are free based on the trading platform or the charting package that you use. There are indicators being sold for thousands of dollars on the internet. And the reality is indicators are just a lagging indication of what price action is doing. You know, so you see these momentum indicators. Well, if you look at just a plain chart, you can see if there's momentum going on, right? You can see if, you know, something is overbought or oversold just by simply looking at the price action, okay? It's what you do with your entries and exits and management of that trade that actually matters, okay? There's a lot of technical analysis scenarios using trend lines, for example. Do trend lines work? Sure, absolutely they work if you have the right strategy and proper money management around those trend lines. Okay, if you don't, they don't work. So, you know, people get this idea that there's something magic about an indicator. But the reality is, you could draw a random line on your chart and it would be just as powerful as any trend line that you can find, okay? And I will argue that till the day I die. Some of you may disagree with me, but try it, okay? Take 100 trades based on a random line that you put on your chart. Take 100 trades based on some guru's magic trend line or price level and you're gonna get the same results. I promise you you're gonna get the same results, okay? Because it all has to do with how you manage the trade around that price level, not the price level itself, okay? So think about this. Now, keep in mind, just to give you a little perspective of where I'm coming from. I'm somebody who has tried probably nearly every indicator out there, okay? Over the 20 plus years that I've been trading. And today, you know, 20 plus years later in my trading, I use very few indicators. Now, one of our programs that we trade with on a directional basis is a trend trading type system. It's called navigation trend trading and it uses some indicators within that system. But here's the key. I use those indicators as simply a different way of looking at price action, okay? There's nothing magic about the red and the green and the uptrend and the downtrend lines that the indicator draws. There's nothing magic about that. What's magic about it is that it automatically, dynamically has a built-in risk versus reward, you know, dynamic indication that creates a favorable risk reward process when you take trades over and over and over. So if you take the trades over and over and over, you are going to have success because it's built in, okay? So I mean, this is something that allowed me to triple my account in the matter of 11 months by just following systematically, you know, the criteria that I set with this system, with this indicator. But I created this indicator and I'm here to tell you it's not magic, okay? There's nothing magic about it. All it is is it's a different way to look at price action and it's a different way to help create a built-in favorable money management into your trading, okay? Here's the other thing about indicators that is a positive. All of our brains process things differently, right? So when one person looks at a candlestick chart, they see something totally different than somebody else who looks at the same candlestick chart, okay? And so what indicators can do is if you find something that your mind gravitates to, that it processes in a way that helps you manage trades in a more successful way, then that indicator is a benefit to you, okay? If your mind takes that indicator and causes you to make trading decisions that are not favorable, then that's not an indicator that you should use, okay? So that's the key, there's just, there's so much BS online. There's so much selling of different indicators based on the wrong foundation of how they should be used that I wanna demystify this whole situation about how to use indicators, okay? You know, it doesn't matter if the RSI is overbought or oversold, okay? You can tell by looking at a price chart if that stock is overbought or oversold. You don't need an RSI to do that, but if that helps your mind process it in a way for you to set your entry and exits and management of that trade in a favorable state, then you should use it. If not, you shouldn't. Personally, I've found that indicators do more harm than good from a standpoint of how they, what they do for me from a standpoint of making trading decisions. Now, here's the other issue I have with the way a lot of people, a lot of traders use indicators is that they tend to use too many, right? I've seen so many people's charts where they are just, they've got eight different indicators with squiggly lines all over the chart, seven indicators below the chart, and what happens here is that it causes conflict because there's a lot of different things going on so that, so when they go to enter a trade, it's kind of paralysis by analysis, right? Either they freeze and they don't make the trade because there's too many things conflicting. Say, well, this is a bullish sign, but this is a bearish sign, so I don't, yeah, I don't know what to do, so I'm just gonna do nothing. I'm gonna set this one out, right? And they wait for the perfect moment for everything to be aligned for them to take a trade and they miss out on so many good trades, okay? That's one issue. The other thing is indicators can give you a false sense of security, you know? Going back to my example of something being overbought or oversold, well, guess what? Something can stay overbought or oversold for a very, very, very long time, okay? Now, don't ask me how I know that. A friend of mine told me that. I've never experienced that in my own trading, right? Actually, I have, okay? So keep that in mind that an indicator can be used and an indicator can be used in a favorable way, but the number one factor is how you actually manage the trade around that, how you manage risk, how you manage profit targets, how you manage all the things around it, it's not the indicator that's magic. The magic comes in the money management. And then number two, like I said, it's how your brain processes what you're seeing on your screen. If it helps you make good trading decisions, use it. If it doesn't, then don't. And lastly, like I said, do not get so many indicators on your chart that it's causing conflicting signals that's creating confusion, which ultimately leads to bad trading decisions. Hopefully that helps. We'll see you on the next episode.