John Templeton, who has been involved in forex day trading for more than half a decade and is the creator of the The trade in the Profit forex signal system, soon discovered that all the complicated ways that traders used to pick a winning forex trade were only muddying the field for him. “I was basically just an inanimate object waiting for random lines to cross, telling me that I should open or close a trade. Then I realized. How in the world could make money with the forex trading, if you do not understand what am I looking at?”
This is when John decided to take the bull by the horns and to figure things out for himself. Not more than buy this or that forex training theory. He began to listen to what all the professional traders had to say on the topic. And more than any other sentence that came out of his mouth was the phrase “price action.” John was so appalled at himself that he could have kicked himself. “It was so obvious, I couldn’t believe it.”
When it comes to trading the forex market, John realized that the trader has to make a decision between one of the two ways to analyze the trade: either by using fundamental analysis or using technical analysis. Fundamental analysis takes into account all of the fundamentals psychological that can influence a currency in circulation in the market. Things like the effect that the non-farm payroll numbers which are released once a month can have, or how raising or lowering interest rates can effect a given currency pair.
When it comes to using technical analysis, this type of trader thinks that opening up the indicator menu on their charting platform will somehow tell them which currency pairs to trade based on the indicators reading. From John’s point of view these traders seem to think that-in place of the understanding of price movement — following charts filled with lagging indicators such as the RSI, MACD, and stochastics will lead to the right trade to make. After enduring years of losing trades following this same formula, John is convinced that this way is a lost cause.
The technical indicator that most traders failed not the use is the price of the stock. They are all waiting for all their other indicators to line. For this type of investor, the only important thing is what his static indicators are showing them, and price becomes secondary or even irrelevant. The only thing wrong with using lagging indicators like these is that they do not give the operator a clear picture of what the market is in reality doing during a particular trading period.
When, for example, are trained to begin looking at price support and resistance levels, you are seeing actual statistics which are influencing the movement of the market. No lagging indicator is ever going to give you that type of information that will be kept for a long time. You have to be able to see directly from the market itself. This is what John is trying to hammer home in his forex trading program The trade in the Profit.
The name of his program refers to the shedding of indicator based strategies and returning to basic price action indication. In other words, the trade in profit, without using the theoretical indicator window dressing that many traders are taught two base their trading habits on. The theories sound good, but they don’t always work. In short, what John learned by the trade for the benefit of himself, more and more of its businesses became a success when they are based on the price action.