Where technical trading signals are concerned, there are many indicators to choose from.
Today, I want to talk about illusion, because illusion is what most trading is based on. This in itself is not the problem, the problem is that many traders give the illusion meaning, when often it is an illusion.
The illusion may take the form of Elliott Waves, Gann analysis, RSI divergence, MACD signals, Stochastics, or whatever. The truth is that none of these mean anything. This is not to say that the signals are false, but they will only be correct on a statistical basis, i.e. they have no meaning.
They are only as useful as long as the market concurs by its action, once it stops doing so they are worse than useless. In fact to an extent most of these techniques are merely used as an entry mechanism. Entry is the easy part, it doesn’t really matter how you enter, it is how you exit that counts.
Many traders overlook these technical trading signal basics, getting hooked on illusions. They then lose out because they cannot see that it has become meaningless. The trick is to see the entry mechanism for what it is, just a convenient illusion to get you into the market.
Successful traders stay with the trade only so long as it fits their criterion, once that stops they are out. That is the key – entry is largely irrelevant, its only relevance is to give you a trigger for getting in, plus a stop point. Understand that and you are on your way.