In our first article, we discussed how following news and economic channels, and trying to make money by analyzing macroeconomic data, does not help you stay consistent or survive in the markets long-term. In this second article, we’ll talk about one of the most widely used tools in financial markets: indicators.

Indicators are tools used on price charts of all assets—stocks, forex, etc.—to analyze past price movements and try to predict potential future directions. They process past price behavior and visualize it on the chart. Traders use them to better understand how prices move and where they might go next.

You’ve probably seen traders on financial news shows or in movies, sitting in front of multiple monitors filled with complex charts and colorful indicators. In reality, many people in the industry like to give off the impression that they’re doing something incredibly complex. But the truth is: most of those indicators and flashy screens are useless. The real challenge is to do the hard work in a simple way.

Most traders start with just one or two indicators. Then they think: “If I follow 10 or even 20 indicators at once, I’ll start making money.” And so begins the search for the magical indicator—or the perfect auto-trading system built on indicators. But here’s what many forget:

All indicators lag price. They only provide information about the past, not the future.

“MACD gave a buy signal, let’s go long. RSI is in overbought territory, let’s sell.”
If only it were that simple.
After nearly 20 years of trading experience, I can confidently say this:

If you rely solely on indicators without combining them with other tools, you’ll often enter trades too late and miss profits.

So why does everyone keep looking at indicators? Because most people follow what they can see.
But professional traders don’t open trades based on what everyone sees. They have their own systems and perspectives—and they use indicators only for confirmation.

A skilled trader won’t sell just because RSI is overbought. Instead, they’ll become more cautious.
They don’t buy just because price crosses a moving average; they use it to identify short- and long-term trends.
If it were as easy as “Buy when MACD gives a signal, sell when moving average crosses down,” everyone would be rich.

But markets are dynamic. Every market cycle has its own personality.
The indicator that works in one environment may destroy your portfolio in another.
For example, if you use moving average crossovers in a long sideways market, you’ll slowly bleed your capital dry.

So what should you do instead?

Focus not on indicators, but on understanding price itself.

Price is the only truth in the market.

Even experienced traders sometimes place too much importance on indicators and miss out on huge opportunities.
I’ve seen traders ignore a rally because RSI showed bearish divergence—only to regret it later.

Is RSI diverging while price is rising? Who cares.

If price is going up, why would you sell before it shows signs of reversing?

The simplest and most effective indicator you’ll ever need is price itself.

So stop wasting time with misleading and lagging indicators.

Watch the price. Focus on the market’s rhythm.

We’ll dive much deeper into this topic in future articles.