Strategies without indicators on Forex are based on the analysis of candles, charts, graphical models and figures. Very often, Renko charts and tic-tac-toe are used, which display how the value of a financial instrument moves without a time reference. This approach makes the process of finding market entry patterns much easier, as the small fluctuations in value that traders call market noise disappear.
The benefits of trading without using indicators
The main advantage of indicator-free Forex strategies for traders is that their signals can get ahead of the market. A trader can learn about changing trends even before the previous trend finishes moving. This makes it possible to prepare before entering the market and get the maximum possible profit, since entering the market at the very beginning of the trend brings more benefits than in the middle. Even the best indicator is not able to get ahead of the chart.
The second advantage is that such Forex trading strategies give a more accurate signal than indicators. The reason lies in the fact that a computer program, unlike a trader, is not able to take into account all market factors. A novice trader will not notice this at the beginning of his activity, however, over time, when a trader gains experience, he will be able to guess the direction of the trend with a probability of up to 95%.
Using non-indicator strategies, a trader can gain experience and become a professional much faster. This is due to the fact that the trader must independently analyze all market factors without using any auxiliary tools. Of course, this approach is very complex. It is much easier to use any program to analyze the schedule, but independent work is more efficient and informative.
Almost every strategy that does not involve the use of indicators can be combined with another, which cannot be said about indicator strategies. It is possible to combine two strategies based on the use of indicators, but such a step will lead to a decrease in efficiency. An indicator strategy is a holistic organism to which nothing needs to be added, while a strategy without indicators is only part of the organism. There are many ways to analyze charts, and in order to develop an effective strategy, you need to use several of them at the same time. The more methods are used, the more difficult trading is, however, the trader’s profit will increase.
A feature of any indicator that is used in the course of market analysis is its obsolescence. Over time, the market changes, and already created programs are not able to carry out its effective analysis. As for strategies without indicators, they are based on constant features of the markets, therefore they will always function.Of course, in many years even a non-indicator strategy on Forex may become outdated, but during this time, firstly, other strategies of this type will appear, and secondly, a trader will have time to gain experience in order to develop his own strategies for working on " Forex trading. "
Lack of strategies without indicators
Indicator-free trading has one minor drawback. It is a bit more complicated than indicator based trading. But this is not critical.
There are users who like independent market analysis, and there are those who prefer to use existing programs.
What is used in strategies without indicators?
There are three main tools that traders use in a non-indicator analysis of the financial market:
- patterns
- geometric figures;
- support and resistance lines.
A pattern is a combination of candles and the ratio of the maximum and minimum points on the chart. A striking example is the pin-bar - a candle that has a small body and a small tail. Geometric figures are a triangle, squares and other figures that are built on a graph and are used for analysis.
Types of indicator-less strategies
There are a large number of Forex trading strategies that do not involve the use of indicators. The most popular, profitable and at the same time those that will suit both beginners and professional traders are the following:
- "Start".
- "Lazy trader."
- "Inside Bar".
All of them have their advantages and disadvantages, like any profitable Forex strategy without the use of indicators.
"Start"
The Beginning can be considered a Forex strategy for beginners, since its implementation does not even require the construction of geometric shapes. “Beginning” is a scalping strategy, that is, it involves closing deals as soon as they begin to generate small profits (up to 18 points on average). Its essence is to determine the direction of trade at the European session.
The European session opens at 8 a.m. winter time and at 7 a.m. summer time, and lasts for eight hours. Thus, “Beginning” is a daily Forex strategy without an indicator. It involves daily entry into the market once a session. Using this strategy, the trader always knows at what time he will open and close the order. It is well suited for pedantic merchants who prefer to plan their day and earn stable income.
Algorithm of the Beginning Strategy
“Beginning” can be attributed to the list of profitable Forex strategies. High earnings are available thanks to a thoughtful approach to its creation. The first step is to have the trader already at the monitor and ready to trade by the opening of the London session (8am Moscow time). The time interval is M30.
The second step is to wait for the closing of the first half-hour candle. After that, the trader can leave the terminal for a while. The main thing is not to sleep. After the candle closes, two pending orders should be placed. The first Bai Stop order is opened for purchase and placed at the maximum point of the first closed thirty-minute candle. The second order, Sell Stop, should be placed at the minimum of the candle. In the event that the price starts to rise, the buy position will be closed automatically, and if the price starts to decline, the sell order will be automatically closed.
The next step is to place a StopLoss on the triggered order at the level of another order. The second pending order does not need to be deleted, because in the case of a false signal, it will allow you to either earn or go to zero.
Lazy Trader
This is another lucrative Forex strategy. She got this name due to the fact that it requires a minimum of time. The average earnings for the "Lazy Trader" is approximately 50% per month of the deposit.In this case, the merchant spends no more than half an hour to trade. The order opens on Monday morning, and closes on Friday evening. That is why the Lazy Trader is considered one of the best Forex strategies without indicators.
Trading takes place on the H4 timeframe, since its scale is most suitable for the strategy. The second reason for choosing a four-hour chart is that not all currency pairs are considered suitable for the strategy. "Lazy trader" works only with the yen, so the following pairs are of interest to the trader:
- Euro / yen;
- pound sterling / yen;
- Swiss franc / yen.
The behavior of the Japanese currency makes it possible to more effectively predict its movement for up to one week. The yen moves in jerks in almost 100% of cases; the price will move within seven days to where it goes at the very beginning of the week.
Algorithm for using the "Lazy Trader"
Step one is to prepare the terminal for trading. To do this, choose a quote with a yen, except for the "dollar / yen". Then you need to activate the period separators. After that, dotted lines with an interval of seven days will appear on the chart.
On Monday morning, open the terminal and select the first candle for the new week. It is located on the period separator. After the candle is selected, two pending orders must be set. “Bai Stop” is set 10-20 points above the maximum point, and “Sell Stop” is set to the same value, but only below the minimum of the candle.
The next step of this Forex trading strategy without indicators is to set StopLoss for each of the orders. Its level depends on where the second order is located. For example, if Buy Stop is located at 130, and Sell Stop is at 129.5, then StopLoss for the first order will be at 129.5, and for the second - at 130. TakeProfit follows put 3 times more than StopLoss.
Further, all trade takes place automatically. It must be remembered. That it is not necessary to delete one order when the price breaks the second. After this, the trader can forget about the terminal until Friday and only on Friday evening should all orders be closed.
Inside bar
This is another Forex strategy without indicators. It is based on only one pattern - a graphic model. The only thing that needs to be built is the levels of resistance and support, but you can also do without them. This feature makes Inside Bar the best Forex strategy for many traders. The graphic model is called “Inner Candle”. It is a candle whose upper end is lower than the previous candle and the lower end is higher.
The value of this Forex trading strategy is that it is unique, as it can be applied on any interval, starting from M1 and ending with D1. This means that Inside Bar is suitable for both scalping strategy lovers and traders who prefer medium- and long-term trading.
Inside Bar Algorithm
Inside Bar is another representative of the Forex intraday trading strategy. The first step is to open any currency pair at any time interval. Next, determine the direction of the graph. A trend may not always be expressed. In such situations, you must either change the quote, or return to the terminal after a while.
The second step when using this Forex trading strategy is to get a signal to enter the market. A buy order should be torn off when the price moves down or when an internal candle appears, which goes up. A sell order must be torn off either with an uptrend or with the appearance of a bearish inner candle with a bullish container.
StopLoss is set at the minimum level of a container candle for a buy order and at the maximum for a sell order. The value should be small - up to 10 points. This is done so that in case of a false signal the trader does not suffer a big loss.
The exit from the market can be carried out either by Take Profit for a certain time interval, or by the nearest level of support / resistance.
Conclusion
Each strategy used on Forex without indicators is capable of making profit even for a beginner. They can be used individually or together. However, novice traders should not combine non-indicator strategies.
You should start with a single strategy and trade, using it, for 1-2 weeks to gain experience. After that, you can trade for a week using a different strategy. If a trader is happy with his results, it is worth starting to use several rules at the same time.
