Trading Facebook groups, Discord rooms, Reddit, you see it everywhere. Traders posting screencaps of vibrant charts with 25 different indicators obscuring the space around and on the actual price action. I’m not saying technical indicators don’t have their place, but to use them to that scale and to place too much trust in them can be dangerous.
I’ve experienced the pain they can potentially cause first hand. I used to be a firm believer in trading by the VWAP. I won’t lie, a lot of the time those trades went my way. So often in fact, I developed a bit of an overly trusting relationship with that particular indicator. What I discovered in the end was that a symbol might ignore your indictor completely and without any logic, or it might follow it fairly closely but make its move your way a small percentage outside if your allowable stop according to what the indicator reads. The former can’t really be helped, the latter becomes a big issue if you’re using what the indicator is telling you down to the penny (or tick, etc).
Of course while these are being used, ultimately one should use them as a helpful tool that provides some possibly levels to consider. Using them for more than that can definitely lead to some bad situations.
I mentioned earlier that I used the VWAP and traded according to it pretty faithfully until I got burnt a few times. At which time, I removed it as well as the 9, 20, 50, and 200 EMA’s off of my chart. You know what I discovered? As far as technical, my eyes are telling me everything that those indicators were drawing for me, minus the pinpoint accuracy. And that’s how I’d prefer to think about it. “This area is where I’m expecting X to happen.” For me, the pinpoint accuracy of the indicator lines was a big problem for me because I would inadvertently take it too strictly, too literally.
I’ve had all of my indicators off for over a year now, and have honestly traded better without them. If you’re experience frustrations with yours, I recommend trying to lose them and see how much you really lose (as far as interpretations of price action). It’s worth a shot!