Use Technical Indicators With A Grain Of Salt To Trade In The Stock Market

Use Technical Indicators With A Grain Of Salt To Trade In The Stock Market

I don't get how people can trust so much some technical indicators when trading and/or investing in the stock market. It seems to me that they really believe that this or that indicator, can take a huge amount of data, perform some simple math calculations (ok, some are more complicated which make them even worse!), plot a line and then that's it! You just need to follow its guidelines and you will be putting loads of money directly in your pockets.

Unfortunately, as you know, things don't work like that. First of all, I believe that one must stop following some indicator's guidelines like they were carved on stone and start seeing and analyzing everything with a grain of salt. Bear in mind that the same indicator that you are now analyzing, might be giving different results to another trader looking at the same indicator at the same time with the same configuration!

Why? There are several reasons why this might happen. One of them, and I would say one of the main ones, is data accuracy. There is no way you can tell if your data is accurate, if other traders data is accurate and even worse, you don't know if any of the data that is available on the web is accurate! Even with the high technology that have flooded the stock market, there is still a big lack of reliability to the data provided to the user.

So, when investing in the stock market, always take everything with a grain of salt. Do not believe that "powerful" indicator that everyone is talking about is completely reliable nor that the data that you are seeing, right now, in front of you, the same data that your broker assured you is the real deals, is in fact real. There are still many problems today with data accuracy and because of that, you must be well aware if you want to be successful as a trader.

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