The more signals you listen to, the more noise you’ll hear. That’s not technical analysis — it’s Signal-to-Noise Theory. And it’s telling us that indicators are a diversion.

Trading is about making decisions. And to make the best decisions, you need the purest signals — those with high signal-to-noise ratios.

So why not just get rid of all indicators and tune in to Price, the purest signal of all?

No Respectable Professional Trader Uses Indicators

The best traders avoid indicators like the plague. They know that indicators are herd-traps marketed at novice traders as easy “trading signal” tools.

The best traders know that to trade effectively, they need to streamline and simplify their analysis, and on many occasions, trade against uninformed money.

I’ve had the chance to hang out with some of the top traders in the world and I’ve watched them trade right in front of my eyes. They have no respect for indicators — all that matters to them is price (a reflection of market supply and demand), for good reason.

So Why Do Indicators Exist?

Indicators exist because people are lazy. They want things to be done for them.

They want an indicator they can use that tells them that when the dot turns orange it’s time to sell and when the dot turns green it’s time to buy, every time and forever.

Just like people who buy into get-rich-quick schemes in the hopes of making it big, they’re the perfect market for snake-oil-indicator salesmen.

TA the Right Way: Price is King

Price is the only signal you need to make your trading decisions. If you have access to level-2 (order book information), then that doesn’t hurt either, although that could get noisy very quickly.

Part of the art of great trading is the ability to ruthlessly tune out noise disguised as information.

It’s difficult at first. When you focus just on price, your brain will inevitably have doubts about the “completeness” of your analysis. It can’t be that simple — I must be missing something!

And so you wander into indicator-land and come out with a much noisier signal that’s ten times less useful than what you had in the first place. But you feel more reassured because now your analysis feels more “complete”.

Resist that temptation. Everything you need to know about the market is reflected in price. And everything else is secondary.