I constantly get asked questions about which technical indicators I use when looking at charts. Only two things matter: PRICE and VOLUME. That is it! You don’t need anything else! Why? Because if price and volume “create” all the technical indicators, why not just look at the original source?
The following indicators are useless to me: Stochastics, RSI, MACD, Bollinger Bands, Fibonacci, etc. The only things on my charts are price, volume and open/high/low/close bars (I do not use candlestick bars). I do use moving averages, but simply as a reference point and not as an indicator.
I think people who use these indicators are looking for some “magical signal” to get in and out of a stock. Sorry for the breaking news but: MAGICAL INDICATORS DO NOT EXIST. All you need to know is if the stock is being accumulated (and in an uptrend) or being sold (and in a downtrend). Learning how to read price and volume can tell you this. In other words, the indicators are simply a crutch and you don’t need them.
When I was taught how to read charts, no one introduced me to all this nonsense. Now I am glad that I don’t have to “unlearn” anything. Here’s a suggestion: If your charts are cluttered with a bunch of indicators, get rid of them for a day or two. By doing this, you will pay more attention to the price action, get a better feel for the market, and improve your instincts as a trader.