12 Technical Analysis Forex Tools To AVOID Always

• This is the video where I attempt to piss off every single active Forex trader alive.
• I'll discuss the Dirty Dozen video featuring 12 popular technical tools.
• I guarantee at least one of these tools is in your current trading setup.
• Bad money management and outdated tools are common pitfalls for traders.
• Understanding who really moves the market is crucial for success.

This is the video where I attempt to piss off every single active Forex trader alive. Wish me luck.
And here it is, the Dirty Dozen video. I've been talking about it for a while and people have been asking about it. So here it is. Now, in this video I'm going to take 12 technical tools, 12 very popular technical tools. I can almost guarantee one, at least one of which you are using right now, and I'm going to tell you to stop using it forever.

And in this particular video, I'm just gonna go over why very quickly, but every one of these over time is going to get its own video because it's gonna take a lot of convincing. Especially if this is something you've used a lot. Or even if you've used a few of these and you're using them in combination, you need to be talked out of it.

Because this is how people, and I can pretty much guess if you're out searching for Forex videos, you are one of these people. You are in that 99%. I throw this number around a lot too, and it's probably higher than 99% of spot forex traders who are not at a position where they want to be as far as their overall success rate month after month, year after year.

Now, make a mistake. A lot of those people are losing money. A vast majority of these 99% people are losing badly and we need to take steps to fix that too. But let's talk about why that number is so high. I mean, price either goes up or down. It's a 5050 proposition. How can you end up with a fail rate that is that high?

First off, bad money management. There are people who can actually make pretty good entries most of the time, but money management will always take them down. And this channel is going to have an entire playlist dedicated to fixing that because it's not that hard to fix. You just have to have a structure in place and nobody's ever really given that to you for some reason.

This is very seldom talked about. Online trading psychology is another thing to where you can have great entries, you can have really good money management, but as traders we have this unique ability to self-sabotage, and there are many ways you can do that. And this channel is also gonna have a playlist dedicated to that too. We're gonna cover everything, but way too often, the game is over before it even starts because you are using terrible, outdated technical tools on your chart.

I don't know how this even started. Somehow a bunch of people got together and said, "Okay, we're gonna open up Spot Forex. We're gonna give people charting platforms and we're going to have them use these tools and indicators even though they haven't been developed for Forex, even though some of them are very old, even though many of them don't work very well, or they're based on concepts that you only find in trading equities and gold and things like that."

We're gonna use them for Forex. Every expert out there is going to be using them too. And so everything a new trader sees is going to make them think that these are the only tools available and this is what they're stuck with. And that is not the case. I need to get you off of these things first.

So there are videos in place that will explain why I feel the way I feel. And these are my core concept videos that I recommend. Every single Forex trader, no matter how long you've been doing this, must watch. The big banks video is the single most important video I have ever done. The big banks are the people who move price up and down.

How can you sit there and be a Forex trader and call yourself a Forex trader if you don't even know who these people are and why they do what they do? It's that important. But that's okay. You get to go watch that video and you'll know exactly how they operate.

Also, I tell you not to trade reversals, which is a very unpopular video because most people do. But if I can get you off of this too. Because in Forex there is no such thing as overbought oversold.

Anybody who's using this terminology in Forex has no idea what they're talking about. Because currencies can go as high, as low as the big banks want them to go before some kind of government has to step in and maybe make a change. But price can move thousands and thousands of pips before that happens. There are so many reversal traders out there and big banks just eat them up.

And this is kind of where this video is going. It's really kind of the theme. There are things you must eliminate out of your trading forever before I even start telling you what to do instead. Because I could give you my own algorithm that I use to trade professionally. You would still mess it up if your psychology isn't right, if your money management isn't right, or you haven't eliminated all the things that are holding you down already.

That's what the elimination video covers. And I've put all these in a playlist and I've linked them all down below so you can go see them at some point. Because that alone, if you just spend a little over an hour on all three of those videos, you will, in a very, very short amount of time, become a much better Forex trader just based on what you've learned in those videos, because almost nobody's talking about them.

I'm really surprised how they spend so much time on the nonsense and so little time on what really mattered. Now, a quick programming note before we get into the 12 here. You might have seen me list Dirty Dozen before and fundamental analysis was on there. I'm taking it off because, don't get me wrong, I don't use fundamental analysis hardly at all, and I don't think you should either, but it's going to get its own video.

But fundamental analysis is really kind of the opposite of technical analysis. And this Dirty Dozen from here forward is just going to talk about technical tools. Just so you know that you might have seen this list before, you're going to probably wonder why fundamental analysis is no longer on there. I've just taken it out and I have replaced it with another indicator.

I could honestly make this a dirty 15 or a dirty 16, but these are the 12 that I think are the worst offenders because I think they're also the most widely used. Understand before we start, and I promise you I'm getting into this, but we haven't been able to do this whole spot Forex trading very long. It just started up in 1996 for the retail market.

We all remember the Backstreet Boys. It was not that long ago, really. And you're gonna notice a theme here, that some of these tools and indicators were invented a long time ago, so we can reasonably assume they were not made for the market that we trade. Yet here we are thinking they're the only options out there and that's just what we use.

And we wonder why we fail as often as we do. There are, I'm probably undershooting at 10,000 different indicators and tools that you can put on a chart at any given time, and we are stuck using the same 12, 13, 14, 15. If I were to give you something that was actually made for Forex and programmed, you know, six months ago, it's probably going to be a better option than something that was made for stocks, you know, back in the 1970s.

If I were to give you a choice and said, "Okay, I need you to get something done here is The Zach Morris Brick phone here is a modern day smartphone." Which one do you think would work better? You could, you might be able to get it done on the older phone, but your chances are way, way better with the smartphone. So in trading, because this is your money, make it so your chances are as high as possible and you cannot do that with these tools.

So without further ado, let's get into it.

Number 12. This is the indicator that I have substituted in when I took Fundamental Analysis out. It is the ADX indicator (average directional index), built in 1978. It has two aspects to it. Most people use it to measure volume, which is good. If you're a trend trader, you kind of need to know when there's enough volume for you to trade because if not, you're gonna get killed.

But the volume meter on it is just way too slow. And if you try to speed it up, it becomes wildly inaccurate. It just gets you into the market way later than it should. And there's also a component, I guess, kind of below it. It's two indicators in one. It's two bad indicators in one. It's called the DI directional index, I guess.

And that tells you if the market is or whatever currency pair you're trading is bullish or bearish. And it lags really. I mean, it lags heavier than even things like stochastics do. I mean, it's very, very late. If you want to talk about an indicator that gets you into everything way too late, this is it. It had to make the list at some point.

So that's gonna be number 12.

Number 11: Trend lines. Okay, so understand this is not, I'm not ranking these, I'm just listing these. But if I was ranking these, trend lines could very easily be the worst. Trend lines are awful.

First off, nobody ever draws them the right way. There is really no one way to draw them right. Everybody draws them differently. And therein lies the problem. You know, do you connect the very tops? Do you connect where price closed? If price has broken the trend line, do you keep it on there? Everybody has a different idea of what a trend line is supposed to be.

It's really messy. There's no one uniform way to do it. That's a big problem. And on top of that, there's just way too many options. If you were to show me any chart right now on any time frame, I could probably draw five or six different trend lines, you know, which one do you think the markets are going to respect?

Well, the answer is probably none. Because for one, once you discover there's even a trend in place, it's typically over. That ever happened to you? You have, price has, I'm doing air quotes, hit three points on the trend line and then you use it and all of a sudden price no longer cares about the trend line.

That's because there's really no such thing as diagonal support or resistance. We're gonna talk about regular support and resistance in just a little bit. But if you really think the banks actually care at all about support and resistance that goes diagonally, you're crazy.

There the video on this is going to be great because I could talk about trend lines forever and why they're terrible, but if there's one thing, if I do one thing in this entire video, please, now and forever take trend lines off your charts and never bring them back.

Number 10: Stochastics. 1950s. Yes, you are using an indicator from the 1950s as if nothing has ever evolved since then. And it's based on overbought and oversold, which already, especially if you've watched that reversal video, you have understood by now that that's not even really a thing in forex.

So I could just really stop here and that would be reason enough for you to never use this again. But it doesn't even do a good job of showing overbought and oversold. I know stock traders that hate this indicator because there it gives so many false signals even when price is range bound.

But then on top of that, when price actually trends, traders get obliterated because reversal traders are always looking for reversals and they're going to do that when price is trending. And if price just keeps trending, Stochastics is going to give you so many bad signals that any money you might have made during the range bound period you are going to lose during the trending period and then some.

And yes, if you look up here, there is a fast and a slow version of Stochastics and there's a bunch of in-between versions you can use too, depending on where you put your settings. I have used them all, I have tested them all, they are all terrible.

Number 9: Price levels. So this is not something that actually it's not an actual program tool that goes on your charts. But we know what price levels are, right? If you have a round number, say like the euro dollar at $1.30 even that's considered a price level and people think that is an actual point in time that you should give a shit about.

Not the case, because they also say the same thing. When price ends in 5, 0, or 20 or 80, there's just way too many options out there that people tell you to use. They wait for something to actually happen, and then in hindsight, they say, "Hey, look, price had rebounded off the 50 level or the 20 level."

Way too many options. And they're not really psychological levels. People love to call them this. That's not what it is. Wherever heavy amounts of trading are happening, that's what the big banks see. And if they just so happen to occur at one of these levels, the big banks are going to see it and they're going to react accordingly.

But here's the thing. You have no idea at what price this is going to happen. The price of the euro dollar could skyrocket past $1.30, past $1.31, and then finally bounce off 132 for a little bit and everybody goes nuts. Say, "Hey, look, it bounced off this psychological level."

That doesn't help you. Why didn't it react to $1.30? Why didn't it react to $1.31? You know, this would have been really helpful to know beforehand, but you don't. Price levels are not helpful, and they only look good in hindsight.

Number 8: The CCI indicator, Commodity Channel Index is something people use for trends and reversals. It was built in 1980 and it's just...it's just too jerky. It gets you into everything way too quick, which is not a good thing in this market. Being too early is no good. Being too late is no good either.

And it's just way too overreactive. No matter how much you try to smooth it out, it just doesn't work. It's almost like, you know, we all have that friend or that coworker that just flips out over everything, too just completely overreacts to every little thing that most people would just kind of write off.

You wouldn't give that person your money to invest. You would not trust them to make good decisions. And that person is the CCI indicator. And people, for some reason, want to use it for reversals and use it for trends.

They think they found a way, but it just moves too fast. And if you try to smooth it out, you completely fritz out the mechanics of the indicator itself. I really got excited this one when I first found it.

I thought I had some ways to make it work. I tried everything and it just failed every single time.

Number 7: Support and resistance lines. Okay, this might just be the most popular one of the entire 12. And it's gonna take a lot of convincing to get you to take these off your chart. But hear me out on this. There's just too many possibilities on this one.

There's too many lines that can be drawn on a chart. Support and resistance wise. On any given time, people use all sorts of different time frames. Even within, let's just say the daily time frame, there's three or four lines that are very easy to draw and they're very easy to see.

This isn't like trend lines where everybody draws them different. Pretty much if a support line goes here, that's where it goes. And every single trader can see them way too easily. Now what happens when everybody can see them, everybody wants to use them. And all of a sudden you have created a hotspot on a chart with a lot of trading action.

And guess who sees that? The big banks. And they absolutely feast off of it. They're gonna find what direction most of those orders and most of those trades are going to go. They're gonna trip those orders and they're gonna take price the other way until they have knocked out every single stop loss they can.

This is one of the biggest contributors to that 99% number because so many people use them.

Number 6: Japanese candlesticks. 18th century. What are you doing using these things? They're really easy to spot when they work. So for example, a Japanese candlestick pattern would be like a hammer, for example. But you're not slick. You're not the only person that saw the hammer. Everybody saw it.

And what happens is when you see them, everybody reacts to them. And then the big banks go right after you. You might see a hammer that works really well because price reversed. And that's a really easy thing to see on a chart.

But you probably got lazy and you missed the points on the chart where three other hammers completely failed. The banks will give traders a win every once in a while to keep them in the game. It's called the blackjack theory. I've gone over that in my Big banks video.

But right now, go to any currency chart you want. I guarantee there's gonna be a bunch of hammers that didn't do what they were supposed to do and you didn't even see them. But that one that did work looks super cool and you got really excited and you ended up setting yourself up to fail.

Number 5: And I put this one after Japanese candlesticks because, you know, in a way they kind of go together, but just chart patterns in general. You know, we all love chart patterns, right? But they're really much better for stock trading because most chart patterns are based on trader sentiment.

And trader sentiment is not something we really use unless we're going against it. But there's not really a whole lot of ways to find out, you know, where the money is going. That's the information that the banks know that we don't. That's the one handicap we have.

But for that reason, really, chart patterns don't really work that well. They're still too easy to see for the most part. If a triangle is forming on a particular currency pair, you really don't need somebody to tell you that you have two eyes. You can see that triangle is obviously forming.

But what's going to happen is traders will put orders above and below, or just above or just below. But either way, big banks love to whipsaw here. If they love to take those orders, trigger them take price the other way, make you panic. And then after you've exited the trade at a loss, then they decide where price is actually going to go.

And they love doing this with chart patterns because they are very easy to see, and traders really like to trade them. Moving on to number 4. Oh, Bollinger bands. Yes, early 80s for these people love Bollinger bands. So around 1982, 83, something like that, John Bollinger came up with these. And they are heavily reliant on the whole idea of overbought and oversold, which if you were watching the reversals video, you will realize it's not really a thing.

So from the start, this indicator was very faulty. Probably works pretty well in stock trading, actually. You know, there are certain points where stocks can get overstretched, but currency is not the case.

And some people do use them to call trends, but when it does that, it has the tendency to take you out of that trend too early. I'm a trend trader. I want to get those really, really long runs to give me a ton of pips. And Bollinger bands don't allow me to do that, because as soon as price retraces, they tend to tell me, "Okay, the trend is over and you should exit."

So you should just know by now if you're trading spot forex, anything that has to do with a currency being overbought or oversold or something that's gonna help you trade a reversal just doesn't need to be on your chart to begin with.

Number 3: Fibonacci. This is gonna piss a lot of people off. So Fibonacci has way too many possibilities too. Again, you could show me any chart, any time frame. I could draw about five or six Fibonacci retracements on any chart. There's way too many possibilities.

And what does Fibonacci have, like 5, 6 lines depending on how you set it up? That's going to end up being a lot of lines on one chart. Price is going to probably bounce off one of those lines, but you have no idea which one. If there's any indicator out there that looks really, really great in hindsight but never works when you do it, it's Fibonacci and it's fundamentally flawed from the get-go.

It's based on patterns that happen in nature and on planet Earth, and that just has nothing to do with the way spot forex is set up. And it again, it's too reliant on overbought oversold. Very few people use Fibonacci to trade breakouts or trade trends.

So right before it even goes on your chart, there are so many things wrong with it.

Number 2 is the RSI, the relative strength index. Back in 1978, somebody came together and put this together for stocks and it didn't even work for stocks that well. Most stock traders I know hate the RSI.

So if it doesn't even work well for what it was created for, it's not going to work really well for forex either. This is really heavily researched, heavily used, and there when you see all these things in front of you, there is no surprise to me anymore why that 99% is where it is.

And again it's almost used exclusively for overbought oversold.

On to number 1 and this might surprise a couple of you because I haven't really talked about it yet, but there is a ray of light to this one and it is moving average crossovers. So it's not terrible. They have a tendency to work in certain situations, but it's just not that great either.

Because first off, it's like seeing a hammer. Just because you can draw a 50, a 100 to 200 SMA on your chart doesn't mean you know something somebody doesn't. You know you're about to make yourself very popular when price approaches one of those levels or when those two moving averages cross and it just gets you in too late.

I have a way that can get you in much sooner. And that's the approach I'm going to talk about when I make that moving average crossover video. But on any given day, I am probably entering a trend before you because you are using moving average crossovers and you're just getting in too late.

It almost might be a situation where it's a trade to where I'm going to make a little bit. I'm going to actually make a little bit of money and you're going to lose the trade altogether. And you just can't afford to have those things happening to you over and over again.

That's the danger of getting into a trade too late. Too early is no good. Too late is no good either.

So, as I had mentioned before, I'm going to make an individual video on every single one of these. So you can kind of see where my headspace is. And I can hopefully, especially if you're using them right now, get you away from them forever.

It's a hard sell because you spent so much time on it and you've just played around with it so often and try to develop your own systems with these tools. But the sooner I can get them out of your trading toolbox, the better.

And as is going to be the case with this moving average crossover video, I am going to give you a much better option. I'm going to do that on some of these videos, and then going forward, I'm going to have other videos where I release some of the really, really good tools and indicators that I have used over the years as well.

So if you'd like to see that and you also want to learn some really good trading psychology and money management tactics, subscribe to the channel. It's here for you. I mean, who else is talking about this? Who else is saying, "Here are 12 really, really common indicators that everybody uses and loves and you should not use any of them?"

Nobody. But I would have never become a forex prop trader had I not done this first. You really have to eliminate a lot of this stuff before you can even think about moving forward.

But following the same tired advice with the same tired old technical tools being used every time is not going to get you anywhere. You need a channel like this to help you move forward. And this is what I put together. I have new videos that come out every week. I have a podcast that comes out every week. So many directions for you to go.

I'm going to link it all down below. But either way, subscribe. Hit that bell and we're going to do some things here, guys. Let's go get it.