The Fatal Misconception: “You Win If You Increase Indicators”

In the last piece, I shattered the illusion of a “method that can keep winning.” This time, I’ll dismantle another beginner’s misconception that’s similar. It is the belief that“If you add more indicators, you’ll start winning.”This is the assumption.

Moving averages, MACD, RSI, Bollinger Bands, Stochastics… adding indicator after indicator to the chart. “I want signals with higher accuracy,” so the additions continue. Yet this very mindset is a typical pattern of not winning. This time, I’ll carefully explain why adding indicators is a mistake.

The End Result of a Chart Full of Indicators

What happens when you keep adding indicators? The screen becomes filled with indicators, and the crucial price (candlesticks) becomes invisible.

And a more serious problem occurs. Each indicator starts givingconflicting signals: moving averages say “buy,” RSI says “overbought, so a rebound is due,” MACD says “still descending”... multiple indicators may contradict each other, leaving you unsure what to do. The more you add, the more the judgment becomes confused.

The indicators you added “to improve accuracy” end up dulling your judgment, making you hesitate to enter, or picking only the convenient signals—a “best of both worlds” approach. Addition creates subtraction.

Why Do People Think “Add More to Win”?

First, why do people think adding indicators will make them win? The psychology has the same root as the previous “cup-of-life fantasies.”An excessive expectation of tools, believing “If there were better tools, I’d win”.

When you lose, you don’t want to admit your own judgment was at fault. So you think, “The tool is lacking; add better indicators.” This leads to indicator additions. But the real problem is not the number of tools but the “foundation” for reading the market, which is usually the core issue.

What is Truly Needed is “Subtraction”

A winning trader’s chart is often surprisingly simple.Extremely minimal indicators, or none at all, with many traders watching price itself (candlesticks, highs and lows).This is because the essence of the market lies in the movement of price itself. As explained in Series 7, highs and lows, trend direction, pullbacks—these are read and judged not with indicators, but with price itself. Dow Theory and multi-time-frame analysis are methods for reading price structure, not adding indicators.

What’s needed is subtraction, not addition.Trim away the unnecessary and focus on the core of price.

Indicators Are Only a “Support”

Please don’t misunderstand. I’m not saying indicators are completely unnecessary. Indicators like moving averages can be effectively used as aids to grasp trend direction. The problem isthe mindset of entrusting judgment to indicators and assuming more is better as the count increases.

Indicators are merely aids for price analysis. The main character is price itself. Instead of lining up many helpers to become the protagonist, use a few helpers to support the price as the star. Do not get this wrong. One or two carefully chosen aids are enough.

Please discard the fatal misconception that “adding indicators will make you win.” The number of tools isn’t what you need to win. It is the ability to read price itself. Simplify the chart, trim unnecessary indicators, and focus on the essence— highs, lows, and trend. Subtraction is the path to a chart that wins.