I Thought I Needed More Indicators but I Actually Needed This

Clarity beats complexity

Photo by Jean-Luc Picard on Unsplash

Every time my trading went through a difficult stretch, my instinct was to fix the tools. Add a momentum indicator. Try a different moving average length. Find a combination of signals that better captured what I was trying to identify. The problem, in this framing, was always analytical. Not enough information. Not the right signals. Not the optimal configuration.

I spent about two years in this mode. My charts accumulated layers. At one point I was running eight separate indicators simultaneously, had three different timeframes open at all times, and had a watch list that had grown to forty-seven names because more coverage seemed like more opportunity.

The results did not improve. If anything they got marginally worse, which at the time I attributed to needing even more refinement.

The shift came not from finding better indicators but from a conversation with a trader I respected who asked me a question I could not answer. He did not ask about my indicators. He asked whether I had ever documented what I was actually trying to do on each trade before I entered it. Not the analysis. The specific action plan. What would happen, in each possible scenario, and what I would do in response.

I had not. Not in writing. Not with the specificity his question implied.

That absence turned out to be the actual problem.

Why More Indicators Feels Like the Right Solution

The pull toward adding more analytical tools is understandable and almost universal among traders who are not yet producing consistent results.

Losing trades have identifiable reasons when you look at them after the fact. The trend was weaker than it appeared. The volume signal was ambiguous. The resistance level you did not account for was the one that stopped the move. Every reason sounds like it could be addressed by a different or better analytical tool. Add something that measures trend strength. Find a volume indicator that filters ambiguity. Identify more resistance levels.

Each addition addresses the post-hoc explanation for a prior loss. It does not address the actual source of the problem, which is usually not analytical at all.

The human brain is very good at finding explanations for events after they occur. Those explanations, even when they are technically accurate descriptions of what happened, are not the same as understanding why the trade was taken or why the management decisions were made the way they were. The explanation focuses on the market. The actual problem is almost always in the interaction between the market and the trader’s decision-making process.

Adding indicators addresses the market side of the equation while leaving the decision-making side completely unexamined. After two years of adding indicators, my market analysis was more sophisticated than most retail traders I knew. My decision-making process was almost completely undocumented and unexamined.

What I Was Actually Missing

The thing the trader’s question revealed was the absence of a trade plan.

Not a trading plan in the abstract sense. A specific, written, before-entry document for each individual trade that specified:

The reason for the entry in one sentence. What specific condition made this trade worth taking right now.

The level where the trade is wrong. Not a stop based on how much I was willing to lose. A level where the thing I thought would happen clearly is not happening.

The target, defined not as a number that felt satisfying but as a level where the thesis would be considered complete.

What I would do if the trade moved to the target and then turned against me. What I would do if it stalled for several sessions without progress.

These were not complex questions. They were the minimum information required to manage a trade as an execution of a plan rather than as a series of improvised real-time decisions.

Without written answers to those questions before entry, every management decision during the trade was being made from scratch, in real time, under the emotional conditions of the live market. That is the worst possible time and environment for making quality decisions. The indicators I was running could not solve that problem. No indicator can.

The Difference Between Analysis and a Plan

Analysis and a plan are different things that most traders confuse.

Analysis is the process of forming a view about a market situation. Looking at price structure, volume behavior, broader context, and developing a directional expectation. This is what indicators support. This is where additional analytical tools can genuinely help.

A plan is what you commit to doing at each possible price level the trade might reach. This is what determines whether the analysis can actually be applied correctly in a live market.

Without a plan, the most insightful analysis in the world produces nothing reliable. The analysis is correct. The trader enters the position. The position goes against them by three percent. Now what? Nothing in the analysis specified what to do at this exact moment. The decision is improvised. Loss aversion kicks in. The stop that should have been placed before entry gets moved. Or the trader exits prematurely based on the discomfort of the moment rather than the logic of the setup.

The indicators were fine. The analysis was reasonable. The plan did not exist.

When I started writing plans before entering positions, the indicators became less important. The ones I removed reduced the noise without reducing the signal, because the signal was never coming from the indicators in the first place. It was coming from an honest assessment of the market structure and a specific commitment about how to respond to each possible outcome.

What Writing Plans Before Trades Actually Changes

The practical effect of written pre-trade plans was not what I expected.

I expected it to make the analysis feel more rigorous. It did not make the analysis different at all. The analysis had already been thorough.

What it changed was my relationship to the trade after entry.

Before plans: every adverse move was a new decision. Is this the normal range of volatility or is this a signal to exit? I did not know because I had not defined it in advance. The decision was made in the emotional environment of the moment, which systematically biased toward the response that felt safest rather than the response that was analytically correct.

After plans: an adverse move was evaluated against what I had written before entry. Had the price reached the level I had defined as the invalidation condition? Yes or no. If yes, exit as planned. If no, was this within the variance I had explicitly noted as normal for this setup? If yes, hold. The decision was not a new decision. It was a comparison against a predetermined standard.

This comparison-based management was dramatically less emotionally demanding than the improvisation-based management it replaced. Not because the emotional responses stopped. They did not. But because the emotional responses were separated from the decision by the existence of the written plan. The question was not what should I do right now but does this match what I said I would do.

Those are different cognitive tasks with very different susceptibility to emotional interference.

Simplifying the Analytical Side as a Consequence

Once I had the plan discipline in place, something surprising happened to the indicator question.

With a clear pre-trade plan specifying exactly what conditions would tell me I was right or wrong, I needed much less analytical input during the trade itself. The conditions were already defined. The indicators that I had been watching during trade management, trying to extract real-time signals about whether to hold or exit, became largely redundant. The plan specified the exit conditions. The only question was whether those conditions had been met.

The indicators that remained in my process were the ones that contributed to pre-trade analysis, to forming the view that justified entering the position in the first place. Everything that was serving post-entry management got removed because the plan was now doing that job better than any indicator could.

The chart that had contained eight indicators came down to three. The watching list of forty-seven names came down to twelve that I followed closely enough to actually know.

The analysis did not get worse. It got more honest, because each element had a specific role rather than contributing to a general sense of certainty that substituted for genuine planning.

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I Thought I Needed More Indicators but I Actually Needed This was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.