Some investors will try to create the perfect mix of indicators on a chart to lead them to the right moment to buy or sell a stock or a financial product. The problem is that if everyone is watching the same indicators and looking for the same patterns and setups, wouldn’t that render the validity of a strategy worthless? In fact, all indicators are based on one thing and one thing only: Price action.
When watched diligently, price action can lead traders to the market’s sentiment toward groups of stocks as a whole, where the rest of the homework becomes relatively more straightforward afterward. Ever since the U.S. presidential election, price action has been led by the agriculture sector—specifically, fertilizers and the chemical companies that support these products and their rising demand.
