Alla Peters, — The Problems With Trading Indicators

Alla Peters, the founder of Fibonacci Trading Institute developed proprietary Fibonacci Method after questioning the validity of technical indicators and fundamental analysis during collapse of 2008. She was determined to discover why stocks with solid fundamentals were collapsing and technical indicators were giving endless false signals.

Since 2008 market collapse Alla dedicated her time and effort to discover that Fibonacci is the most accurate tool in the markets. Alla Peters removed all indicators from her charts and she started seeing clearly that endless cycle of repeated Price Action and Fibonacci Ratios is what forms the market puzzle. Alla Peters came to very clear conclusion that Fibonacci Is the Only Predictive Tool in the Markets, while all indicators are artificial and delayed. For example, a simple indicator which plots a pivot point requires a number of price bars to print after the pivot before the pivot can even be identified. Fibonacci always identified key trend inception and trend reversal levels ,which in fact are pivot points in advance.

Alla Peters also noted that momentum and oscillator type indicators were similarly afflicted as the market most often had turned ahead of any signal from the indicators. Similarly, overbought and oversold indicators could spend nearly their entire time in buy or sell territory during a trend and provide many opposing false signals.

Many traders use a number of technical indicators ‘in combination’ to try and filter out the signals coming from their indicators. Alla knew that some indicators perform better in a trending market yet, they did not work so well in corrective markets. So, this filtering of indicators generally leads to a trader employing various indicators which most often produces conflicting signals.

A further detracting factor of technical indicators is that they promote laziness in a trader. The trader believes that they do not have to do anything but wait until the indicator tells them what to do and when to do it. The trader loses the context of the market and what the price of the instrument is actually telling them in that instant.

2008 taught Alla that Price Action stripped of indicators and Fibonacci show that market is not a chaos. Alla teaches Price Action for entry and Fibonacci for exits. Alla Peters had been teaching Proprietary Fibonacci Retracement Strategies from beginner to Hedge Fund traders since 2011 at Fibonacci Trading Institute.