In the free Maverick Trading video “Why Your Trading Indicators Can Lie,” traders learn a critical lesson that can dramatically improve decision-making: indicators are tools, not truths. While technical indicators are widely used to identify trends, momentum, and entries, many traders rely on them incorrectly—or too heavily—leading to false signals, late entries, and unnecessary losses. Understanding why indicators can be misleading is a key step toward becoming a more disciplined and profitable trader.
This article expands on the concepts covered in the video, explains how indicators actually work, why they often fail in real market conditions, and how to use them properly within a broader trading framework.
The Appeal—and Danger—of Trading Indicators
Indicators are popular because they simplify complex market data. With a few settings, traders can visualize momentum, trend direction, overbought or oversold conditions, and potential reversals. Common tools like moving averages, RSI, MACD, and stochastic oscillators promise clarity in uncertain markets.
However, the video emphasizes that indicators do not predict price. They are mathematical calculations derived from historical price and volume data. That means they react to what has already happened, not what is about to happen. When traders forget this, they fall into the trap of treating indicators as signals rather than context.
Why Indicators Are Lagging by Nature
One of the main reasons trading indicators can lie is that most of them are lagging indicators. A lagging indicator confirms a move after it has already begun. For example:
- Moving averages smooth price by averaging past data, which means they respond slowly to sudden changes.
- MACD uses moving averages, compounding the lag.
- RSI and stochastics rely on recent price history, which may already be outdated during volatile conditions.
As explained in the video, by the time many indicators flash a “buy” or “sell” signal, price may already be extended. Traders who enter solely based on indicator signals often find themselves buying near highs or selling near lows.
False Signals in Sideways and Volatile Markets
Indicators are especially unreliable in choppy or range-bound markets. Oscillators may constantly flip between overbought and oversold, creating a string of false signals. Trend indicators may suggest direction where none truly exists.
The video highlights that indicators work best in the right market environment. When market structure changes—such as during consolidation, news-driven volatility, or low-liquidity periods—indicators can produce misleading results. Traders who don’t account for market context may mistake noise for opportunity.
Overloading Charts with Indicators
Another major issue discussed is indicator overload. Many traders stack multiple indicators on their charts, hoping for confirmation. Ironically, this often creates confusion rather than clarity.
When several indicators are derived from the same price data, they tend to tell similar stories—just in different formats. If one indicator lags, others often lag as well. Traders may feel reassured by “confluence,” not realizing they’re looking at the same information repeated multiple times.
Maverick Trading emphasizes simplicity: fewer tools, used correctly, lead to better decisions.
Indicators vs. Price Action
One of the core messages of “Why Your Trading Indicators Can Lie” is that price action should come first. Price is the most honest source of information in the market. Candlestick structure, trend behavior, support and resistance, and volume often provide clearer signals than indicators alone.
Indicators should support what price is already telling you—not override it. For example:
- A bullish indicator signal means little if price is below key resistance.
- An oversold reading doesn’t guarantee a reversal if the trend is strongly bearish.
- A crossover doesn’t matter if volume and structure don’t support the move.
When traders ignore price action in favor of indicator signals, they often enter low-quality trades.
The Psychological Trap of Indicator Dependency
Indicators can also create a false sense of certainty. Traders may believe that if they just find the “right” indicator or perfect settings, losses will disappear. This mindset leads to constant tweaking, system-hopping, and frustration. See our video: Technical Indicators: Myth, Legends and Fairy Tales for more information.
The video explains that indicators don’t remove risk—they only visualize information. Losses are still part of trading. Overreliance on indicators can prevent traders from developing intuition, discipline, and risk management skills that are essential for long-term success.
How to Use Indicators the Right Way
Rather than abandoning indicators altogether, Maverick Trading teaches traders how to use them correctly and strategically. Some best practices include:
- Use indicators as confirmation tools, not entry triggers by themselves
- Match the indicator to the market condition (trend vs. range)
- Combine indicators with price structure, not instead of it
- Focus on one or two indicators you truly understand
- Avoid optimizing settings endlessly—consistency matters more
For example, a moving average can help define trend direction, while RSI can help gauge momentum—but only when price structure supports the idea.
Risk Management Still Matters More Than Indicators
No indicator can compensate for poor risk management. Even the best signal can fail. The video reinforces that successful traders prioritize:
- Defined stop-loss levels
- Proper position sizing
- Favorable risk-to-reward ratios
- Consistent execution
Indicators don’t manage risk—you do. Traders who understand this survive long enough for their edge to play out.
Why Professional Traders Think Differently
Professional traders tend to view indicators as secondary tools. They focus first on market context, liquidity, structure, and behavior. Indicators are used to refine timing or confirm bias—not dictate decisions.
This mindset shift is one of the most valuable takeaways from the video. When traders stop searching for perfect signals and start building structured decision processes, their consistency improves.
Take Away
Indicators are not villains—but they are often misunderstood. “Why Your Trading Indicators Can Lie” delivers an important reminder: markets are dynamic, and no tool works perfectly in every condition. Indicators reflect the past, not the future, and treating them as predictive signals can lead traders astray.
By prioritizing price action, understanding market context, simplifying your charts, and using indicators as supportive tools—not decision-makers—you can avoid many common trading mistakes. Combine this knowledge with strong risk management and discipline, and your trading approach becomes clearer, more consistent, and more professional.
Watch the full video in Maverick Trading’s Free Video Library to deepen your understanding, challenge old habits, and refine how you use indicators in real market conditions.
