The Most Reliable Indicator in Trading

The most reliable indicator in trading is not hidden in complex algorithms, exotic oscillators, or advanced valuation models. Instead, it lies in the simple act of observing when price makes new highs. Yet culturally, many of us struggle to embrace this logic. We are raised to value bargains and to believe that buying something “cheap” is prudent and intelligent. Western societies particularly celebrate the illusion of outsmarting the system by paying less.

However, momentum trading rewards the opposite behavior: it pays those who are willing to buy into strength. To most people, paying more than yesterday’s price feels counterintuitive, even foolish.

This resistance has evolutionary roots. For millennia, survival favored caution. The individuals who conserved resources and avoided uncertainty were more likely to live longer. As a result, our instincts push us toward safety and familiarity, discouraging us from pursuing situations that appear “too high” or “too risky.” Loss aversion—feeling losses more intensely than gains—is a psychological echo of this ancestral bias.

So when markets break into new highs, both cultural conditioning and biology trigger alarm bells: “Too expensive… due to fall… dangerous.” This blinds us from understanding how crowd dynamics can amplify trends far beyond our expectations. Our internal models of the world make it difficult to see what the crowd has already begun to reveal.

In reality, price itself offers the clearest signal. All indicators ultimately derive from price. Profit is earned on price movement, not on opinions or complexity. Therefore, the central question for any trader should be simple:

Has the price moved to a new high?

Whether it is a new all-time high or a breakout from consolidation, the key requirement is upward movement.

People often ask why this strategy works. The answer is straightforward: because historical performance consistently shows that assets making new highs often continue making new highs. From broad indices like the S&P 500 to standout equities such as EOS on the ASX, the same pattern appears.

Indicators can obscure the truth.
Price reveals it.

Price contains the message.
Your task is to learn how to listen.

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