Indicators can be overused and exploited and this can cause the trader using these indicators to have poor results.  Overuse by too many traders can create an imbalance of order flow or ‘log jam’ of orders that triggers the automated execution systems of the modern day exchanges. 

It is not the market maker, but order flow imbalance that impacts execution on most small retail orders.

Indicators should be used for what they were intended to do – define where price has been and where it is going.  However additional interpretations can offer analysis that can be helpful.

The most commonly overused indicators are convergence and divergence indicators. In an attempt to use indicators as an entry signal pattern, several convergence and divergence indicators have been developed.

These indicators have been exploited by charting software companies that promoted the concept that traders could just buy and sell based on red light/ green light patterns and be successful in the stock market.

If it was really that easy, then consider this: every market maker, floor trader, and professional in the stock market would be using these systems. 

The reality is that trading requires intelligent thinking and logic.  A computer program is incapable of reacting to changing market conditions or adapting when the market participants’ cycle alters.