I believe that everyone is familiar with naked forex trading.
But I hear you asking, “What precisely does this mean?”
Actually, studying a currency pair without using any indications is what is meant by “naked forex.”
Trading using the cleanest chart possible, thus.
In essence, price action trading, which is highly well-liked by many traders globally, is the same as naked forex trading.
The majority of you have probably seen this trading approach on my charts, and I am also a huge admirer.
Many of the traders who come to me are accustomed to using a variety of indications, and they have gotten so perplexed that their trading is completely ineffective.
When I occasionally look at the charts of these folks, I can occasionally be astonished by this; in fact, the confusion on those charts just makes me uneasy.
Whatever I say, let’s start from the beginning and return to the fundamentals.
Back To the Basics
Trading naked has a number of advantages, one of which is the removal of the need to analyze intricate technical patterns, which might delay trading choices and result in information overload.
Instead, you only use a plain, uncluttered chart devoid of any unnecessary distractions as the foundation for your trades.
But what do you use as a basis for your trades if you don’t employ indicators? For instance, I base my trades mostly on the Supply and Demand method.
However, there are other methods of trading, such using support and resistance.
Every candle in the market may reveal something to us, and the pattern the candles form can reveal a lot as well.
Live price movement and other variables, particularly information on volume and order flow, are combined by naked forex traders.
Thus, trading with price movement is the fundamental kind of trading, and I am primarily referring to trading with supply and demand.
Additionally, I employ additional confirmation methods like volume or order flow, which guarantees that I may have an even greater success percentage.
“If increased prices coincide with fewer participants, the naked trader has to be alert.
The naked trader should jump to the conclusion that the party may be over if this is the case.
Early purchasers should consider becoming sellers if prices increase and fewer buyers show interest. On the other side of the deal, the same is valid.
A sinking currency with an unexpected spike in volume can indicate a recovery.”
What Else is Important to a Naked Forex Trader?
Understanding the various market stages is another crucial aspect for a naked trader.
The basis for naked forex trading is the present market, not the history. (Of course, you do pay some attention to historical movements.) Therefore, it is crucial that we understand the market’s direction.
Of course, knowing what type of entry we are truly looking for can also assist.
- Ranging lows
- Trending upwards
- Ranging highs
- Trending downwards
Trading with the trend is a solid rule to follow because these stages frequently reoccur.
This manner, you can make sure you take the least amount of danger, especially if you are a beginner trader.
Your familiarity with candlestick patterns is very crucial while naked trading.
If you wish to trade without any protections, you must have this expertise.
Therefore, I will unquestionably advise that you do so before beginning.
After reading the foregoing, I believe you understand my position on trading while unclothed.
I strongly support it.
Of course, there will be a variety of viewpoints, and it all depends on what works best for you as a trader.
However, I myself will only ever be interested in trading price action in conjunction with volume and order flow tools.
This kind of approach has the important advantage of preventing the annoying analysis paralysis, which causes trading choices to be delayed or impossible to make due to information overload.
However, I do think that using the instruments for volume or order flow is a crucial added connection to trading with price movement.
In conclusion, investors should be aware that naked trading is the act of trading without using any indications.
Decisions are made by looking at charts or candlesticks, and this approach heavily relies on technical analysis. While some traders choose this more straightforward approach, others might feel more comfortable using indicators. Before evaluating if this approach could be effective for themselves, all traders need have a basic understanding of how naked trading operates.
What do you think?