If you are a total newbie to forex trading, then you probably have come across the term "naked trading". If you haven't, don't worry, it's not some strange cult where people trade without any clothes. Although, if I told you that doing that would make you a better trader, you'd probably do it, wouldn't you?
Naked trading simply refers to trading without the use of any indicators. This may seem like a rather radical thing to do, because we, as traders are absolutely assaulted with indicators. Every platform brags that they have thousands of indicators. My reply to that is "big deal....who cares!"
If you are a fan of old school trading, then you should be a fan of naked trading. When you think about it, it's the personification of what technical analysis should be. Take a look at the origins of the stock market.
You had traders who didn't even have access to charts, so you can forget about them actually using indicators like stochastics, RSI, etc... It may seem primitive by today's standards, but there were plenty of successful traders who did really well just by focusing on the price movement of the stock.
Do a quick Google search for "Jesse Livermore". He was one of the most famous traders at the turn of the 20th century. This is a man who made millions of dollars (a lot of money, and a WHOLE LOT of money back then) by simply paying attention to the price action patterns on a given trading day. He recognized that there were patterns in the price action that helped predict the future price movement of the underlying stock.
If somebody could do this in the late 1800s and early 1900s, don't you feel kind of silly spending hundreds, if not thousands of dollars on trading platforms for all of their useless bells and whistles. It just doesn't make any sense.
Listen, if you can have success using all those indicators, then I applaud you. You are definitely doing something that most people cannot. But for the rest of us, I implore you to go back to the basics.
When 95% of forex traders are failing, we have to take a look at what's going on in the mind of most traders. They are simply looking way too hard for some "magical, psychic indicator" that somehow will unlock all the riches of the market.
I'll be the first on to say that technology is a wonderful thing, but it's gotten to the point where it's made a lot of us quite lazy.
The key to trading the forex market comes down to price action.
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