Trading Naked. FxForaLiving.com
Trading Naked (No indicators)
David Aranzรกbal FxForaLiving.com
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Trading Naked. FxForaLiving.com
INDEX
1. The Learning Cycle 2. The shortcut 3. Price as the leading indicator 4. Price vs Indicator 5. Practical Examples
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Trading Naked. FxForaLiving.com
THE LEARNING CYCLE
Typical evolution cycle in the Learning curve for traders: - Phase 1: The trader doesn’t know any indicator at all - Phase 2: The trader learns the 2 or 3 basic indicators - Phase 3: As long as the trader improves his learning curve, but fails in his final results, he researches to find “the best indicator”. The more complex and more rare, the better. - Phase 4: The charts look like a work of art by picasso - Phase 5: The trader removes all the indicators and finally leaves just 1 or 2. He finally masters these incicators.
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Trading Naked. FxForaLiving.com
THE SHORTCUT
- The previous process can last from months to years. - Let’s take the shortcut: The price as the best indicator
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Trading Naked. FxForaLiving.com
Price vs Indicator.
Price. The price discounts and includes all the action taking place in financial activity. Supply and demand over time is what "paints" the bars and these in turn draw the graphic patterns that can help us interpret what is happening and therefore create conjecture of what may happen in a future. Indicator. It’s a mathematical representation. It’s a function of the last bars drawn on the graphics platform. Therefore by their morphology is associated with a delay. (Lagging indicator) Ej: Formula RSI RSI = 100 -
100 ______ 1 + RS
RS = Average x days’ up closes / Average x days’ down closes
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Trading Naked. FxForaLiving.com
Price vs Indicator II Price Vs Indicator. Advantages and disadvantages.
Time Recognition
Signals Feedback
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Price
Indicator
Faster action’s recognition Requires the ability of the operator Subjective Greater sense of control
Is associated with a delay It’s automatic
Objective Sense of automatism
Trading Naked. FxForaLiving.com
Example 1: Breaking Trendline Trading example. Price pattern: Breaking Trendline. GBP/USD 1m
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Trading Naked. FxForaLiving.com
Example 2: Trend following Trading example. Price pattern = Trend follower. USD/JPY 5m
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Trading Naked. FxForaLiving.com
Example 3: Exhaustion Pattern Trading example. Price pattern = Triple Top. GBP/USD 60m
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Trading Naked. FxForaLiving.com
SUMMARY:
- Price observation is enough to know “how the market is behaving”. - Requires screen time to get used to recognize patterns. - Like any trading system requires special money management techniques, as you´ll allways find false signals.
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CONTACT:
-You can contact us: info@fxforaliving.com -You can download the slides registering at FxForaLiving.com and accessing to the Member’s area.
Formation services currently available in FxForaLiving: -The Madrid seminar. June, 20, 21. - Online Course + 1 year mentoring program
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