What’s The Difference Between Naked Trading and Price Action Trading?

Hello Traders,

As you’re surfing the Internet looking for information on Forex trading you’ve most likely come across the words: Naked Price Action Trading.

Now when you look at it on the surface it looks like a single phrase, however, as a teacher of this methodology it would be wise at this junction to tell you that there is a real distinct difference between trading Naked Trading and trading using Price Action. The two methodologies may often use similar terms or phrases like Kangaroo tails (or as “some” the Price Action Traders call them) Pin Bars but their style of trading the Forex charts are dramatically different. I get to that in a moment.

Let me first say this when I used the term: “Naked Price Action Trading” I would like you to (for a moment) consider this, consider that Naked Trading and Price Action Trading as a marriage of the two methodologies.

For the most part both methodologies trade without Indicators, Oscillators, Fibonacci, MACD, RSI, Stochastic other thingamajigs all over a Naked Trader’s Forex charts. Why you ask? Because it is a known fact that these things lagging or give you delayed information. They will often either get you into or out of trades late. By trading Naked using the combine methodology of Price Action you are trading live based on the actual current Market conditions. Should there really be any other way to trade Forex? As a Naked Price Action Trader I don’t need to try and predict the market parse, this methodology allows me to react to the Forex market based on live/current information.

One of the main, clear and cut difference between Naked Trading and Price Action trading is that as a Naked Trader we’re constantly trading off of support and resistance lines/levels/zones. You won’t find them (support and resistance lines) in Price Action trading. They simply don’t exist. Now as a Naked Trader I find that highly strange. As I mentioned before as Naked Traders we don’t use Indicators, however, we do use current (and in this case) historic information which are what we call “Support and Resistance” lines, levels or zones (S & R) whereas the Price Action trader is trading off of simple “Price Action” candles.

Think of support and resistance levels/zones as grid lines on a map:

cogrids

Take a look at this which discusses the difference between the two:

Did you notice the clear difference? You wouldn’t if you’re a Price Action Trader.  I discuss this issue in GREATER detail in my Online Forex Trading Courses.  The gold is in the various lines drawn on the Naked Price Action Trader’s chart. Those lines on the chart are “historic” areas on the chart wherein the Forex Market has “repeatedly” been to previously and/or had some sort of significant reaction.

Here’s a simple definition of what Support and Resistance is:

  • A Support level is where the price tends to find support as it is going down.
  • A Resistance level is where the price tends to find resistance as it is going up.

A Naked Trader get his/her edge in finding “High Probability” trades (trades that have historically repeated performed well over and over again) either on, near or at the key support and resistance levels/zones. Why? It’s simple. The Forex market (historically) has repeatedly returned to these key support and resistance levels/zones on the Naked Price Action Trader’s charts. Whereas no such levels exist on a Price Action Trader’s charts. They (Price Action Traders) are simply trading off Kangaroo Tails (Pin Bar) Fakey’s, Engulfing candles and other candlestick patterns. They (Price Action Trader’s) do use other known patters such as Flags, Pennats and “Head and Shoulders”.

This article seems to be getting somewhat long winded (and that was to be expect) because this particular topic is in fact vast. So with that said I will continue on in part 2 and possibly even a part 3 as to the “Difference Between Naked Trading and Price Action Trading”.

Until then: If you found this article helpful I would appreciate it if you would please consider sharing it  with a friend who will also find it helpful and thank you!

Have a magnificent day on PURPOSE!

Survey: You’re In a Trade and You Suddenly Get a Reversal Signal, What Do You Do?

You’re in a Forex trade and you suddenly get a reversal signal what do you do?   (click the image)

mix signals3


What do you do when you’re in a Forex Trade and you get a reversal signal?

Hello Traders,

Today I want to answer a question that I get asked all of the time
and that question is:

which way to go

Q: What do you do when you’re in a Forex Trade and you get a
reversal signal?

A: This is a GREAT question and the short answer is: “It depends”.
It depends on the type of reversal signal and where the reversal signal
prints on the chart i.e. which/what type of support and resistance level/zone.  If the reversal signal prints on a minor zone, then my back-testing method and my Forex system/style of trading leaves me with the option of doing nothing.  Why? Because  you often find reversal signals appear on minor zone all the time. It is a part of trading. The Forex Market fluctuates ALL the time.  For the most part there really isn’t any need to worry about this.

Now if the reversal signal appears on a major support and resistance level/zone then you only have one viable option, and that is: “Follow YOUR Forex Trading Plan Rules“.  If you don’t have a Forex Trading Plan. I would highly suggest that you stop trading live and then develop and/or write one. I teach this in my  Forex Trading Courses.

If you want to know what “I” do as a Professional Full-time Forex
Trader look at this short video:

BTW there is an exception to my rule ,and when it happens you need to get out of your trade as quick as you can.  If you want to see what this exception is you’ll have to take one of my Forex Trading Courses. to find out.  See you on the other side!

challenge2

 

 

How Do You Judge The Success Of Your Forex Trades?

This week after achieving 1, 242 pips off of 3 trades
I was hit with a barrage of emails and comments stating
that pips aren’t a good way to judge the success of a
trade (I may agree or disagree, read on to find out
why).

What-do-you-think

So I thought I would open up a survey and ask you:
How do you judge the success of your trades?

It’s 1 question and it takes less than 30 seconds
to give your opinion. Chime in and let me know.
I will write an official response to this question once
I have received a substantial amount of responses from
the survey.

Take the survey

Have a magnificent day on PURPOSE!

 

http://app.getresponse.com/survey.html?u=BWyKo&survey_id=427602

Weekending Review: November 16, 2015

Here’s a video update on this weeks trades.   When the markets are chopping  and offers you uncertainty you must have an alternative to supplement your trading.  I did just that by moving to higher time frame charts.  Here are the fruits of those efforts.  We made over 1,242 pips and did not lose a single trade in the last 3 weeks Naked Price Action Trading at it finest.