Naked Trading: Why it is Better to Strip Down

Filed under: Learn Forex Trading |

 

Okay – so it is a shamelessly sensationalized title with the sole intention being to get your attention. But hey, if you’re reading this, then it must have worked!

 

What all this is about is doing away with all of the clutter that beginners to forex trading tend to put on their charts. It is amazing when you see the charts that beginners use to trade off. They are often overlaid with so many indicators, notes, and lines, that it is often difficult to see what price is actually doing. This causes traders to lose sight and perspective, to be unfocussed, and to not really see the forest for the trees, so to speak.

 

So what should you do to overcome this unfortunate affliction? Well, that is easy. Strip down (no, not literally, although that may well work as well!) your charts – take everything off them except for a couple of moving average (an 8-day EMA and a 21-day EMA works well on daily charts). Then plot your support and resistance areas with nice and clean horizontal lines. It also helps to format a candlestick chart so that the candles are black and white with a plain, white background. This cleans things up and gets you looking at things more clearly.

 

What you are left with is clarity. You really have all of the information that you really need with this, and if you need any added confirmation, you can bring up an RSI or a MACD and then take it off again when you are finished. Try it, and you will be amazed at how much your trading improves. Keep things simple and clear, do away with all of the complicated indicators, which are lagging anyway; and focus on price action at significant areas of support and resistance.  It is a much better way to trade.

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