What’s Forex ? Quick Recap
“Forex” is an abbreviation for “FOReign EXchange.” See also Wikipedia definition :
The foreign exchange market (forex, FX, or currency market) is a global decentralized market for the trading of currencies. This includes all aspects of buying, selling and exchanging currencies at current or determined prices. In terms of volume of trading, it is by far the largest market in the world.
For many reasons, the Forex Market is quite unique and attractive :
- it never sleeps (almost). It operates 24 hours a day except on
- it has a huge trading volume (in fact it’s the largest asset class in the world leading to high liquidity)
- it offers low margins of relative profit compared with other markets of fixed income
- it enables traders the use of leverage to enhance profit and loss margins and with respect to account size
- it’s accessible anywhere in the world
- there is a variety of factors that affect exchange rates
Automated Forex vs Naked Forex
- A trader who uses indicators uses Automated Forex.
- A trader who examines the price charts uses Naked Forex.
Naked forex focuses on the market whereas automated forex focuses on analyzing the indicators.
This is what my chart looks like, for the EUR/USD pair, 5 min charts. It’s clean and easy to read. No messy indicators that cover the candles.
Now below is an example of what an automated trader would use : as many indicators as possible, to “help” him trigger the perfect trade. If your charts look more like the one below than like my naked chart (even if you are using less indicators) you are an automated trader.
What’s an Indicator?
- a thing that indicates the state or level of something.
- a device providing specific information on the state or condition of something, in particular:
Many traders use technical trading indicators to help them identify high probability trade entry and exit points.
Here are some of the most common ones, but there are thousands of them (some better than others lol)
- Moving Averages
- RSI (Relative Strength Index)
- MACD (Moving Average Convergence & Divergence)
The pros & Cons of Automated Forex
- automated trading makes forex look easy (but it’s not)
- indicators look helpful (but they’re not)
- you can get literally thousands of indicators for free (but then you will want more and more and more and more and more… and go crazy because none of them will “work”… )
- they’re based on mathematical algorithms
- indicators lag (just because they are based on maths doesn’t mean they are quicker than what the candles themselves are telling you the moment they appear…) Indicators can’t tell the future lol.
- indicators repaint (they appear and then they disappear but it’s too late, you’ve already triggered the trade lol)
- indicators are not as efficient as YOU
- indicators don’t focus on the market, they’re just mathematical formulas, and as advanced as they are… they are not perfect !
- they make you dependent on them : you have no idea what to do without your indicators…
- they make you get stuck in the “cycle of doom” (the pursuit of the “perfect”system)
- they make the charts difficult to read, you end up focusing on the indicators (the little arrows, lines, zones and dots) and completely forget about the candlesticks… but hey! may I remind you that you earn money FROM the candlesticks lol
The Pros & Cons of Naked Forex
it’s clear, not messy (unlike those horrible automated charts that give me a headache)
- your trading relies on you and you only
- if you win it’s thanks to you
- if you lose it’s because of you
- you can’t blame an indicator for losing your trades
- it’s actually easier to read than analyzing a lagging or repainting indicator
- it focuses on the market
- it’s real time trading
- it’s less stressful because you actually know what you are doing! and not just hoping the indicator won’t mess up “this time” lol…
- well it requires time and hard work, you will have to learn to become a naked forex trader …
… but is that really a con if it eventually turns you into a millionaire? hmmm lol 🙂
My #1 Recommendation for Naked Forex
If you are struggling to earn money with Binary Options and/or Forex and you have accumulated an unbelievable number of indicators, you might be caught in what Walter Peters calls the “Cycle of Doom”. Therefore I highly recommend you read the following book :
→ High-Probability Techniques for Trading without Indicators : Naked Forex ←
This amazing book is 290 pages of gold, solid knowledge and advice on how to go from a terrible trader to an expert trader.
It has completely changed how I saw myself as a trader and how I looked at the charts. It’s got a really awesome part on the trading psychology and top advice on money management. It also offers simple and highly successful trading systems and you’ll decide which one suits you best.
If you have to read one book, to learn from one method, it’s this one! 🙂
Get the book now – Click here
About the authors :
- Alex Nekritin
Alex Nekritin has been a professional trader for more than 10 years and is the founder and president of TradersChoiceFX.com. TradersChoiceFX is a forex-introducing brokerage firm that is able to enhance its clients’ forex trading success by matching them up with the best fit forex dealer for them.
Alex’s specialties include risk management and system development. He has a degree with a concentration in investment banking and derivative instruments from Babson College in Massachusetts.
- Walter Peters, PhD
Before becoming a professional trader, Walter Peters worked as a clown, magician, online market researcher, and jury consultant. Dr. Peters has a PhD in experimental psychology and an extensive background in statistics.
As a naked forex trader, Dr. Peters enjoys trading simple trading sys- tems. He has a keen interest in trading psychology and how trading beliefs yield trading results. He trades with forex traders around the world on his website www.fxjake.com a place for naked traders. When he is not trading, Dr. Peters enjoys spending time in the ocean and talking about trading.
Perhaps these are more for you ! :
The Forex Daily Trading Course
Trade Forex System Course With Over 140 Videos
- Module 1 : forex basics
- Module 2 : Forex indicators
- Module 3 : Combinations
- Module 4 & 5 : Trading Naked
- Bonus Module 6 : forex Q&A session
Automated Forex Tools
Automated Forex Tools is specialized in developing Forex robots (expert advisors). They are used by traders as tools for buying and selling currency in the popular Forex market. The Forex market itself offers infinite opportunities – for that reason, our team’s main goal is to help Forex traders achieve incredible results by using our Forex robots.
That’s it folks! Happy trading! And remember, don’t invest more than you can afford to lose