The forex market constantly is offering lower and higher quality trade setups. It is traders job to scan, recognize, select, enter and exit the ones with the best odds and reward to risk. Given the uncertain nature of the forex market, traders always face a dual choice -- high probability or high profit. The shorter you set your amplitude goals the higher the probability that you will achieve your target. On the other hand if your amplitude is long than you stand chance of making high profits albeit at a much lower probability rate.
Most forex traders rely on technical analysis books written for stock, futures, and option traders. However, long before computers and calculators, traders were trading naked. Naked trading is the simplest (and oldest) trading method. It's simply trading without technical indicators, and that is exactly what this book is about. Traders who use standard technical indicators focus on the indicators. Traders using naked trading techniques focus on the price chart. Naked trading is a simple and superior way to trade and is suited to those traders looking to quickly achieve expertise with a trading method.
Price action trading is the most common form of trading among-st professional traders. Price Action trading involves analyzing just the raw price action data on a clean chart with no indicators whatsoever. What so many traders fail to realize is that the indicators they are using in their trading are built from using old price data to give them a lagging indicator, whilst price action traders are taking the live price as it is continually being printed onto their charts to make high probability trade setups.
Framing price action helps a trader recognize high probability entry and exits. Framing is based on prior price action so while it cannot predict the future it can help build expectations so you know if the current room may be running out of steam or just beginning. There are a handful of ways to frame price action so you only need to decide which method works best for you. Price can often feel subject to the rules of nature like gravity or inertia. Therefore, when price drops to a certain level, you can often notice a bounce at some point. Framing price charts with channels can help you see when price may react or bounce and when an appropriate entry or exit may appear.
As traders, it helps to always expect a random outcome from our trades, even though we may have mastered a high-probability trading edge like price action. Considering all said before, traders should mind that there is no perfect trading signal or setup and that goes for all trading strategies and systems. Even if we have multiple factors of a perfect trend and a perfect price action setup, the trade can still lose. Thus, it is important to trade with these facts in mind while simultaneously making sure we do everything we can to only take the highest-probability trade setups.
