What is Naked Forex Trading and Does it Work?

24 Jul What is Naked Forex Trading and Does it Work?

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If you’ve ever come across the term ‘naked forex trading’ in the past, you may have been (understandably) intrigued. Needless to say it is not a literal term, but is used to describe a certain style and technique of forex trading.

Trading Without Indicators or Clutter

Modern day forex traders tend to use numerous different indicators to attempt to figure out whether the price of a currency pair will move up or down. As such, the charts that they normally look at are cluttered with tons of additional information such as moving averages, stochastic analysis, MACD indicators, and so on.

In contrast to that a ‘naked’ chart would be simply a very basic price chart of the currency pair without any of the additional accoutrements that normally go along with it. And ‘naked forex trading’ involves trading based on that basic chart – without having to deal with indicators and complex analytical tools.

Is Naked Trading Easier?

On one hand it is easy to see why naked forex trading sounds appealing – especially to beginners who have little or no experience in dealing with financial indicators. It promises a ‘simplified’ approach where less time is spend learning how to read a forex graph that is packed to the brim with additional analysis.

That being said it is important to note that ‘naked forex trading’ does involve some analysis as well. Normally it involves analyzing the ‘candlesticks’ in the forex graph to find swing points and then using that analysis to predict the next movement of the market. As a result you will actually end up using a ‘manual’ indicator of sorts.

Does it Work?

Despite the fact that it may seem like a slightly less reliable way of trading on the surface, the truth is that many people advocate naked forex trading. Some even believe that removing the reliance on indicators that complicate the analysis of forex trading to be a good thing that can help you to make better trades.

While it is still hotly debated whether or not that is true, at the end of the day it certainly doesn’t hurt to use naked trading techniques in conjunction with conventional indicators either. Looking at the forex price movements through different methods can sometimes be helpful, and if they align then it may indicate a high probability that the market is going to move in a particular direction.

Of course the best way to see whether or not naked forex trading would be a good fit is to try it out on a platform such as www.etxcapital.co.uk. It will give you the means to trade on up to seven currency pairs and leverage your funds up to 200:1 so that you can really take in an impressive profit from your trades. In total it will give you access to over 50 different currency pairs too. On your part all you need to do is use the techniques and analyze the price graphs of those forex pairs to see whether or not you can predict how it is going to move in the near future.

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