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A Frank Assessment Of Forex Trader John Templeton's Trading In The Buff Foreign Currency System
John Templeton, who has been an investor in forex day trading for more than half a decade and who is the creator of the Trading in the Buff forex signal system, soon found out that all the challenging systems that traders use to pick a profitable forex trade were only muddying the field for him. "I was basically just an inanimate object waiting for haphazard lines to cross, informing me that I should open or close a trade. Then it dawned on me. How in the world could I make money trading currency exchange, if I don't even apprehend what I am looking at?"
This is when John determined to take the bull by the horns and to reason things out for himself. No more buying into this or that forex training theory. He started by heeding what all the professional traders had to say on the topic. And more than any other slogan that came out of their mouths was the phrase "price action." John was so appalled at himself that he could have kicked himself. "It was so obvious, I couldn't believe it."
When it comes to trading the forex market, John concluded that the trader has to take a decision between one of two ways to examine the trade: either by using fundamental analysis or using technical analysis. Fundamental analysis takes into consideration all the psychological fundamentals that can act upon a currency's tendency in the market. Things like the influence that the non-farm payroll numbers which are released once a month can influence the market, or how raising or lowering interest rates can effect a given currency pair.
When it comes to using technical analysis, this breed of trader thinks that opening up the indicator menu on their charting platform will somehow or other show them which pair of currencies to trade based on how the indicators read. From John's point of view these traders seem to think that -- rather than comprehending price movement -- paying attention to charts permeated with lagging indicators such as RSI, MACD, and stochastics will lead them to the right trade to enter. After surviving years of losing trades following this same formula, John is persuaded that following this path is a losing cause.
The one technical indicator that most failing contemporary traders don't make use of is price action. They're all waiting for all their other indicators to line up. For this kind of trader, the only substantial thing is what his static indicators are showing him, and price becomes secondary or even irrelevant. The only thing wrong with using lagging indicators like these is that they do not provide the trader a clear picture of what the market is actually doing during a given trading period.
When, for example, you discipline yourself to begin considering price support and resistance levels, you are seeing actual statistics which are influencing the flow of the market. No lagging indicator will ever give you that kind of knowledge which will be supported for very long. You have to be able to see it immediately from the market itself. This is what John is endeavoring to hammer home in his currency trading system Trading in the Buff.
The name of his course references the shedding of indicator based strategies and returning to fundamental price action indication. Put another way, trading in the buff, without using the theoretical indicator window dressing that many traders learn to base their trading habits on. The theories sound good, but they don't necessarily work.
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