Trading Naked is Overrated
I've traded using naked charts and pure price action. There is one problem I encountered. Trading naked charts actually have more subjective interpretation compared to using a simple moving average.
One of my objective in developing and creating my system was to eliminate as much subjectivity and discretion within the system. I discovered a flawed trading with naked charts.
Trading without any indicators leaves room for unnecessary error. Interpretations are slightly more subjective.
A classic abcd formation can occur above and below a moving average. A consolidation can also occur above and below a moving average. If you remove the moving average, you are left with a subjective interpretation whether the formation is within a given uptrend or a downtrend.
By adding a moving average, it will provide you an objective view of the price average within its calculations.
Trading pure price action and with naked chart leaves room for error. Trading naked charts won't solve your problems. Whether you are an experienced trader or not, you are subjected to an error in judgment. Learn to read price action, but don't dismiss the power of moving averages. Don't be arrogant in confidence that price action alone is the answer. Trading naked charts are overrated.
Trader Alen
Wednesday, April 20, 2016
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