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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 complex systems that traders use to pick a winning forex trade were only muddying the field for him. "I was basically just an inanimate object waiting for haphazard lines to cross, signaling me that I should open or close a trade. Then it dawned on me. How in the world could I make a profit trading forex, if I don't even comprehend what I am looking at?"
This is when John decided to take the bull by the horns and to figure things out for himself. No more accepting this or that forex system theory. He began by heeding what all the experienced 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 aghast at himself that he could have kicked himself. "It was so obvious, I couldn't believe it."
When it comes to trading the foreign currency market, John came to see that the trader has to take a decision between one of two ways to evaluate 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 have, or how raising or lowering interest rates can impact a given currency pair.
When it comes to using technical analysis, this kind of trader thinks that opening up the indicator menu on their charting platform will somehow show them which currency pairs 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 full with lagging indicators such as RSI, MACD, and stochastics will direct 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 failed present day traders don't utilize is price action. They're all waiting for all their other indicators to line up. For this kind of trader, the only important thing is what his static indicators are showing him, and price becomes secondary or even irrelevant. The only thing wrong with using lagging indicators the same as these is that they do not supply the trader a clear vision of what the market is actually doing during a given trading period.
When, for instance, you discipline yourself to begin looking at price support and resistance levels, you are being shown actual statistics which are influencing the flow of the market. No lagging indicator is ever going to give you that kind of knowledge which will last for very long. You have to be able to see it instantly from the market itself. This is what John is attempting 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 are taught to base their trading habits on. The theories sound good, but they don't always work.
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