NOTES on NAKED FOREX

Here are the important questions to answer as you record Market Biofeedback:
Where has the market moved since I entered my trade?
If I looked at the market now, would I take the same trade?
How do I feel about my trade?
What do I like about this trade now?
What do I dislike about this trade now?
On a scale of 1 (poor decision) to 10 (great decision), where would I rank this trade now?
If I were not in a trade now, would I take the opposite trade?
Is the market trending or ranging?
Is there a significant level of support or resistance nearby?
Is the trade confirmed by an indicator?
What is the risk to reward ratio?
How much capital am I risking?
Are there any significant economic releases that can impact the trade?
Am I following the trading plan?

Consistently profitable traders, otherwise known as expert traders, have one thing in common:
They test their trading systems.

Your job is to find out how you should be trading, and trade only what makes sense to you.

last-kiss trade
The last kiss is a specific type of breakout that suggests a breakout will develop into a
strong trending move.
Most of the failed breakouts will quickly jump back inside the consolidation box. However, a
true breakout—those trades that extend beyond the consolidation box and then keep travelling—
will often move back to the support and resistance zones for a retouch.

the big shadow

The big-shadow candlestick is much larger than the previous candlestick, the big-shadow
candlestick has a wide range, and the big-shadow candlestick is the largest candlestick the
market has seen for some time.
It may seem counterintuitive to enter a trade at a poor entry price, but if you decide to use
buy stops and sell stops to enter your trades, you will eliminate many losing trades from
your record. However, if the closing price is not in the correct location for the big-shadow
candlestick, the trade may fail miserably.
The big-shadow candlestick has a very good chance of success if the candlestick closes on the
high
The closer the closing price is to the high for the bullish big-shadow candlestick, the
better the trade signal. Bullish big shadows with closing prices near the midpoint of the
candlestick are very poor trading set-ups.
The more room to the left, the more likely this spot is a long-term high or long-term low.
When choosing a big-shadow trade, or any other reversal trade, look to the left of the
catalyst. If you see open space to the left, then perhaps the set-up will capture a critical
turning point in the market.
Big shadows must print on the zones.
Big shadows print at extreme highs or extreme lows.
Bearish big-shadow candlesticks have a closing price near the low.
Bullish big-shadow candlesticks have a closing price near the high.
Big-shadow candlesticks have wider ranges than the nearby candlesticks.
For bullish big shadows, the stop loss is placed a few pips below the low of the big-shadow
candlestick.
For bearish big shadows, the stop loss is placed a few pips above the high of the big-shadow
candlestick.
The very best big-shadow candlesticks have room to the left

wammies and moolah

The wammie differs from the standard double bottom because the depth of the touches on the
zone is critical. A wammie formation is identified by a second touch that is higher than the
first touch on the zone.
Once the market prints a strong bullish candlestick on the second touch, a buy stop is placed
above the high of this candlestick
First, the market has twice found support on a critical zone. Second, the market has made a
higher low. This is a critical characteristic of the wammie, because it suggests the downside
momentum may be dying out. Third, the market has printed a strong bullish candlestick on the
zone and the market has traded higher than this bullish candlestick, a strong hint that the
market may be ready to trade higher.
Kangaroo Tails
The long tail suggests that the market has extended too far　into a zone and is likely to
reverse.
the kangaroo tail with a very long tail suggests the market has become extremely excited
before reversing sharply. So, a kangaroo tail on a zone is a high-probability reversal candle
at a spot on the chart where the market has historically reversed time and time again.

Many failed kangaroo tails follow large candlesticks. The best kangaroo tails have a very
large range, often greater than the candlesticks immediately prior to the kangaroo tail.

Notice the large bearish candlesticks prior to the kangaroo tail, these candlesticks offer a
clue—downside momentum may remain in the market. Optimal kangaroo tails will have a large
range, usually greater than the range of those candlesticks immediately prior to the kangaroo
tail.
several red flags, so watch out for these:
Kangaroo tails with very short tails.
Kangaroo tails that do not print on a zone; these are not valid kangaroo tails.

Kangaroo tails preceded by giant candlesticks. This suggests that the trend may continue, and
the kangaroo tail may only be a pause.
When the open and the close of the kangaroo tails are not contained by the range of the
previous candlesticks

The Big Belt

Characteristics of the bearish big belts:
The opening price is higher than the closing price of the previous candlestick.
The opening price is near the candlestick high.
The closing price is near the candlestick low.
The big belt prints on an important zone.
The big belt should have room to the left.

Bearish big belts nearly always surface on the first trading day of the week. The market opens
much higher than the closing price of the previous week and then steadily trades lower,
eventually closing near the low of the candlestick.

The Trendy Kangaroo

Trendy kangaroos must stick out from the consolidation range. If the trendy kangaroo
candlestick does not have a tail that sticks out from the market pause, it is not an ideal
trendy kangaroo
The market is moving in a downtrend.
The market pauses and several candlesticks print in a small consolida-tion range.
A trendy kangaroo prints above the consolidation range.

7 Winning Strategies

You must have the deep desire to want to accomplish your goals, because without this desire,
your thoughts will not materialise i to action, and it is action that could transform your
goals to reality. To be a successful trader, you must be highly self-motivated, have a
concrete plan of action, and not be afraid of failure.

This fear of losing out is so strong that it then hypnotises you into frantically placing buy
orders, despite your having some doubts at the far back of your mind. The “How can I not be
buying (selling) when every one else is buying (selling)” mindset is extremely dangerous,
because your logical thinking faculty becomes replaced by fear, and when you trade
haphazardly, it can result in huge trading losses. It has even been suggested that the fear
of losing out is much stronger than the fear of losing one’s entire trading account.

10 Essentials
not bringing your bad habits to the trading table.
If it is in your character to break rules, then learning a new successful skill that can
change your financial future is useless. You will simply break the rules and self-destruct.

The truth is, changing little unproductive habits makes a huge difference to one’s success.

Learning to trade, and being successful at it, requires that you follow certain rules.
Ignoring the rules will cause you trouble when you are trading

The greatest reward comes to those who develop the art of hearing what is not said.
People who speak before they think are often branded as ignorant and annoying; few are
respected.
When it is time to trade, you must think before you act. If you act before you think and make
mistakes, your subconscious mind will take over and record all your ignorant actions and
subconsciously create bad trading habits.
Believe it or not, successful business is nothing more than making and executing unemotional
decisions that make economic sense
Thinking through problems unemotionally allows you to stay focused on achieving long-term
happiness and success.
When something doesn’t go according to plan or doesn’t go your way, do you throw a temper
tantrum and have a “mental meltdown”? Unsuccessful people usually do.
A constructive ego keeps you focused on all the details necessary to avoid any and all storms
as you sail through life.
The law of attraction stipulates that whatever we think about, those thoughts will radiate
out of our being and create circumstances and events and attract people that align with our
thoughts. When we think positive thoughts, that positive mindset will radiate out of us,
creating positive circumstances and positive events in our life and, as a result, will
attract positive people into our lives.

the optimist believes there is an answer to every question and a solution to every problem,
whereas the pessimist believes most questions have no answer and most problems are
unsolvable.
Failure is not falling down; failure is staying down.
but successful traders will make more money than they lose. Successful traders spend no time
worrying or thinking about their losses; they stay focused on the next opportunity that is
knocking. People that manage their poverty or mediocrity are so busy holding onto their past
that they can’t grab onto future opportunities.
Most people in life are rainbow chasers; they set new goals almost daily. Most of the time
their new goals have nothing to do with yesterday’s, last week’s, or even last month’s goals.
As a result, they never move forward in any one direction.
If you do not create goals as you learn to trade, you will not have any recognizable
milestones of achievement.
but beginning with a clear goal in mind will keep you on track to reach your goals even after
you hit a detour.
Because inner and outer trend lines form on all time frames, you need to look at a daily
chart, where if you happen to see an inner and an outer uptrend line, the inner uptrend line
will represent the most recent up movement for that time frame. The outer uptrend line
represents the up movement over the past couple of months. If you look at an hourly chart,
the inner uptrend line represents the up price movement over the past few hours, whereas the
outer uptrend line represents the up price movement over the past couple of days. It is
always best to compress your charts in the time period you are looking at to find any
additional outer trend lines, or the long-term trend line.

you need to look at a daily chart, where if you happen to see an inner and an outer uptrend
line,

Price Action Market Traps

Range will have multiple failed Breakout attempts before the real breakout.
Second, alternation between bullish and bearish strength shows both sides are active.
Third, Dojis and Overlapping price action. When you start to see lots of Dojis and bars are
overlapping (hint: sideways action), market is probably ranging. The Dojis are the early
signs for Range formation.
Never initiate position in the middle of a Range!! The reward is too small with big risk. Bar
E is a good setup bar, but horrible follow-ups, a Doji.
Fourth, the 20 EMA. EMA is arithmetic calculation. When price is trending strong and fast,
it’s hard for EMA to catch up with the calculation. Therefore, in a strong trend, there is
distance between EMA and bars. when a Range is about to breakout, watch the price action
closely, you will notice the EMA is somehow holding the bars and push them out to the
breakout direction.

Reversal
First criteria: break of trendline or control of the EMA. Breaking the trend line does not
guarantee reversal, but it's a very strong sign of potential trend change! It shows the
strength and determination from the countertrend side. But be extra careful when dealing with
the 1st trendline break or EMA break. They are rarely successful reversals,
I prefer to countertrend when I see clear dominance of the EMA. I want to see those
countertrend traders showing strength.
Second, after breaking the trendline or EMA, strength of the follow ups. In a reversal
uptrend, when you see one strong bar closed above EMA, but the follow ups are horrible. They
are either Dojis or small body bull bars, just wonder around the EMA without any clear
direction. That's a warning that this reversal might fail! Bearish sideliners are watching
the EMA closely,
Often countertrend traders would push the price beyond the EMA for enough distance in order
to trap buyers, then flush the price down. If you see small body bear bars, or bear Dojis,
that’s your confirmation that sellers are losing their interest to continue. Nothing is
written in stone.
Third, watch the Higher High or Lower Low after the break. A trend is strong only if it makes
Higher High in an uptrend and Lower Low in a downtrend. When the trend is weak, like a
channel or with frequent pullback, then reversal is more likely to happen.

The bar which broke the EMA and trendline is a strong bar in size and closed high. There are
7 consecutive bull bars after the Higher Low and 4 bars closed above the EMA, that’s what I
mean by taking control of EMA. It adds up the probability for the successful reversal.

Randomness is irresponsibility in mirror. In trading, you can't afford to be irresponsible.

Always wait for that "a bit late" confirmation, it might cut your profit less, but it will
help you to think objectively and rationally.
Sideliners are usually successful because they are very patient for the best setup. In "Price
Action trading: Bar by Bar" Al brooks wrote: "the hardest thing for a trader is to wait for
the best setup".
There is an axiom for support/resistance zone: the more touches it has, the stronger it will
become. I find that quite untrue for intraday traders.

Often the strong moves are ignited from the smallest bars.

Every trader wants to catch the big move. The key is Location, Location and Location! You
don’t want to enter after every small bar, the context plays an important role here.

1. Buying at top of the range or selling at bottom of the range is very dangerous and should
be avoided.
2. Stop loss hunter, First, after market has moved in one direction for a while, it tends to
test the entry price. For the public traders, it's important to have faith in your judgment,
trust your stop. Don’t move it too early. Trend will go much further than you think, just
give it time and room to develop itself.

3. The Giant Trap-First, when you see a giant bar as a breakout bar for any congestion or as
a breakout bar to initiate a new trend, it usually represent positive strength. Expect
follow-ups. Second, never trust giant bars in ranges. If a giant bar is taking all the space,
there is actually no more room to move, price has to reverse. The range lost its purpose of
offering an environment for price to rotate. Therefore, when you see a giant bar in the
middle of the range, don’t enter! It’s a trap, fade it! In fact, most giant bars inside of
the range are countered instead of being followed up.

4. Failed breakout trap - You don’t enter a position simply because there is long wick, but
that wick is giving you a warning: a sign of potential reversal.Second, the follow-up (green-
red alternation). Often you will enter a position after a very strong bar, but there is
simply no follow-ups. Often price will breakout the levels and carry one for a short while,
then fail and return back to the original Range. Even the breakout is temporarily successful,
still remain alert for any signs of failure. Most temporary breakout will fail within 3-5
bars and rotate back to the original range.

5. Back to back trap - For example, while the bar is forming, first it traps sellers by going
down for 1-2 ticks, then immediately reversed up to trigger buyers and sellers’ stop-losses.
As you thought you were on the right track to be a buyer, it surprise you again by going
downward on the following bar. It’s usually shaped as an outside bar: a bar which engulfs the
previous bar. “Back to Back” Trap happens often in pullback and congested areas. When you see
a double-trap bar, the best thing to do is wait! Outside bar is never a good entry bar. The
best setup would be a tiny bar either at the top or bottom corner after the trap bar. That is
your signal bar to enter.
If market failed to go down, then it failed to continue up, consider that outside bar as one-
bar trading range, fade the extremes. A Double Failure is a very reliable signal and it
usually provides great trading opportunity. When the context is right, but the entry bar or
signal bar is bad, WAIT! If the signal bar or entry bar is awesome, but un never initiate any
position of any outside bar, wait for the next bar.der wrong context, it’s usually a trap.

It takes two moves to break anything. Any break, such as break of EMA; break of Prior
High/Low or break of range boundary, is not an authentic break by one bar alone. Any break
has to be confirmed by 2 bars at least, meaning two consecutive bars closed below/ above an
important level. Any single bar break followed by a counter bar is a trap indeed.
http://www.tradingsetupsreview.com/
Technical Analysis of Stock Trends, Tenth Edition (Robert D. Edwards, John Magee, and
Japanese Candlestick Charting Techniques, Second Edition (Steve Nison)
http://www.tradingsetupsreview.com/beginners-guide-reading-price-action/
Pring on Price Patterns : The Definitive Guide to Price Pattern Analysis and Intrepre
Frost and Pretcher’s Elliott Wave Principle: Key To Market Behavior
http://www.tradingsetupsreview.com/trading-engulfing-candlestick-pattern-market-struc
http://www.tradingsetupsreview.com/instantly-improve-trading-strategy-support-resista
http://www.tradingsetupsreview.com/4-ways-trade-channel/
Volume spread analysis - http://www.amazon.com/gp/product/1491249390/ref=as_li_ss_tl?
http://www.tradingsetupsreview.com/tag/price-action/
http://www.tradingsetupsreview.com/price-action-trading-primer/
http://www.tradingsetupsreview.com/price-chart-types/
http://www.tradingsetupsreview.com/3-key-principles-of-technical-analysis/
http://www.tradingsetupsreview.com/pinocchio-bar-trade-setup-pin-bar/
http://www.tradingsetupsreview.com/9-ways-simplify-day-trading/
http://www.tradingsetupsreview.com/get-rid-overtrading/
http://www.tradingsetupsreview.com/trade-price-action/
positive expectancy and probabilistic mindset - http://www.amazon.com/gp/product/0735
http://www.tradingsetupsreview.com/5-checks-start-day-trading-living/
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http://www.tradingsetupsreview.com/4-day-trading-strategies-profit-trapped-traders/
http://www.tradingsetupsreview.com/three-bar-reversal-pattern-day-trading/
http://www.tradingsetupsreview.com/improved-three-bar-pullback-pattern/
http://www.tradingsetupsreview.com/hikkake/
http://www.tradingsetupsreview.com/three-bar-inside-bar-pattern/
http://www.tradingsetupsreview.com/popgun-bar-pattern-trading-setup/
http://www.tradingsetupsreview.com/nr7-trading-strategy/
http://www.tradingsetupsreview.com/inside-daynr4/
http://www.tradingsetupsreview.com/inside-inside-bar/
http://www.tradingsetupsreview.com/price-action-trading-strategies/
http://www.tradingsetupsreview.com/candlestick-pivot-point-day-trading-strategy/
http://www.tradingsetupsreview.com/candlesticks-trading-strategy-crows-soldiers/
http://www.tradingsetupsreview.com/4-types-of-basic-trade-setups/
http://www.tradingsetupsreview.com/10-price-action-bar-patterns-must-know/
http://www.tradingsetupsreview.com/candlestick-patterns-with-a-moving-average/
http://www.tradingsetupsreview.com/10-types-of-price-charts-for-trading/
http://www.investopedia.com/terms/b/breakawaygap.asp
http://www.tradingsetupsreview.com/10-price-action-candlestick-patterns-must-know/#mo
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http://www.investopedia.com/terms/s/symmetricaltriangle.asp
How to Make Money in Stocks: A Winning System in Good Times and Bad, Fourth Edition.
Technical Analysis and Stock Market Profits by Richard Schabacker
Technical Analysis of Stock Trends by Edwards, Magee, and Bassetti
http://www.tradingsetupsreview.com/template-simple-day-trading-strategy/
http://www.tradingsetupsreview.com/tag/volume/
http://www.tradingsetupsreview.com/5-ways-to-exit-your-trade/
http://www.tradingsetupsreview.com/trade-fibonacci-numbers/
http://www.tradingsetupsreview.com/anchor-zones-trading-strategy/
http://www.tradingsetupsreview.com/natural-number-trading-method/
http://www.tradingsetupsreview.com/intraday-trend-trading-price-action-trade-price/
http://www.tradingsetupsreview.com/category/chart-analysis/
http://www.tradingsetupsreview.com/trading-macd-inside-bar/
http://www.tradingsetupsreview.com/bulkowskis-retrace-day-trading-setup/
http://www.tradingsetupsreview.com/moving-average-channel-day-trade/
Channel Surfing: Riding the Waves of Channels to Profitable Trading
http://www.tradingsetupsreview.com/gimmee-bar/
http://www.tradingsetupsreview.com/yum-yum-continuation-pattern-trading-setup/
http://www.tradingsetupsreview.com/quick-trade-using-linear-regression-channel/
http://www.tradingsetupsreview.com/simple-day-trading-strategy-bollinger-macd/
https://gum.co/PiAb
ds, John Magee, and W.H.C. Bassetti)

alysis and Intrepretation (Martin Pring)

attern-market-structure/
egy-support-resistance/

90/ref=as_li_ss_tl?ie=UTF8&camp=1789&creative=390957&creativeASIN=1491249390&linkCode=as2&tag=

com/gp/product/0735201447/ref=as_li_qf_sp_asin_il_tl?ie=UTF8&camp=1789&creative=9325&creativeA

-reversals/
-trapped-traders/

ding-strategy/
rows-soldiers/

ing-average/
terns-must-know/#morningstar
sis:chart_patterns:flag_pennant_continu

d, Fourth Edition.

tion-trade-price/

ading-setup/
sion-channel/
linger-macd/
0&linkCode=as2&tag=tradseturevi-20

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