In this episode of Truth About FX, Walter talks about trading naked using price action and is this something that beginners should dive into. And is it really possible to profit from price action techniques? According to Walter, if you don’t have experience yet, there are a few reliable books you can read that can give you a “feel” of pit floor experience. You will also learn about this one thing that you should NEVER do when it comes to listening to your beliefs and biases.

Hugh also shares his take on drawdowns and returns and why you should keep a good eye on these.

Download (Duration: 08:31 / 19.5 MB)

In This Episode:

00:35 – doubting the viability 01:57 – old bucket shops 03:28 – the path 05:02 – focus on your belief 07:23 – money is locked up

Tweetables:Leverage your beliefs

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Announcer: Sometimes, forex trading is a wild and wooly place to be. That’s why Hugh is here, to post your questions to Walter, the naked forex guy. Hugh’s got questions and Walter’s got the answers. Here at the Truth About FX Podcast.

Hugh: Hi, Walter. Somebody wrote in and they’re asking: I came across some of your materials and read your book. I’ve been trading forex off and on for a couple of years, while I’m profitable, I find myself doubting the viability of a pure price action system. I’ve been searching the internet for people who really made it using pure price action but I’m not able to find any of them.

I went to a several Greg Secker “Market Resist” books and I’m a little confused. Those people mentioned are absolutely brilliant people even though they’re not able to generate more than 20% annual returns.

What are the chances of an inexperienced retail trader doing well? Furthermore, most of the traders make use of a mix of fundamental, sentiment and technical analysis to create bigger trades. Aside from the liquidity advantage, is it really possible for you to, for retail traders to profit using pure price action techniques? It’s a lot.             

Walter: Yeah, there’s a lot. So I would encourage you to go back and look at the traders in the Market Wizards and the New Market Wizards books that have the pit floor experience. Because, what they’re doing is essentially very, very closely related to what the price action traders do.

Admittedly, it’s probably not the same but they look at, so there are traders for example that can look at order flow. Sometimes, that’s as simple as if you read the old “Reminiscences Of A Stock Operator” book which is the thinly veiled Biography of Jesse Livermore.

He talked about how he can go into the old bucket shops so to speak where they would which are basically, today’s forex book or CD equivalent of the old bucket shops. What they would do is, what he would do is, he would listen to the ticker.