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Naked Trading: More Than Just Recklessness

Naked Trading is not about reckless trading or relying solely on gut feelings. Instead, Naked Trading is a trading strategy that relies on chart analysis without using technical indicators. In Naked Trading, traders rely on candlestick patterns, chart patterns, and buyer-seller sentiment data to make trading decisions.


Misconceptions sometimes arise when someone mistakenly believes that Naked Trading is about reckless trading or relying on feelings without a strong analytical basis. The story of a trader winning a competition but experiencing a margin call afterward is not an example of true Naked Trading.

Naked Trading as an Analytical Strategy

In reality, Naked Trading involves careful analysis and accountable information. There are three main things that Naked Trading practitioners can utilize:

  1. Observing Candlesticks: Candlesticks provide crucial information about price movements, market sentiment, and potential reversals or trend continuations. Various candlestick patterns, such as Pin Bars, can provide useful signals.
  2. Reading Chart Patterns: Patterns formed by candlesticks on charts can form patterns like Double Tops, Head and Shoulders, Triangles, and more. Identifying these patterns helps understand price movement tendencies.
  3. Buyer-Seller Sentiment Data: Although not always accurate, buyer-seller sentiment data can be obtained from brokers or trading service providers. Additionally, market sentiment can also be directly seen on price charts through candlestick patterns and body and shadow size comparisons.

Not the Same as Reckless Trading

Naked Trading is not a form of reckless trading because it still involves systematic analysis based on information available on the chart. In Naked Trading, traders still apply measurable trading strategies and plans.

Naked Trading is not about reckless trading or relying solely on gut feelings. Instead, it is an analytical approach that uses plain charts as the basis for decision-making. By leveraging candlesticks, chart patterns, and sentiment data, Naked Trading practitioners can make more informed trading decisions. It is important to understand the difference between Naked Trading and reckless trading to avoid misconceptions that may arise.


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