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A Frank Review Of John Templeton's Trading In The Buff Foreign Exchange Program
John Templeton, who has been involved in forex day trading for more than five years and who is the author of the Trading in the Buff forex signal system, soon discovered that all the confusing ways 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 random 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 money trading forex, if I don't even understand what I am looking at?"
This is when John arranged to take the bull by the horns and to figure things out for himself. No more buying into this or that forex system theory. He began by listening to what all the veteran traders had to say on the topic. And more than any other phrase that came out of their mouths was the phrase "price action." John was so appalled at himself that he could have kicked himself. "It was so obvious, I couldn't believe it."
When it comes to trading the forex market, John came to see that the trader has to make a decision between one of two ways to analyze the trade: either by using fundamental analysis or using technical analysis. Fundamental analysis takes into consideration all the psychological fundamentals that can bear upon a currency's change in the market. Things like the influence that the non-farm payroll numbers that are released once a month can influence the market, or how raising or lowering interest rates can influence a given currency pair.
When it comes to using technical analysis, this kind of trader considers that opening up the indicator menu on their charting platform will somehow or other tell them which pair of currencies to trade based on how the indicators read. From John's point of view these traders seem to think that -- rather than being familiar with price movement -- paying attention to charts permeated with lagging indicators such as RSI, MACD, and stochastics will direct them to the right trade to enter. After enduring years of losing trades following this same formula, John is convinced that following this path is a losing cause.
The one technical indicator that most failing contemporary traders don't make use of is price action. They're all expecting all their other indicators to fall in line. 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 realistically doing during a given trading period.
When, for example, you teach yourself to begin looking at price support and resistance levels, you are being shown actual statistics which are having an impact on the flow of the market. No lagging indicator will ever give you that kind of knowledge which will be supported for very long. You have to be able to see it directly from the market itself. This is what John is trying to hammer home in his forex trading program Trading in the Buff.
The name of his method references the removing of indicator based strategies and returning to fundamental price action indication. In other words, trading in the buff, without using the theoretical indicator window dressing that many traders learn to base their trading habits on. The theories sound good, but they don't always work.
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