Trading naked means trading without using any technical indicators with only price action. The best technical indicator is the price action and this is what the naked traders believe in. Naked traders use the familiar concepts of support and resistance, pivot points, swing highs, swing lows, tops and bottoms without using any technical indicators. naked cams
If you have been trading for a while, you must be familiar with the fact that an up bar represents a bar with a higher high and a higher low than the preceding bar. The close is higher than the open. Up bars are an indication of an uptrend. However, on the last bar of te uptrend, the close will be lower than the open as there will be more sellers than the buyers in the market meaning the trend is about to reverse itself.
Similarly, a down bar represent a bar with a lower high and a lower low with the preceding bar. The close will be lower than the open. Appearance of a down bar means a down trend. However, on the last bar of the down trend, the close will be higher than the open as there will be more buyers in the market than the sellers at that point in the market. This will be an indication of an impending trend reversal.
Now in case of an uptrend, price action will continuously make higher highs and higher lows. In case of a downtrend, price action will continuously make lower highs and lower lows. Now, when a trend stops making higher highs and higher lows or lower highs and lower lows, it is said to be broken. Now, when the trend is broken, market is in the consolidation phase.
When the market is in a consolidation phase, it is said to be ranging or moving sideways. Now, the market never moves in straight lines. When it trends, it trends for a while then starts consolidating or ranging. It will range or consolidate for a while than either resume the trend in the same direction of the previous trend or breakout in the opposite direction of the previous trend.
When you are trading naked, you will have to learn how to use multiple timeframes to determine whether the market is trending or ranging. Now, it is possible that the market is trending on one timeframe and ranging on a different timeframe at the same time. So, you can find the price action to be trending on the daily timeframe and in a retracement or a consolidation phase on a smaller timeframe.
So as a naked trader you will be trading with different timeframes observing the price pattern on these different timeframes. Price action might be trending on the 30 minutes chart but consolidating on the 15 minutes charts. The perfect signal would be when the price action aligns itself in the same trend direction on the different timeframes.
Trading naked is the ultimate way to trade depending only on price action. Price action is the ultimate indicator. After all all these technical indicators apply formulas to the price action to get the trading signals. A naked trader only uses price action to understand the market sentiment.
An inside bar appearance represents an indecision in the market. An inside bar is formed when the high is lower than the preceding bar and the low is higher than the preceding bar making it an inside bar. An inside bar represents a narrow range.