John Templeton, who has been an investor in forex day trading for more than five years and who is the creator of the Trading in the Buff forex signal system, soon learned 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, informing me that I should open or close a trade. Then it dawned on me. How in the world could I make a profit trading currency exchange, if I don't even apprehend what I am looking at?"

This is when John decided to take the bull by the horns and to reason things out for himself. No more accepting this or that forex training theory. He started by listening to what all the experienced traders had to say on the topic. And more than any other slogan that came out of their mouths was the phrase "price action." John was so shocked 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 take 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 act upon a currency's movement in the market. Things like the influence that the non-farm payroll numbers which 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 type of trader surmises that opening up the indicator menu on their charting platform will somehow or other show them which currency pairs to trade based on how the indicators read. From John's point of view these traders seem to think that -- rather than comprehending price movement -- adhering to charts full with lagging indicators such as RSI, MACD, and stochastics will steer them to the right trade to enter. After enduring years of losing trades following this same formula, John is persuaded that following this path is a losing cause.

The one technical indicator that most failed contemporary traders don't use is price action. They're all waiting for all their other indicators to match up. For this kind of trader, the only significant 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 furnish the trader a clear picture of what the market is essentially doing during a given trading period.

When, for example, you train yourself to begin looking at price support and resistance levels, you are seeing actual statistics which are having an impact on the direction of the market. No lagging indicator will ever give you that kind of knowledge which will hold up for very long. You have to be able to see it instantly 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 program references the removing of indicator based strategies and returning to fundamental price action indicators. In other words, trading in the buff, without using the theoretical indicator window dressing that many traders are conditioned to base their trading habits on. The theories sound good, but they don't necessarily work.

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