What is the Difference Between Naked Forex Trading and Copy Trading?
“Naked Forex Trading” refers to trading without indicators or technical analysis, while “Copy Trading” involves replicating trades of other professionals without actively making trading decisions. In this article, we’ll explain both terminologies and help you understand the difference between the two.
Let’s get started.
What Is Naked Forex Trading?
Naked trading involves making moves without considering past or future price changes. In naked trading forex, price actions are the backbone as they reveal the prevailing conditions of the market and indicate potential future price movements. With this streamlined process, you can make trading decisions more quickly. On the other hand, using indicators to trade necessitates sifting through vast volumes of data and intricate patterns, which can stall your trading decisions besides making things difficult for inexperienced traders.
However, trading without indicators calls for market expertise and familiarity. Anyone interested in this trading method should familiarize themselves with price action charts and market trends. Naked traders must use an economic calendar to stay abreast of recent financial updates.
How Does Naked Forex Trading Work?
Trading forex without using any indicators requires a thorough understanding of how to read charts and interpret candlestick patterns. One of the prerequisites for naked trading success is familiarity with market cycles and patterns. Further, the ability to read price activity and predict market direction is vital.
Typically, a range may follow a low point in a market’s cycle, then an uptrend, then a range high, then a downtrend, and so on. When engaging in forex trading without indicators, awareness of these shifts is crucial. You may see such charts in any time frame. An adept naked trader considers these trends and trades in their favor.
What Is Forex Copy Trading?
As the name suggests, copy trading means cloning another trader’s actions by automatically taking identical ones. You set the amount you want to invest, and your account will automatically mirror the trades the expert trader executes in real time.
Copy trading is a simple method of gaining access to the expertise and experience of a more seasoned trader. Also, you won’t have to worry about giving up any influence over the final result. You can still end deals and initiate new ones at any time. It is possible to gain money from another trader’s success by “copying” their trades. The best part is that you don’t even need to be an expert in the forex market to participate and you can use apps such as telegram.forex to set everything up.
How Does Copy Trading Work?
You need to use the platform’s resources to find a trader whose strategies align with yours. Decide on how much to invest and how to distribute your funds among several managers. You can choose a trader to imitate, and the concerned platform immediately duplicates all of that trader’s trades into your trading account. If the trader’s performance has met your expectations, you can add more money to their account. Alternatively, you can maintain portfolio diversification and lower your risk by avoiding placing too much of your money with any one trader.
What Is The Difference Between Naked Forex Trading and Copy Trading?
When you trade the forex market naked, you do everything from selecting the desired financial instruments to using technical or fundamental analysis, reading chart patterns, identifying market trends, etc. However, you leave everything to the leader’s choice you follow when you copy trades. Copy trading is a terrific way for novice traders to get their feet wet. On the other hand, naked trading can intimidate novice traders. One major drawback of the naked trading strategy is that it necessitates an advanced market understanding. Naked Forex’s real-time nature makes it difficult to predict market behavior and identify market phases quickly.
Tips For Forex Trading Without Indicators
While forex trading naked can be challenging, especially for newbies, here we list some tips that might be handy for following a naked trading strategy.
1. Become Familiar With The Market’s Psychology
You should invest before the herd of naive investors floods the market. Don’t be a trader who joins the crowd for the big rising candlestick; instead, show up early, as there will likely be massive selling after that.
2. Keep A Check On the Market’s Volatility
Smart traders also learn to gauge market volatility. For instance, they may sometimes keep assessing how uncertain the market is. Remember, opportunities to enter the market arise whenever there is volatility, but excessive volatility can be risky if you don’t have the proper indicators in place.
3. Use Resistance and Support Levels
You can use resistance and support levels along with some trend lines. However, draw only a few lines while trading support and resistance levels, as drawing too many lines would make your chart look messy and might make you confused. Three support and resistance would work fine as long as they are the most recent ones.
Final Thoughts
Whether you wish to go for forex trading without indicators or prefer copy trading depends on various factors, including financial standings, risk appetite, trading styles, and market knowledge. Both naked forex trading and copy trading have pros and cons, so you’ll have to decide which is more suitable for your situation. As a new trader, copy trading is a great option, but it’s always wise to supplement this with more education so that one day you may start trading without outside help.
Telegram Forex has every resource available to help you enhance your learning exposure. You can automatically copy all forex signals from Telegram channels to MT4/5 in seconds. Our software provides automatic execution within specified trade parameters, and our scoreboard makes it simple to check signal success.
If you want more details, do not hesitate to contact us. We are just a click away.
