Trading Naked: - Rob Booker

Trading Naked:
Secrets of Top (Naked) Traders Revealed
Rob Booker
© 2005 Rob Booker. All rights reserved forever and ever. And ever.
This ebook is part of a comprehensive program to train you to successfully trade currency. Alas, you’ll probably lose money. We all do at first.
Rob’s not liable if, based upon the information you read here, you lose money, make money, turn into a woodchuck, possum, or other furry creature.
You have to work hard, study a lot, and dedicate yourself mentally. Don’t ever give up. There are no pictures of Rob in this ebook.

Here’s what happened to me after I started trading live in
my first forex account: I ended up like the guy in the barrel.

Step 1: Get Naked
It was not long after my big loss that I realized that in order to trade
successfully, I needed to have an edge. Without some kind of
informational advantage, I was not going to be successful. And you
know what?
Without an edge, you’re not going to be successful either.
Perhaps you are a profitable trader. It’s possible that you already have
some ferocious trading skills. One time there was this dog in my
neighborhood, and he was really, really ferocious, like he could bite
your leg off in one bite, and then as he was chewing on your leg
while you were screaming, he would be grinning and stuff. Maybe
that’s how ferocious you are as a trader.
Or maybe you’re not so ferocious.

Maybe that’s you. Maybe you’re not so confident in your trading right
now, or you have a bunch of winners and then you lose big. I know
how that feels. I want to help you become a better trader. The best
trader you can be.
Getting naked is the first step.

Step 1: Get Naked
Ok, I don’t mean that you should actually take off all your clothes.
But if you are not yet successful in trading, you must strip down all of
your pretenses, your pride, and your previous knowledge. Dump it
all. Start over. Take a deep breath.
Let me give you an example. I once worked with a trader who had
studied technical analysis for 5 months previous to hiring me as a
mentor. He was fascinated by many different indicators, including the
MACD, moving averages, Bollinger bands, Relative Strength Index, and
a few others. He was using all of these indicators on his charts when
he first started with me. He asked if we could work together to put
those indicators into a system for him. A profitable system that he
could use every day.
I encouraged him to delete all but 2 indicators from his charts. This
would help him to focus. No longer would he be confused by the
conflicting messages that all of the indicators were giving him.

Instead of being excited about the prospect of reducing the
information overload, he protested. What about all those months of
study that he had done? All of that would be lost if he deleted the
other indicators!
Two months later, he relented. After crippling losses to his account,
he was ready to get naked. He humbled himself. He agreed that he
was taking in too much information. He was willing to admit that he
needed to reduce the amount of information he was studying every
day – even if this meant that he had wasted 7 months of his trading
life.
He deleted the other indicators, focused exclusively on MACD and
moving averages, and has been trading profitably ever since.

LESSON ONE:
With charts, less is more.
(naked charts rule)

Step 2: Get Some Naked Backup
I trade with a team. Granted, my team consists of me and just one
other person – Maxwell Fox – but that helps me trade better than I
could on my own.
Team trading is a concept that I introduced in my training, because
traders seemed to do better when they could bounce ideas off one
another. They don’t necessarily all take the same trades, but they at
least can voice their trade ideas, get feedback, plan trades together,
and keep each other honest.
I found that when I first started, it helped me to have another person
to whom I would be accountable for all of my trading. That’s what I
mean when I say you need to get some backup. Someone to get
inside the barrel with you, to help you when you make a bad trade, to
keep you humble when you make a good trade. That kind of stuff.
Step two, in essence, is to trade naked with other people.

LESSON TWO:
Trade naked with others.

Step 3: Make a Naked Plan
Over the years, I have read at least 1,000 trading plans from traders
around the world. There is one common characteristic of the best
plans:
They were short. They were simple. The very best were just 1 page
long.
Don’t run out and delete the last 5 pages of your trading plan just
because I said the best plans were only 1 page long.
Wait. Wait a minute. I take that back. I think you SHOULD run out
and delete the last 5 pages of your plan. Make it one page, and cram
everything you can into there. Tell me, in your plan,
1. When you plan your trades.
2. What money management system you use (fixed fractional, etc.)
3. What your primary entry and exit triggers are.

LESSON THREE:
Write a Naked Plan.

Step 4: 1-2-3
I have talked about this in front of groups. I have talked about this in
front of individuals. By email, by phone, by fax, by instant message,
by carrier pigeon, and by message in a bottle. And very few people
ever listen to me.
Test 1 currency pair. With just 2 time frames. With a maximum of 3
indicators. That’s it. 1-2-3.
Too many traders feel that they will do better if they have more
information. You know that’s not true. So, here is the plan:
Test 1 currency pair, with just 2 time frames, with a maximum of 3
indicators, and test for at least 100 trades. See what your results are.
Test with a small live account if you are wealthy. Test on a demo if
you are not. Testing takes a long time, and no one likes to do it. Be
patient. Test. Try different things. Test on historical charts by playing
the candles back one at a time. Testing pays off.

LESSON FOUR:
Test Naked.

A Bunch of Naked Rules
1. You are looking at too many currency pairs, too
many time frames, and way too many indicators.
Get naked.
2. You are trading live too soon. Get a naked
demo.
3. You did not test your system extensively. Test
naked.
4. Your forex dealer is not running your stops.
You are just taking bad trades.
5. Support and Resistance is the greatest invention
ever. Support and Resistance can make you
wealthy.

6. Put one indicator on your charts. Make a
system from just one indicator. I bet you’ll
make more money.
7. Think about pips, not dollars or euros or
pounds.

About Rob
Batman's most useful weapon in his war
against crime is Rob Booker, the black
thunderbolt that knifes through Gotham's
streets when danger threatens. The vehicle
has undergone many design changes over
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Rob Booker’s chassis is constructed of an
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and is coated with a unique bullet proof
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windshields; consequently, Rob Booker can
easily withstand any handgun or semiautomatic
weapon assault.
Oops. That’s the batmobile.

About Rob
I trade for a living. I want to help you trade for a living, too. No matter
who you are, you can probably trade for a living if you just get a handle
on the mental aspect of trading.
I try to give a lot of stuff away for free. Sometimes I do charge for some
services. Visit me at robbooker.com, or send me an email
(rob@robbooker.com). Keep in touch.