The Finance Book Club

Both Fooled by Randomness and Evidence-Based Technical Analysis make a strong case against focusing too much on charts and technical analysis alone!

Even more though, is when you compare to Robers Shiller's stuff and Reminiscences of a Stock Operator to some of the stuff that is out there, its starts to seem like most of the retail trading books are pure repetitive garbage..

I think so. This is one of the cumulative benefits of continuous reading; after a while you start to get a sense of when you can set something aside as either
a)useful, but a repeat of knowledge you already have or
b) not useful, based on misinformation or pseudo-science
c) useful and novel - the best type.

Naked Forex
The first thing I notice is this book isn’t new. Published 2012, and that fits in with the rough amount of time it takes for anything to percolate through the public consciousness - about 10 years.

Foreword
By Abe Cofnas, a guru and trader whose fame is mostly self-generated. He is best known for his association with ‘Banc de Binary’ a binary options firm with regulatory issues around the world. It ended up closing in disgrace - even Cyprus withdrew its license! The wikipedia article offers even more interesting tidbits.

Cofnas was only the ‘head analyst’ at Banc de Binary so it may be unfair to tar him with the brush of his criminal associates. Personally I think I’d look elsewhere for a foreword-writer, but I’m not Nekritin, and I don’t have PhD like Dr. Peters, so who am I to judge?

 

1. The internet has made trading possible everywhere and by nearly anyone
2. As a result the number of gurus, blogs, alerts, systems, has exploded
3. Most of these sources of advice fail to provide ‘actionable knowledge’
4. Price is the most important indicator
   1. All indicators derive from price
   2. Indicators are like training wheels
   3. They actually limit the ‘evolution of a trader’s performance’ because they ‘disincentivize’ the trader from ‘listening’ to the market
   4. Indicator-based trading signals are inferior to ‘naked signals’

   
   
   

5. Know one’s personality
6. Trading systems based on untested algos will surely fail
7. Manual backtesting is effective to identify system strengths and weaknesses
8. Support and resistance zones
   1. Prize zones provide the naked truth about market sentiment
   2. If price breaks through a zone, no matter what the reason, it’s a signal. But is it really?
   3. These are called ‘market scars’; markets have memory as do traders
   4. The ‘last kiss trade’ is a powerful tool in identifying when breakouts have occurred

   
   
   

Preface
Myths about trading

1. Myth 1: successful trading is indicator based.
   1. Some successful ways to trade use indicators but they aren’t necessary

2. Myth 2:successful trading is complex
   1. Naked trading systems are ‘incredibly simple’

3. Myth 3: successful trading is dependent on the system

The book has 3 sections
1: Reasons for price action trading
2: Methodology
3: Psychology

Section 1: Naked Forex Trading Revealed
Chapter1
The first section of the book goes over the fundamentals of Forex trading. Did you finish BabyPips school? Then you know most of this already.

 

1. What are currencies and currency pairs
2. Currency symbols and the majors
3. FX players
   1. There are really two FX markets - the interbank market and the retail market
   2. In the retail market your competition is other traders and your own broker
   3. The majority of traders lose and your broker expects you to lose too
   4. A book vs. B book traders
   5. Winning traders are 5% of all traders

4. Fundamental vs. technical traders
5. Naked trading is trading sans indicators.
   1. Indicators encourage ‘secondary thinking’
   2. This is a handicap
   3. Encourages focus on where the indicator will go rather than focusing on the market

Chapter 2
This chapter mostly deals with bashing indicator-based trading. Some won’t need any convincing.

Reasons why indicators can fail:

1. Lagging
   1. Significant moves can happen before the indicator has a clue
   2. Naked traders can enter immediately on a ‘naked trading signal’ but what was it? The big candle?

   
   
   

2. Misuse
   1. Using an indicator for a purpose for which it wasn't invented

   
   
   

3. Misunderstanding
   1. Not knowing how to properly use an indicator

   
   
   

1. Severe drawdowns are caused by mis-timings
2. Taking responsibility for losing trades
   1. Indicator traders can blame their indicators
   2. Naked traders must only blame themselves?

   
   
   

3. Failing traders can be divided into two groups
   1. Bad system traders
      1. When they have a series of failed trades they identify their system as the problem and tweak it or change systems to suit

      
      
      

   2. Bad market traders
      1. When they have a series of bade trades they blame the market and outside influences like central banks or the broker’s poor execution

      
      
      

   
   
   

4. Apparently the bad market trader might be more ‘conscientious’ than the bad system trader because they’ve spent more time ensuring the system is viable, but they end up getting surprised by the market just the same and the end results are the same
5. The solution, no surprise, is naked trading
6. Naked traders make decisions based on price movements so there is no such thing as a ‘bad market’ for them
7. Only bad luck or bad execution can be blamed
8. Current market price is the best indicator of sentiment
9. “Paying close attention to how the market behaves after you enter a trade is one of the best learning tools available to you.” Now who does this remind you of? If you’ve read the Finance Book thread from the beginning you will know.
10. The authors call this ‘market biofeedback’ using a metaphor of a biofeedback machine that measures stress response.
11. The biofeedback has two domains
    1. How the market reacts (price action) after you enter a trade
    2. How you (trader) reacts to price action after you enter a trade

    
    
    

12. Some traders let the market biofeedback dictate their actions
    1. They change trading time frames
    2. They change systems
    3. Others will hold firm and have faith in their system

    
    
    

13. The easiest way to record biofeedback is to record your thoughts as you trade
14. The authors recommend recording yourself, your voice, before, during and after a trade
    1. Ask where the market moved since entry
    2. Would you take the same trade now?
    3. How do you feel about the trade?
    4. What do you like/dislike about the trade?
    5. Rate it on a scale 1-10
    6. Record the answers to these before, during and after the trade
    7. This builds up a database of market biofeedback

    
    
    

15. Market biofeedback awareness will allow you to control your trading behaviours

Suspiciously, there is a website, marketbiofeedback.com and the publishers(?) have allowed the domain to lapse.

Thoughts after chapter 2:
On it’s own I have no objection to any psychological techniques that allow you to take the actions you committed to taking before you entered a trade: commitment devices, contracts, detailed trading plans, all the psychological tricks, but for me, personally, the best psychological tool is knowing my theory is backed up by repeatable, statistically valid results.

I thought the psychological section of this book was in part 3, but we’re already talking about it, and in my experience, trading books that promise detailed methods and then mostly deal in psychology, are suspect. They use a form of bait and switch, where you are promised detailed information-rich content and then presented with non-testable or informationally porous claims or suggestions.

I’m not saying that’s happening here yet, but let's get to the naked price action analysis! Looking at the Table of Contents, I think we have to wait until chapter 4. However it's not necessarily a bad thing as the next chapter deals with back-testing, which is an important topic that many trading books overlook or avoid.

Chapter 3

1. Consistently profitable traders are experts
2. Expertise is developed through practice
3. You are competing (trying to outwit) some of the most determined and intelligent people in the world
4. Only ‘25.2 percent’ of traders will decide to practice trading to become an expert No explanation how this %age was determined
5. Trading isn’t passive, it requires effort
6. Practice develops confidence which allows you to avoid the distractions of terrible-system and bad-market traders
7. Backtesting does two things
   1. Allows you to determine how suitable your trading system is for you
   2. Allows you to trust your system
   3. Oh, there’s a third thing - you will gain expertise trading your system;
      1. Backtesting allows you to quickly take many trades using your system

8. Some good systems don’t work for some people because they don’t ‘fit’
9. Fit is determined by personality and lifestyle, and pre-existing beliefs
10. Once you have a system that ‘fits’ you need to have confidence trading it
11. Trading will become more relaxed
12. Your learning will accelerate with backtesting.
13. The method doesn’t matter (???), it only matters that you do it. Oh come on.
14. To become an expert you must do something at least 10,000 times
15. Naked trading is less cumbersome than indicator-based trading
16. “experts at the highest level find it difficult to teach their expertise.”
    1. Novices think about procedures
    2. Experts think about how they are interpreting info

17. Expert traders spend more time evaluating a trade once it’s been initiated
    1. Experts focus on market biofeedback
    2. Novices focus on system rules

18. Manual back testing
    1. Most readily available
    2. Example is using metaTrader by advancing the chart one bar at a time using F12
    3. “To manually back-test, you simply scroll back in time and record your trades, the trades you would have taken had you been trading the chart in live market conditions. You can advance the candlesticks slowly, one at a time, record your entry price, the number of lots traded, your stop loss, and your profit target. You may be concerned that manual back-testing involves a lot of notes, spreadsheets, and recordkeeping. It is a meticulous , involved, and laborious method of back-testing. It is also extremely powerful.”
    4. Manual back testing is best for discretionary traders, who are ‘most’ traders
    5. Cons:
       1. Time consuming
       2. Difficult to avoid ‘cheating’ (future leakage)
       3. Tedious
       4. Hindsight bias

    6. Do it an hour a day
    7. Advance the chart slowly
    8. Trading historical data about which you have some knowledge (like the 2008 crash) is problematic as you may be unconsciously introducing bias

19. Back-testing software
    1. A step up from manual testing
    2. Faster
    3. Exportable
    4. Discourages cheating
    5. Authors recommend Forex Tester
    6. The real work in back-testing is examining the results
    7. Back-testing data will help you determine your patterns

20. Automated back-testing
    1. Does not closely duplicate the discretionary trading most traders engage in
    2. Does not allow for human interpretation that is present in the system
    3. Variables that are available to the human trader may not be available to the computer (news, world events)
    4. The authors discourage using automated back-testing for most traders
    5. If your system can run without intervention for a month, automated back testing may be OK
    6. Does not allow the gain of experience, because the computer takes all the trades
    7. Easy to use too many variables, too many indicators. Computers can digest it all but people cannot
    8. The ease of automatic back testing is its own Achilles heel
    9. Postdictive error
       1. Future data can creep in unknowingly - but the authors don’t give a specific example

    10. One advantage of automated systems is it quickly lets you see whether a system is profitable

21. Top three tips
    1. Unprofitable traders usually don’t backtest
       1. They hop from system to system

    2. Profitable traders know their systems have worked for years
       1. They know what type of drawdown is expected

    3. 1. Consider your style
       1. Use a method that fits your style
       2. If you’re an automated trader, use an automated back testing system

    4. 2. Take time to test
       1. Temptation can cause you to do too much too quickly

    5. 3. Mistakes are part of the learning process
       1. We naturally want to avoid mistakes
       2. When a mistake pops up several times it’s tempting to change the system to avoid the mistake, but this road leads to too many variables
       3. Naked trading can avoid this tendency

22. Humans are creatures of habit
23. Market history is an amalgamation of habitual traders
24. “The market is nothing more than a community of creatures of habit. People make up the market. The naked trader uses this to his advantage, by closely following historical turning points in the market.” Once again I am reminded of Livermore.

Chapter thoughts:
The best parts remind me of Livermore. The advice to tailor methods to your preferred system is good advice. However this chapter was a big letdown in terms of specific methods and advice. We are given one software package recommendation but the rest of it is left as an exercise for the reader. Cheap advice.
Next: identifying the (in)famous support and resistance zones.

Chapter 4

1. Price tells us all we need to know
2. Support and resistance zones are the ‘sweet spots’ in a chart, though what is meant by ‘sweet spot’ isn’t explained
3. Support and resistance zones:
   1. Are an area, not a point
   2. They get more accurate with time
   3. Zones are where price reverses repeatedly
   4. ‘May be’ extreme highs or lows on the chart
   5. Where naked traders find opportunities
   6. ‘Rarely’ need modifying
   7. Line charts help traders find zones
   8. These zones are seen by many traders

   
   
   
   
   

4. Zones are a range
   1. Authors use the cutesy metaphor of a beer belly
   2. The zone is squishy but resists further penetration after a point

   
   
   
   
   

5. Price has a tendency to reverse at historical levels
   1. Another metaphor - this time about a hot pizza pan
   2. Traders remember getting ‘burned’ at certain zones
   3. Zones look like market scars
   4. Charts have memories

   
   
   
   
   

1. The naked trader won’t take a trade until price has reached a zone
2. Use line charts for finding zones
3. Use higher timeframe charts
4. Use closing prices
5. The only zones that are important to you are the ones on the timeframe you’re trading and one timeframe higher
6. If you have ‘too many’ zones on your chart you will find it harder to know what’s a real opportunity and what isn’t
   1. You’ll enter too many losing trades
   2. Zones should be roughly spread out
   3. If you are trading D1 you shouldn’t be getting daily trade opportunities

   
   
   
   
   

7. Problems
   1. It’s difficult to determine precisely where zones should be drawn
   2. “[one] problem that many traders come up against when drawing zones is that the market seems to disregard zones.” LOL Maybe because they are random?
   3. The authors claim that if we switch to a line chart this fixes everything. Bogus

   
   
   
   
   

A nicely curated chart.

“price will often push into and beyond a zone, only to eventually turn around” Well if it didn’t eventually turn around it would be a hell of a trend, no?

1. “most naked traders find it much easier to trade reversal set-ups than breakouts.
   1. Reversal set-ups are based on the market turning around at a zone, and breakouts are based on the market trading beyond a zone.”

   
   
   
   
   

2. “The key to successful trading is to wait for the very best trading opportunities.”
   1. These opportunities occur when the market reaches a well-defined zone and then prints a “catalyst”. What’s a catalyst?!! Maybe we’ll find out next section.

   
   
   
   
   

My thoughts
Look, it’s undeniable that the market has a memory. Much scientific and mathematical study has been undertaken to figure out just how much, but there is no clear answer. Personally I believe it is much less than what most traders believe.

S&R ‘zones’ are not the key to trading because if they were, everyone would be winning, as S&R is one of the most abundant, resilient, and well-known trading ‘motifs’ in existence. Support is reliable in the past, and then unreliable right when it counts the most. There is, of course, a reason for that.

If you take the authors suggestions and mark up a chart you will find that you can put lines just about everywhere, depending on the thickness/allowance of your ‘zones’. And price will reliably bounce off them and just as reliably shoot right through them.

Here, let’s look at a chart I just made using a whopping fat 4000 pip zone on the classic EURUSD (fibre).

See full size at https://drive.google.com/file/d/1qpJ...ew?usp=sharing

It looks like there are reliable zones for EURUSD over time, but just how reliable are they? First of all, I’m using a huge fat zone. If your account can tolerate missing a 4k pip target, you are swinging some big ropes. Secondly, you can see often price doesn’t give a rat’s ass where your magic lines are. It just blows right through them. How often? Well, we don’t have enough data points here to say for sure, but the best streak for any zone seems to be about 3 times. And even then, I have to count ‘near misses’. And if price is moving into uncharted territory, as fibre was back in March 2015, past history is of no help. Maybe some analysts expected price to drop down to the 2000/2001 lows (not shown), but it did not.

How many people thought price would rebound off the 2010/2012 summer lows back in winter 2014? And how many lost their shirts when it sure as hell did not? Then price consolidated and lulled everyone into a sense of security between the 2015 low and high, but then it broke well above those points in 2018. But it did not give us the satisfaction of reaching the 2014 highs which I’m sure many analysts were expecting.

We could say for sure we were expecting the bounce off the 2015 low this year, but what about right now? Is Fibre destined to bounce down off what might be resistance from the 2017 highs? The 2018 highs? Does it need to actually reach those highs first before zooming down again? This will definitely matter if you’re planning to trade this chart. Or even trade on the daily chart, which is a more reasonable proposition for most people. I would pay big money (in fact, all my money) to know for sure which it is, but guess what, I don’t, and neither does anyone else, which is why a market exists. All I know for sure is that price is consolidating, has for a while and is due to make a big break like it did back in 2014. But which way will it break? The S&R zones don’t tell me enough to call it.

The only thing I can say for sure is that price prefers to do the unexpected, to go against the obvious, majority view. And there are definite reasons for that also. So while it seems more likely that the Euro should decline against the US dollar as it has since 2008, if it defies that expectation I cannot use the 2018 high or the 2014 high to derive a price target, that’s just not how things work.

Next: the Naked Trading 'methodology'

Section 2
Chapter 5

All the naked trading strategies have 3 parts
1. ID S&R zones
2. Wait for the market to reach one of these zones
3. Take a trade once a 'catalyst is printed'

 

1. Catalysts are powerful price patterns.
2. They suggest what a market ‘may’ do once price reaches a zone
3. Catalysts outside a zone, are just ‘interesting price formations’, but NOT high probability trade setups
4. A powerful and simple catalyst is the ‘last-kiss’ trade
5. Markets have two moods
   1. Calm, drifting, directionless, choppy (see fig. 5.1)
   2. Strong, powerful, exploding trends (fig. 5.2)

   
   

6. The market continually moves between those two states
   1. Most systems perform well in one or the other type of market, but never in both types
   2. Certain naked trading patterns perform well in one market type, but not both This reminds me of the conclusions I reached after finishing Al Brooks.

   
   

“This simple fact means that you must keep in mind which type of market your chosen trading system is designed to work well in, and try to restrict the application of your chosen trading system to only this type of market.” But now I’m going to bet you $100 the book doesn’t tell us how to do that exactly.

 

1. One strategy (‘age-old’) works on the ‘precipice of the transition’ from ranging to trending market - the breakout trade
2. The breakout trade has two phases
   1. Wait for the market to consolidate (range/choppy/directionless) - requires patience
   2. Eventually the market leaves the range (breaks out) and rockets in one direction

   
   

3. The S&R zone will mark the ‘line in the sand’ for the naked trading version of the breakout trade - the last-kiss trade
4. The Last-Kiss Trade
   1. 1. Identify the consolidation zone by drawing a box around the choppy/directionless area
      1. This box is formed by a Support and Resistance zone
      2. Once price breaks out of the box, the last-kiss trader ‘takes notice’
      3. However they don’t enter yet, because breakout trades tend to suffer from the dreaded ‘fake-out’
      4. A fake-out occurs when price leaves the box and then comes back in

      
      

   
   

A break-out then a fake-out, aka, randomness. Notice this has happened several times in this chart, although possibly on lower time frames.

 

1. 2. Fake-outs happen often because the market is only trending 15-30 percent of the time
2. The Last-Kiss trade is a system to determine the most likely breakouts
   1. Not guaranteed but
   2. Will filter ‘many’ of the ‘very worst’ fakeouts
   3. Based on the ‘retouch principle’
      1. “The market trades beyond a zone before returning to the zone from the other side to confirm the importance of the zone.”

      
      

   
   

“The last-kiss trade is a specific subset of the breakout trade. Not every breakout trade is a last-kiss trade, but every last-kiss trade is a breakout trade.”


Look at the weird way this consolidation box is drawn. The upper boundary of the box has had no confirming prior price reversals at that level so how can we call it a first fakeout? I agree that the second arrow, is a bear fakeout. The ‘last-kiss’ third arrow is at a level that cuts through most bars rather than being drawn on a prominent peak, which is also weird. Something that hasn’t yet been mentioned is for this method to be valid we need price to stop touching the box boundary and then retouch it. Will this get mentioned?

 

1. The trade is entered only when the market returns to the consolidation box level to ‘kiss’ a support or resistance zone
2. It is not enough for the market to simply re-touch the zone and then pause; the market must print a “strong” candlestick in the direction of the breakout to trigger the last kiss.
3. Entry is not at the level of the consolidation zone but above or below the ‘strong’ follow-through candle after the last kiss; see 5.13.

1. Stops
   1. Emergency stop is placed at the midpoint of the consolidation box
   2. The authors use what seems to me an overly complex method of calculating the box midpoint. I would just draw the box, as they have done on the charts, and select it. MT4 shows the midpoint ‘dot’, put a line through that dot or just right-click and set the stop-loss at that point.
   3. The second stop and more likely to get hit is set at the boundary of the consolidation box. Basically if there was a ‘strong’ breakout candle after a ‘last-kiss’ but price returns to the box to kiss it again, the trade is invalidated and exited.

   
   

2. Summary
   1. Wait for price to consolidate between 2 zones
   2. At least two touches needed on both top and bottom of the zones (box)
   3. Wait for price to break beyond the top or bottom zone
   4. Wait for price to return to the box (and then ‘strongly’ move away - the authors fail to add) to print a ‘last kiss’ candle
   5. Stops at the low of the last-kiss candle for short trades and at the top of the last-kiss candle for long trades
   6. Emergency stop at the consolidation box midpoint level
   7. Profit target is the nearest zone Why wasn’t a bit more verbiage expended to explain what is meant by this? I assume it means the next S&R level that we can draw on the chart?

   
   

The authors claim you can see live last-kiss trades at the book’s website, which does exist but if you go to the link it is just a sales funnel page for the book. I already bought the book; I want to see these live last-kiss trades! Even if the trades were stale, ca. 2012 it would be better than promising and not delivering. A typical shady forex marketing move.

Thoughts:
After reading Brooks the clarity of explanation in this chapter is a breath of fresh air! I think we have just about everything we need to identify last-kiss trades and test out their win/loss frequency and profit/loss profitability. An automated system coder could definitely nitpick about the accuracy of the definitions for things like ‘consolidation box’, support and resistance levels, and of course, the profit target levels, but I’m not going to sweat it. I think I have enough to do some informal testing. Which I intend to do next before summarizing chapter 6 (which appears to be another pattern).

Clem, what do you recommend the most for someone with moderate trading experience but still not consistent, currently reading the Brooks trilogy, not sure if I'm wasting my time or not

Excuse me intruding here Clem. I think that there have been some excellent ideas presented here in this new book for a trader with moderate experience (modesty is always good however experienced you may be).

The backtesting thing, one bar at a time. Very important. I'm glad that was featured.

What I do is drag the vertical line across maybe a few years of daily data. Then at the end, I go over it again, taking into account what I have learnt on whatever I am looking at. It takes practice to not cheat, or say, well that's an exception. Exceptions will happen again and again, like, say, fakeouts or the many many other tricks the market has up its sleeve. Anticipate.

Then I do it on another market, and then another until *some* consistency is achieved over say 100 hypothetical and sequential trades (that'll be more than enough to determine whether its worth pursuing/refining or is a dog with fleas, and there are plenty of them) with minimal rules. Different people have different tolerances as to what is acceptable consistency.

Should you *not* find consistency (however you wish to define it - this is where just a little bit of maths helps, and I provide no hints - a separate topic) in whatever you are testing, well, that was a cheap little exercise, eh? So, best to avoid trading real money before having some easy consistency on paper and in your mind.

Yes, you can get software to do it, as mentioned, and that is OK, but you have to learn exactly how to code things. Not well suited for naked trading rules, I think, as visual is important.

I am very grateful to Clem for introducing me to Brooks for one reason - to know that there exist actual people who are convinced that Brooks is a genius other than himself (yes, I checked and people do vouch for the methods he teaches, after studying for at least a number of years in real time, as one may study say the novel War and Peace written in its original Russian and French, if English is your first language. May the force be with them).

1. The most important thing is that you are reading, and not just BabyPips or ForexFactory which is like getting sex education from the playground
2. The next most important thing is that you critically evaluate what you read. Just because someone can write a book doesn't mean they know what they're talking about, and just because someone says they're a successful trader doesn't mean they are.
3. Even if something works for the author it doesn't mean it will work for you, so it's normal for the starting trader to 'try on' different methods and styles until they find one that fits. What's important is that eventually this process should slow down or stop while you master your 'one kick' 10,000 times (Bruce Lee).
4. It's a good idea to keep reading even after your trading method is set in stone, because there's always more to learn, theoretically.

As for Al Brooks specifically, if his training works for you, then you don't need my opinion, but here it is anyway:

Al Brooks is nuts.
Thinking there is relevant signalling info in EVERY candle is the crazy theory of a crazy man. Distributed systems don't work like this. It's very difficult to get all the people from a large group on the same page (was Donald Trump a good president? The answer seems blatantly obvious to me, and yet 50% of the USA cannot agree). So you can imagine how difficult it is to get a group of traders, possibly numbering in the hundreds of thousands, to agree on the same chart, much less the same bar of the same chart, using different brokers, different candle shapes, etc. It just won't happen, which is why the market is most often, random cyclical and natural phenomena. However it isn't always like this and when it does move with conviction it really moves and messes up any system that treats it like a natural phenomenon (Hurst and Gann for example). And the Brooksian info that does make sense to me is presented in a very complex, haphazard way, not elegantly simple like the 'naked forex' book chapters have been (in comparison).

So called 'smart money' probably sees things a bit more homogeneously than retail but even there, they are not relying on individual candles, in fact they really don't even care about chart data, they care about order flows, which we haven't even touched on yet.

Some of his (Brooks) patterns and methods might work, but his books (at least the two I read) don't deal with exits, which is at least 50% of the art/science/technical aspect of a trading system. So for me, following Al Brooks is like learning how to walk a tightrope but skipping the sections on securely attaching the rope to the start/end points. It doesn't matter how good your balance is if the rope comes loose.

I meant what I said though, if someone can tell me the right way to approach him I will give Brooks a second look because I think he is sincere, in other words I don't think he is an intentional charlatan, which is already a step above most trading experts.

As for where to start as an 'inconsistent' trader that is a very good question that I am still trying to answer myself. Do not expect it to be a short journey. Knowledge will surely help but much of trading is not knowledge-based, it is skill-based, so practice is certainly important, as Naked Forex has told us.

Your intrusions are always welcome!
Very true. Once you know everything about trading you will blow your account.
Yes a little bit of math goes a long way, and your method has a lot of appeal Mr. Oz.

Whatever you (reader) do(es) it has to be something you can keep up with, and so that's why I recommend (as it has been recommended to me) that everyone come up with their own methods and techniques. It might involve a little re-inventing of the wheel, but doing so means you are thoroughly familiar with all the moving parts.

Thank you for the replies, very generous of your time. Someone gifted me 100 forex books so I am slowly making my way through them, one I noted well was by Ryan Okeeffe. I have started to notice some things tonight actually from Al Brooks, just now AU has returned to the hourly range!

O'Keefe's book is good and unpretentious and a pleasure to read, and he does provide some very robust advice that provides the reader with plenty of opportunity to go away and explore some things and keep you busy for quite a while.

It is a framework around which you can work. That he introduces the Hull moving average is indicative of someone who goes straight for what is useful - the inclusion of that kinda impressed me at the time. I'm usually too grumpy for those inner-glow things; I remember having to wake up one of my neurons from its usual sloth.

I've added O'Keefe's book for consideration in the book list.

Also, Google is honouring Benoit Mandelbrot on what would have been his 96th birthday! (I'm a bit of a fan).
https://g.co/doodle/qmwcmep

Too busy with real work to do the Last-Kiss test, but I still intend on completing it, and think I will try to turn it into a video as it will be easier than writing sheafs of examples.

There is a wonderful chance to test the viability of the theory on BTC right now though as it approaches its historical all-time high price.

Yes! BTC highlights a lot theory out there about markets. Some things from my notes:

1. It is a study in volatility. For a "currency" it moved more in the last month, than RUB and BRL has YTD. (And everything else out there)
2. The nature of BTC is constantly deflationary, as little by little the supply reduces. Unlike the rest of FX where inflation is normal and ongoing.
3. Major players who having been talking it down for the last 2 years have secretly been accumulating it. (Soros, PT Jones, JP Morgan, and so on)
4. Institutions went net-long the BTC CME contract back in Aug according to the commitment of traders report, and that lines up with the current run. https://www.barchart.com/futures/com...al-charts/BT*0
5. Correlation seems to be all over the place, jumping between being a risk-off asset like gold&USD as well as risk-on (stocks) with a slight skew towards being a risk asset.
6. And finally the technical picture is a screaming BUY. However that resistance up ahead should generate a lot of interest. So we will see what happens!
7. The steady rise in AVG volume suggests continuation.

So all in all, BTC is the #1 symbol to watch these days. I presume most everyone is already holding some already. And as it gets closer and closer to the ATH, everyone who is holding will be showing a positive position too!

Probably not a bad moment to stand aside and play something safe like russian roulette or get married. At least the risks are known there.

Bitcoin is a cruel and shallow money trench, and trading it makes good men die like dogs.

There's also a negative side.

Also Bitcoin really smells like a bubble mania for the modern era.

Checkout this guys stuff for a great historical view on these booms and busts. https://investoramnesia.com/category/sunday-reads/

The articles and Sunday Reads sections are gold.

Yes, quite so. Your qualifier - "continuous reading" - might damage some peoples delicate sensibilities.

Much of what I take notice of is a) or c). I'd say O'Keefe is in a), for example, with a twist of lemon. Its very good to be reminded, and look again with experienced eyes. I often go back to stuff I have read previously.

b) I can *now* sniff out pretty quickly and at best flip through, unlike in the past. The thing is though, that you have to actually know them to know.

c) these days is maths stuff - I have mentioned the Hull moving average and there are many others, too, outside of a) which are not in any traders book, rather, engineering - sadly I am not an electrical engineer. That is a very solitary pursuit, one that you need to try to figure out in ya head. Then there is Mandelbrot, Wiener processes and all sorts of other yummy stuff. That's *my* fundamentals - go figure.