Rules as described by Walter in his video:
1. if current candle makes a higher high than the previous one
2. and is a candle
3. and has room to the left
4. and is the largest candle (high - low) compared to the last 7-10 previous ones
Then open trade on the next candle once it breaks candle's low and take profit close above previous support. Stop loss goes a few pips above candle high
Do the opposite on a candle signal.
Works best on 1H, 4H and 1D timeframes.
I haven't done any extensive backtesting on this, but it looks like it gives pretty good signals:
In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in a publication is governed by House Rules. You can favorite it to use it on a chart.
//Based on "How Naked Trading Works" video by Walter Peters: https://youtu.be/t-pD3fap25c?t=1m21s study(title = "Naked Forex Trading Strategy", overlay = true) roomToTheLeftPeriod = input(title="RoomToLeftIntervalCheck", type=integer, defval=7, minval=2, maxval=30) largestCandlePeriod = input(title="LargestOfLastXCandles", type=integer, defval=7, minval=2, maxval=30) //1. if current candle makes a higher high //2. and is a bearish engulfing candle //3. and has room to the left //4. and is the largest candle (high - low) compared to the last 7 previous ones //Open trade on the next candle once it breaks bearish engulfing candle's low and take profit close above previous support //Stop loss goes a few pips above signal candle high higherHigh = high > high//step 1 bearishEngulfing = close > open and open > close and open >= close and open >= close and open - close > close - open //step 2 roomToTheLeftRising = rising(high, roomToTheLeftPeriod) //step 3 largestCandle = max(high - low, largestCandlePeriod) //step 4 barcolor(higherHigh and bearishEngulfing and roomToTheLeftRising and largestCandle ? yellow : na) //1. if current candle makes a lower low //2. and is a bullish engulfing candle //3. and has room to the left //4. and is the largest candle (high - low) compared to the last 7 previous ones //Open trade on the next candle once it breaks bulish engulfing candle's high and take profit close below previous resistance //Stop loss goes a few pips below signal candle low lowerLow = low < low bullishEngulfing = open > close and close > open and close >= open and close >= open and close - open and open - close roomToTheLeftFalling = falling(low, roomToTheLeftPeriod) barcolor(lowerLow and bullishEngulfing and roomToTheLeftFalling and largestCandle ? white : na)