Recently, I’ve noticed that many traders are still being led around by various indicators and live stream masters, jumping in and out quickly every day, which can be dizzying to watch. What I want to say is, instead of messing around like that, it’s better to calm down and learn a truly useful method — naked K trading, which is price action trading.

Simply put, naked K trading involves observing the trend structure of the candlestick chart itself to infer the market’s possible direction. It sounds simple, but to do it well, you really need to understand the core concept of market structure. I didn’t understand this at first either, but later I realized why some support and resistance levels are broken, and why sometimes judgments are wrong — it’s all because you haven’t truly understood the market structure.

Market structure refers to the regularities formed by the high and low points of price movements during the process. Imagine connecting all the extreme points of price, creating a zigzag line that fluctuates up and down. This line can tell you the current state of the market. Mastering this essentially means mastering the basics of naked K trading.

How to identify market structure? I’ve summarized three key steps.

First, find important support and resistance levels. These are areas where buyers and sellers fiercely battle, best marked on larger timeframes, such as hourly or daily charts. Besides obvious swing highs and lows, pay attention to some special levels: psychological round numbers (since many traders watch these, they tend to act as support), Fibonacci retracement levels at 50% and 61.8%, pivot point systems, dynamic support lines (like moving averages), and convergence zones of multiple support and resistance levels. These areas are often critical turning points in price.

Second, determine the trend direction. The market only moves in three ways: up, down, or sideways. An uptrend shows progressively higher lows and highs; a downtrend shows the opposite; sideways is oscillating within a range. Once you identify the main trend, you can set your entry strategies accordingly. Many successful naked K traders trade in the direction of the main trend, which often results in higher win rates.

The third element is understanding market psychology. This is usually reflected through price patterns and candlestick formations. Price patterns mainly fall into two categories: reversal patterns (head and shoulders, double tops/bottoms, V-shape, etc.) and continuation patterns (triangles, wedges, rectangles, etc.). Candlestick patterns are also divided into reversal (hammer, engulfing, etc.) and continuation (morning star, three soldiers, etc.). These patterns reflect the balance of buying and selling forces. For example, if a head and shoulders pattern forms and the right shoulder is lower than the left, it indicates that sellers may be gaining the upper hand.

Let’s take an example. On a 1-hour chart of a certain asset, if the price breaks through the neckline of a double top, that’s a good entry signal. From a trend perspective, it might shift from an uptrend to a correction; psychologically, buyers are losing strength, and sellers are gaining momentum; finally, breaking the neckline confirms a sell signal. This is the complete process of analyzing with naked K trading.

Honestly, price action trading is considered one of the most powerful technical methods for profitability in the market, but ultimately, whether you can make money depends on yourself — your experience, mental resilience, and understanding of the market. Any technique is just a tool; continuous learning and accumulating real trading experience are the real keys.