Naked Forex: Complete Study Guide & Workbook

The Big Idea

A candle means more when you know where it formed and what decision it permits. Nekritin and Peters organize their approach around support/resistance zones, a price-action catalyst and a plan for entry, exit and risk. The later chapters put practice, personal routines and reactions to losses alongside the chart patterns.

This workbook turns those ideas into reviewable decisions. Identify the zone before the reaction. Write down what qualifies as a catalyst. Keep the signal separate from a later order trigger and an actual fill. Then assess whether the chosen exit and costs leave the trade attractive.

Read the book alongside this companion. Each lab assumes you have read the matching chapter and inspected its charts. These are original explanations, calculations, research tasks and questions, not a condensed replacement. The supplied title and copyright pages credit both authors and identify John Wiley & Sons, Inc., ©2012. The copyright page lists print ISBN 9781118114018 and the supplied EPUB’s ISBN 9781118237496. No numbered edition is stated. References use chapter numbers because EPUB pagination varies.

If You Remember Only One Thing

Zone, catalyst, execution and risk are separate decisions. A beautiful rejection candle does not prove the zone was identifiable in advance, that an order filled at the desired price or that the stop capped the loss.

60-Second Summary

• Use zones as predeclared areas rather than lines adjusted to fit the next candle.
• Study breakout/retest, engulfing, two-touch, rejection-tail, gap-reversal and trend-continuation ideas separately.
• Distinguish the core pattern from the authors’ preferred optimizers and your own numerical definitions.
• Test with the future hidden and keep a complete candidate log.
• Exit choice changes both the average payout and the proportion of wins.
• Confidence should follow evidence and process discipline; it does not guarantee an edge.
• Plan for correlated positions, costs, adverse execution and a reason to pause or reject the method.

Contents

Quick Study Guide

Seven Study Blocks

Split each block across as many sittings as needed. The goal is a complete evidence trail, not a seven-day profit target. All required work can use paper calculations and historical observation; no live account or paid service is required.

Complete chapter-to-lab map

Chapters 1–4: Establish the Evidence Before the Pattern

Chapters 5–10: Study Each Catalyst as a Different Hypothesis

Chapter 11: Exit the Position You Actually Hold

Chapters 12–16: Keep the Method and the Evidence Accountable

Claims, Contradictions and Clarifications

These selected notes identify issues that affect study or execution. They are our analysis, not additional rules attributed to the authors.

Four Reusable Worksheets

Copy these into a notebook or spreadsheet. They are templates, not forms that save data on the page. Use fictional or redacted paper examples.

1 — Zone and Observation Log

2 — Ten-Field Setup and Paper Trade Card

3 — Research Comparison Sheet

4 — Risk and Weekly Review

Pine Indicator: Zone Rejection Study

The book trades without conventional technical indicators. The code below is an original annotation tool for research, not a claim that the authors use Pine or that their discretionary approach has been fully automated. It studies selected Chapter 8 geometry around one user-defined zone.

Use standard price bars or candles, preferably the daily or four-hour interval for the initial study. Set positive lower/upper zone boundaries, then set the date from which the zone was actually identifiable and the final date through which it is valid. Default boundaries are zero, so no candidates appear until a valid zone is supplied. A historical zone entered after seeing the outcome does not become valid evidence simply because the software can draw it.

What This Indicator Shows

Gray boundaries show the user zone during its declared active interval. A confirmed bullish candidate must overlap that zone and close above it; a bearish one must overlap and close below. The open and close must fall in the appropriate outer third of the candle and inside the previous candle’s range.

Our additional definitions require a rejection wick at least twice the body by default, with a one-tick minimum body denominator for dojis; a fresh low/high relative to seven prior bars; and, by default, a range larger than the prior ten ranges. These are explicit research choices. The extreme test is a shortcut for left-side separation, not the authors’ full visual assessment of “room to the left.” The code does not discover important zones.

On an accepted candidate’s close, teal and orange lines freeze an entry reference beyond the signal extreme and an invalidation reference beyond the opposite extreme. The buffer is in minimum ticks, not pips. A two-tick buffer on a five-decimal EUR/USD feed can be only 0.2 conventional pip; choose it deliberately. These are visual levels, never orders or verified executions.

State, expiry and replacement

1. Accept one confirmed candidate only while no reference pair is active.
2. Keep its original reference levels unchanged; new candidates cannot overwrite them.
3. Retire the pair if its invalidation reference is touched, the zone becomes inactive or its age exceeds the chosen lifetime.
4. The default lifetime includes the candidate bar and the next three bars. The pair retires at the close of bar four after the candidate; no new pair is accepted on that retirement bar.
5. A later eligible candle can create a fresh pair. Touching the entry reference does not change state because this tool does not model entry or position management.

Markers and state changes require a completed chart bar. There is no higher-timeframe request, future pivot or backdated marker. A zone starts on bars whose opening time is at or after the selected start, and remains active only if their closing time is at or before the selected end. Reference lines can remain displayed during a developing bar until retirement is confirmed at its close; this does not imply a protective order was active.

What This Indicator Does Not Show

It does not implement all six catalyst families, certify the quality of the manually selected zone, infer institutional orders or reconstruct bid/ask execution from OHLC. It does not produce account returns, fills, position sizes or tested profitability. If a future bar touches both reference levels, the price sequence may be unknown; retirement is not a trade-loss statistic.

Validation status

Candle geometry, reference-state behavior, independent arithmetic and the HTML-to-raw-code round-trip were checked. The script has not been compiled in TradingView or chart-tested. No historical performance, successful live alerts or execution results are claimed. Compile and compare with the fixture below before using the display. The code is collapsed and can be selected and copied manually.

//@version=6
indicator("CandleChasers Zone Rejection Study", shorttitle="CC Zone Rejection", overlay=true)
if not chart.is_standard
    runtime.error("Use standard price bars or candles, not a synthetic chart.")
zoneLow = input.price(0.0, "Zone lower boundary")
zoneHigh = input.price(0.0, "Zone upper boundary")
activeFrom = input.time(timestamp("01 Jan 2026 00:00 +0000"), "Zone known from (bar opening time)")
activeUntil = input.time(timestamp("01 Jan 2099 00:00 +0000"), "Zone valid until (bar closing time)")
tailMultiple = input.float(2.0, "Minimum tail / body ratio (our definition)", minval=1.0, step=0.25)
roomBars = input.int(7, "Prior bars for extreme proxy", minval=2, maxval=100)
largeRange = input.bool(true, "Require range larger than prior 10 ranges")
bufferTicks = input.int(2, "Reference buffer (minimum ticks, NOT pips)", minval=1)
life = input.int(3, "Reference lifetime after candidate (bars)", minval=1, maxval=30)
zoneValid = zoneLow > 0 and zoneHigh >= zoneLow and activeUntil > activeFrom
active = zoneValid and time >= activeFrom and time_close <= activeUntil
r = high - low
body = math.abs(close - open)
upperWick = high - math.max(open, close)
lowerWick = math.min(open, close) - low
previousLow = ta.lowest(low[1], roomBars)
previousHigh = ta.highest(high[1], roomBars)
previousMaxRange = ta.highest((high - low)[1], 10)
ready = bar_index >= math.max(roomBars, 10) and r > 0
insidePrevious = open >= low[1] and open <= high[1] and close >= low[1] and close <= high[1]
largeEnough = not largeRange or r > previousMaxRange
zoneOverlap = low <= zoneHigh and high >= zoneLow
bullGeometry = ready and insidePrevious and largeEnough and math.min(open, close) >= low + 2.0 * r / 3.0 and lowerWick >= tailMultiple * math.max(body, syminfo.mintick) and low < previousLow
bearGeometry = ready and insidePrevious and largeEnough and math.max(open, close) <= low + r / 3.0 and upperWick >= tailMultiple * math.max(body, syminfo.mintick) and high > previousHigh
bullCandidate = active and zoneOverlap and close > zoneHigh and bullGeometry
bearCandidate = active and zoneOverlap and close < zoneLow and bearGeometry
var int side = 0
var int born = na
var float entryRef = na
var float stopRef = na
bool bullEvent = false
bool bearEvent = false
bool retiredEvent = false
if barstate.isconfirmed
    if side != 0
        tooOld = bar_index - born > life
        invalidated = side == 1 ? low <= stopRef : high >= stopRef
        if not active or tooOld or invalidated
            side := 0
            born := na
            entryRef := na
            stopRef := na
            retiredEvent := true
    if side == 0 and not retiredEvent
        if bullCandidate
            side := 1
            born := bar_index
            entryRef := high + bufferTicks * syminfo.mintick
            stopRef := low - bufferTicks * syminfo.mintick
            bullEvent := true
        else if bearCandidate
            side := -1
            born := bar_index
            entryRef := low - bufferTicks * syminfo.mintick
            stopRef := high + bufferTicks * syminfo.mintick
            bearEvent := true
zoneA = plot(active ? zoneLow : na, "User zone lower", color=color.gray, style=plot.style_linebr)
zoneB = plot(active ? zoneHigh : na, "User zone upper", color=color.gray, style=plot.style_linebr)
fill(zoneA, zoneB, color=color.new(color.gray, 90), title="User-defined zone")
plot(active ? entryRef : na, "Frozen entry reference only", color=color.teal, linewidth=2, style=plot.style_linebr)
plot(active ? stopRef : na, "Frozen invalidation reference only", color=color.orange, linewidth=2, style=plot.style_linebr)
plotshape(bullEvent, title="Confirmed bullish study candidate", style=shape.triangleup, location=location.belowbar, color=color.teal, text="Study", size=size.tiny)
plotshape(bearEvent, title="Confirmed bearish study candidate", style=shape.triangledown, location=location.abovebar, color=color.red, text="Study", size=size.tiny)
plotshape(retiredEvent, title="References retired", style=shape.xcross, location=location.top, color=color.gray, size=size.tiny)
var table status = table.new(position.top_right, 1, 1)
if barstate.islast
    table.cell(status, 0, 0, not zoneValid ? "Set valid zone boundaries and dates" : "Study candidates and references; no fills", text_color=color.white, bgcolor=color.new(color.teal, 20), text_size=size.small)
alertcondition(bullEvent, "Bullish zone study candidate", "Confirmed bullish zone-rejection study candidate on {{ticker}} {{interval}}. Not an execution.")
alertcondition(bearEvent, "Bearish zone study candidate", "Confirmed bearish zone-rejection study candidate on {{ticker}} {{interval}}. Not an execution.")

Hand-check the geometry and reference state

Use the fictional Chapter 8 candle: O=1.1020, H=1.1030, L=1.0970, C=1.1025; previous candle range 1.1015–1.1040. Assume a zone of 1.0980–1.1000 that was identified earlier, all seven previous lows above 1.0970, and all ten previous ranges below 0.0060. The 50-pip lower wick exceeds twice the five-pip body, and both open/close lie in the top third and previous range. These assumptions allow a bullish study candidate.

Research Lab: Does the zone add information?

Our hypothesis is that the defined rejection geometry near a predeclared zone has different subsequent price behavior from the same geometry away from zones. This is a question to test, not a finding. The indicator displays the zone-qualified candidates only; the geometry-only comparison needs a separate manual log using the same definitions.

1. Freeze the study: one pair, feed, standard daily chart, chronological dates, geometry rules and six-bar observation horizon. Select zones using only prior data and record their activation dates.
2. Separate development from review: use the first two-thirds of the interval to refine definitions; reserve the final third for an unchanged review. Preserve every trial rather than selecting the best variant silently.
3. Log candidates: zone-qualified and geometry-only control observations, direction, close C, rejection reason and available timestamps. Do not count one candle in both comparison groups. Mirror the indicator’s active-reference suppression for the zone sample and record excluded overlapping candidates.
4. Measure observations: direction-adjusted six-bar close change = 100 × direction × (C_t+6/C − 1). Worst adverse excursion over the next six bars is 100 × (minimum low/C − 1) for long candidates or 100 × (1 − maximum high/C) for short candidates. Exclude the candidate bar. These are price changes, not earned account returns.
5. Limit overlap: keep the first accepted observation in each group, then skip the following six bars. Exclude incomplete horizons and record why. Keep long and short results separate initially.
6. Compare: report counts, medians, ranges, adverse excursions, month-by-month clustering and differences between development and review periods. A small or unstable difference weakens the hypothesis.
7. One robustness check: repeat with a five-bar versus seven-bar extreme proxy while preserving the other rules. Do not label the better-looking variant independently validated without new data.

No historical market-data experiment was run for this workbook. Even a descriptive difference would not establish a tradable advantage without executable prices, costs, financing, an exit policy, size, and sensitivity to market selection. OHLC data cannot supply unavailable depth or institutional intentions.

Capstone: Build a Reviewable Price-Action Study

Choose one catalyst chapter rather than combining all the patterns. Your result may be a decision to reject or defer the method. Use paper data and fictional capital assumptions.

1. Map the zone: boundaries, evidence available before the test, activation date and counting convention.
2. Specify the catalyst: source conditions, optimizers and every numerical choice added by you.
3. Build the timeline: signal close, earliest order submission, entry/no-fill convention, pre-entry invalidation and expiry.
4. Calculate risk: quote units, pip/tick value, account conversion, planned loss, allowance and one scenario exceeding it.
5. Compare exits: apply one zone-based policy and one trailing or split policy to the same observations; use position weights and causal update timing.
6. Review: retain a failed candidate, a non-triggered candidate, an ambiguous bar and a rule-compliant loss if modeling outcomes. Separate adherence from net performance.
7. Conclude: continue paper research, revise, defer or reject. State the evidence that would change your decision.

Completion criteria: finish all sixteen chapter labs, the four worksheets, the manual indicator fixture and the capstone. Aim for 16/20 or higher with no criterion below 2. Any unresolved lookahead, quote-unit or unsupported-fill error requires revision regardless of score. This is an educational self-check, not a qualification or evidence that a method will make money.

Verification Resources

Use original documents to check technical behavior and product risks. They do not validate the authors’ performance claims. The book’s external tutorials and software offers are historical pointers; they are not required for these exercises and current availability was not verified.

Final Takeaway

A clean chart can make a decision easier to describe. It does not remove uncertainty. Keep the zone fixed, measure the catalyst, distinguish observations from executions, and let complete evidence—including failures—determine whether the method deserves further study.

Risk Disclosure

This workbook is for education and independent research, not personalized investment, financial, tax or legal advice. Forex and leveraged products can produce substantial losses, potentially beyond the deposit depending on the product and applicable protections. Gaps, spreads, commissions, financing, slippage, liquidity, dealer risk and correlated exposure affect outcomes. Stops and entry-level exits do not guarantee a maximum loss or a zero-cost result. Fictional examples omit costs unless stated and are not actual results. The indicator does not establish profitability or simulate execution. Past performance does not guarantee future results; obtain appropriately qualified advice for your circumstances.

This independent companion is not affiliated with, endorsed by, sponsored by or authorized by the authors, Wiley or other organizations mentioned.