Six Forex Trading Tips for Newbies

By: Gerald Njuguna


You have decided to be a trader in the forex market, and you have no idea on how to start. Let us first start by defining what the forex market is and what it does.

The expression forex, also referred to as the foreign market is a market for the sale and purchase of all kinds of currencies. It grew out of the early 1970's when floating currencies and free exchange rates were introduced. At this time, the forex market traders would be the people who place the value of one type of currency against another.

Now, the market forces determine the value of a currency against another. One unique facet of the Forex market is that hardly any trading qualifiions are required of anyone intending to exchange there.

Independence from external control ensures that only the market forces influence the currency prices. As the largest financial market, with transactions reaching up to 1.5 trillion U.S. dollars, or USD, the currency moves so quickly, it's impossible for one investor to substantially impact the price of any major foreign currency.

Additionally, unlike any stock that is rarely traded, forex traders are able to open and shut any positions within minutes, because there are invariably a number of willing buyers and sellers.

1. The very first thing you have to do is open a forex account. You will have to fill an appliion form which includes a margin agreement saying if the broker is going to be permitted to intervene at any trade the moment it appears too risky. Because most transactions are done using the broker's money, it is only logical that he protect his interests. However, once you have established an account, you can finance it and start trading in the forex market.

2. Adopt a trading egy, that has turned out to be effective for you. Bear in mind that egies will work differently for different traders, and thus don't try to embrace a egy that works nicely for a different trader. It may backfire. Both accessible egies are either technical analysis or fundamental analysis. A combination of both is a more favored choice for experienced traders.

3. Understand that prices move by trends. Forex has a popular saying, ”The trend is your friend” There are particular movements that have been studied over several years in order to identify a pattern in the fashion. These trends will need to be understood in order to understand a fantastic trading egy. For smaller accounts that are $25,000 and under, trading using a tendency may help improving your odds when compared to bi-directional trading. Many newbie's will look to trade in any direction, when they should be trading with a fad.

4. Make sure you know which are the top five currencies pairs from the forex market. These are USD/Yen, Swiss franc/USD, Euro/Yen, Euro/USD and Pound/USD.

5. For newbies, it is a good idea to maintain two accounts to ensure you learn how to play the trading game. Maintain one genuine account, one that you will actually use to exchange real money; and the next account should be a demonion, one that you can use to test alternative moves from the trading game. It is simple to use your demo account to shadow the transactions on your actual account so that you can widen your stops to see if you are being overly conservative or not.

6. Always examine the one hour four hour and daily charts that concern your own transactions. Although you can exchange at 15 and 30 minute time intervals, doing so takes a couple of dexterity.

Source:http://newbies4rex.blogspot.com/

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Originally Posted by ;

Great post Braveheart!

I agree with of your points. Even though you're being very honest, there is no method to relay to newbies the challenge that's before them. If you don't have a buddy to reveal how, its like learning a new language. . .so bothersome at first.

Along with this trend is your friend saying, I would like to bring this up: There are older traders. You will find daring traders. However, there are no old bold traders.

That I think the major reason new traders lose much, is because they are edued(by their own broker) that its essential to over leverage.

Another suggestion besides trading using demos is when you begin trading a live account begin small. Use a broker that allows unit pricing or at least lots. You may always add more money later if you are successful. Once its gone but you can not get it back.

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I resent the fact that you claim I am not Bold but recognize that I am definately Old:
Abriged Bio:
First Trade 1970something
Last Trade Yesterday.

= 30 years Trading and do very well thankyou.
1; 2 decades or even 5 years IN isn't striking to me. Tell me you've been doing this Trading item for a Decade or even more I could sit straight up and listen. Until then, you are Coming Along.

No slam intended.
Only as I see the surroundings you are thinking of stepping into.

Novice day traders often face ”paralysis by analysis” since they get wrapped up in watching the candles on their display and can't act fast when opportunity presents itself. If you're disciplined and work your plan, actually placing the order ought to be automatic. Decide on a proportion of your complete day trading budget which might be anywhere from 2% to 10%, depending on how much cash you've got and don't permit the size of your position to exceed it. You may miss out on an opportunity in the market.

I want to go over in your very last point I mean, time period issue! Yes, higher time frames are comparatively secure than lesser time frames! If you follow any trend which may be broken in any time if your trend is contrary to the high time frames such as D1.

Thank you a lot for this thread! Yes, using a specific trading egy is very much crucial for being an effective Forex trader! But, it's not simple job to produce a profitable trading egy or egy! I see, effective traders spent enough number of sessions on profitable trading platform! Incidentally, in my own live trading I utilize both kind of analysis! On the other hand, I trace money management and risk management policies in my live trading.

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Originally Posted by ;

Thank you a lot for this informative thread! Yes, having a specific trading egy is very much crucial for becoming a successful Forex trader! However, it's not easy job to produce a profitable trading egy or system! I see, successful traders invested enough number of sessions on profitable trading platform! By the way, in my live trading I utilize the two kind of analysis! On the other hand, I trace money management and risk management policies within my live trading.

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If you have most powerful analyzing egy free of money direction, then it will be useless. That's why we must focus on cash managing approach first of all if we want to become maximum outcome by our egies.

Nice post. Great trading approach Good money management = the maximal result. However, before live , you ought to use it in demonion to observe the performance the way that it works.

I think that the most useful tips are:
1. Great risk-management
2. Follow the trading egy
3. Dont trade against tendencies.
lmho

No 3 ,
is a frequent trading attitude for the newcomers. They exchange again and again. They try to take revenge from here by more than trading and they become loser.

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I believe that the most useful tips are: 1). Good risk-management 2. Follow the trading egy 3. Dont trade against trends. Lmho

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What you believe about Good risk management? I think There's no Fantastic risk management because what's unsure in here

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Originally Posted by ;

I believe the most useful tips are: 1). Good risk-management 2. Adhere to the trading egy 3. Dont trade against tendencies. Lmho

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Yes, these points are important! I visit max traders lose their money since they can't adhere to the proper means of money management! In my trading I use a fixed risk-reward ratio and that is my way of after money management policies in my personal trading!

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Originally Posted by ;

quote Yes, all these points are significant! I visit max traders lose their cash because they can not adhere to the appropriate means of money management! In my trading I utilize a predetermined risk-reward ratio and that is my way of after money management policies in my personal trading!

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So accurate Money Management is one of the keys to achievement

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Originally Posted by ;

I think the most useful tips are: 1). Good risk-management 2. Adhere to the trading egy 3. Dont trade against trends. Lmho

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Hi iamvolosha,

Let me comment a little bit Your tips from my perspective:

1. Good risk management is obviously fine, but not necessarily straightforward. Should you take one transaction at one time only it's quite simple to calculate risk-reward ratio. However for different forex egies ratios that are different will get the job done. Other issue is when You transactions dozens of transactions in the exact same time and on various timeframes and pairs. Money management requires different egy and is much more intuitive than stringent.

2. Adhere to the trading egy - yes, but if it's a terrible egy (most of them I;ve seen FF) You should know when to lose it.

3. Do not trade against trends ?? Yes but only if You concentrate in trending egies. If You specialize in scalping / counter tendency / no-trend trading, then this is quite awful tip.

Cheers!

Hi to all:
I've a query about Money Management at gerneral:

1)
Is: 1 news = 1 position? (e.g. 1% of the available margin)
Even when I trade this news with 3 currency-Pairs?
Or would it be better to calculate:
1news = 3 positions (3 currency-Pairs) / respectively 6 position involving hedging?
3 positions 1% of the available margin

two)
when I trade GBP news with 3 places and USD with 6 positions:
if I trade every position concerning precisely the same quantity? =gt; GBP 1% of the available margin / USD 3 percent of the available margin
thus a USD trade has dual risk and destroys all wins on GBP?
Or would it be safer to trade each news about exactly the same quantity?
So every news are equal but my trading amount of each currency pair in GBP is as dual high (1%) as in USD (0.5%)?

How can you manage it?
That I´m looking foreword to hear of your experienes
Chris

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Originally Posted by ;

I think the most useful tips are: 1. Good risk-management 2. Adhere to the trading egy. Dont trade against tendencies. Lmho

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I concur with your 1st and 3rd point straightly! By the way, I see many traders begin to follow their trading egy with no enough experimentation! They try to experiment their trading systems from the live account! That's too much hazardous! If you're trading with a profitable egy only then you can follow it otherwise not.

Get a trading platform, that has ended up being effective for you. Keep in mind that processes will operate for a variety of traders, and thus don't endeavor to get a system that functions admirably for a different broker. It might reverse discharge . The methodologies are evaluation or investigation that is fundamental. A blend of the two is a decision for seasoned traders.

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Good hints. The largest mistake newbie does is they treat trading as a betting. They come here to get rich immediately. But they are unwilling to learn from themselves. However, the truth is you need to be proficient in order to generate money consistently. If you can not spend your time don't invest on the market.

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There no livelihood in the world that can make you rich overnight. Keeping this mentality is component of immaturity. Be patience , be more profitable.

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Originally Posted by ;

quote There no livelihood in the world which can make you rich overnight. Thus, keeping this mindset is only a component of immaturity. Be cautious , be more profitable.

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I totally concur. Any notions that you can get rich quickly from trading is produced by unethical marketing. For all those lies do not fall.

I'd love to add to your list.

Learn and practice sound money management principles.

In fact over almost anything else it appears from the worlds of both trading and gambling which bad money management is the number one killer. Individuals placing trades with FAR too big of a lot dimensions for their account dimensions. Traders not closing losing trades.

By maintaining your trade size appropriate for your account it makes it a bit easier to trade rationally. Keeping hard and fast rules for when to close a losing transaction may prevent a small reduction from turning into a very account breaking reduction.

Money direction is (IMHO) probably the one most significant thing for any new trader to learn and grasp.

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Originally Posted by ;

quote I totally concur. Any ideas which you can get rich quickly from trading is produced by unethical advertising. Do not fall for all those lies.

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We know this kind of true fact, but we can not prevent the mindset to bring in profit rapidly when trading . It's true.

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Originally Posted by ;

quote We all know this type of true reality, but we can't prevent the mindset to bring in profit rapidly when trading . It's true.

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That mindset is made and fed, as I mentioned, largely by unethical advertising from brokers that guarantee people to become rich fast, and newbies, being ignorant, consider it.

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Originally Posted by ;

That attitude is created and fed, as I mentioned, largely by unethical advertising from brokers that guarantee people to become rich fast, and newbies, being dumb, believe it.

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I disagree that it's the brokers. I think it's people that sell things (systems, novels, whatever) that guarantee make X pips per day or anything. Brokers are typically pretty darn careful with not making claims since most of these are in the united states or Europe where that type of stuff is frowned upon and brokers are under a lot of examination.

Also, lets face it, forex in general is popular with people seeking get rich quick with little effort. (it's no actual work to sit down and stare in a chart) This leads some to believe a lot of nonsense simply because the want to believe it's possible.

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Originally Posted by ;

quote I disagree that it's the brokers. I think that it's individuals that sell things (systems, books, whatever) that promise make X pips per day or whatever. Brokers are typically fairly damn careful with not making claims since most of these are in the united states or Europe in which that type of stuff is frowned upon and brokers are under a lot of scrutiny. Also, lets face it, Foreign Exchange generally is popular with individuals seeking get rich quick with very little work. (it's no actual work to sit and stare at a chart) This leads some to think a lot of crap because...

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I think it's often equally. You make a great point about the egy sellers, but there are also a good deal of bucketshops who make the most of individuals. Obviously, not all brokers are like this. There are loads of reputable businesses who don't do this, but unfortunately an ignorant newbie does not necessarily understand how to differentiate between the two. I didn't understand when I was a newbie, and I got burned.

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Originally Posted by ;

quote There's no profession in the world which may make you rich overnight. Thus, keeping this mindset is just a component of immaturity. Be patience , be profitable.

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Forex trading can't make us profitable within very short time , but by means of this market place we could earn more profit rapidly than other businesses in the event that you're able to guarantee some inevitable parts of trading.

Yes it is. And from all essential parts long term wisdom and experience is more costly. And we the traders have to acquire this by passing quite a while.

Knowledge and experience appears similar but there's a huge different between two , you can acquire good knowledge within short time but to be experience in Forex trading is not a simple task , minimal you have to pass 6-8 years within this market place to acquire real trading experience that always supportive to forecast the market at any situation.

Great post Braveheart!

I agree with all of your points. Even though you're being really honest, there is no way to relay to newbies the challenge that's before them. If you don't have a buddy to show how, its like learning a new language. . .so fruing initially.

In addition to this trend is your friend saying, I'd love to bring up this one: There are old traders. You will find bold traders. But there are no old bold traders.

I feel that the major reason new traders lose so much, is because they are taught(by their broker) that its required to over leverage.

Another suggestion besides trading with demos is if you begin trading a stay account begin small. Use a broker which allows particular unit pricing or at least micro lots. You may always put in more money later if you are successful. After its gone but you can't get it back.