The real Basics - how to start and how avoid the traps

QUESTIONS ABOUT TIMEFRAME AND PAIR WILL TAKE YOU TO MY IGNORE LIST!!!


Before i will start, i will make clear that i am not tollerate mad behavior.
Do not post unsuitable informations, pictures, videos, links and so on.
Respect eachother, respect that this thread is for the real new ones, or for those who want to restart, the really early days and must not become a showcase of your indicator list.
Here we will not give a secret trading system, here will never find a complete system.

If you go against my rules, you will find you on my ignore list very fast.

Some words about my motivation building this thread:

I do this, because i miss the point in my starting days and wish i have had such a place. I am not aware about how important this step watching the chart naked is!
Many misleading/false informations are around, not only here.
Motivate newcomer to build the own view on the chart, because it give not "the only way".
Reduce the fear making something wrong, that is in the first stage present.

Knowing the traps! If you new to trading you will so easy flood with unsuitable and often false informations. Myths are all around and will easy destroy your way to learn, sometimes it will cost you several years. Be careful! Only what YOU able to see, will YOU later trade.
How to avoid a false start, here we go ...

- ignore all systems first
- do not put indicators in your chart, not one
- never think about robots, never
- do not give your attention to multi timeframe analysis that early
- do not take for real that you must trade without emotions, you are human, you breath, you have all the emotions avaible
- do not think about you must have higher hit rate to be have in long run profit, no need to have 50% and more, it is statistic, as you put your hand on a cold and on a hot hotplate, would you have lukewarm hands?
- do not take candle patterns in your tool box, no need for it
- zoom to strong in chart without have a clue how the chart is unzoomed

What will help you to start, here some points ...

- prepare a place that you can concentrate in calm, no hectic, no influence that must you over and over again break from training
- pick eye friendly colors, not too many, not too different, invest in good monitor if you able to do this, make enough breaks
- pick ONE pair, metal or whatever (majors are prefered) and one timeframe you are able to trade, not your life must fit your timeframe, the timeframe must select after the time you can invest for trading
- zoom this chart complete out, so you can not see a single candle
- take pencil and paper and watch the same chart over and over again, note what you see, what is price making. Are things visible you see more often? Is a connection in any form? Do not underestimate how important this is you do it like your grandparents done in the past!
- bring your results in a form, can you sort some things you have over and over explored?

Some points that often new trader want to improve, that come in the next steps (first learn read the chart as it is). Do not take care about yet ...

- Think about percentage growing in a day/week/month
- Risk for one trade, 1% or more/less
- Reward for one trade


Read the chart as it is - Training

I will in future upload single charts without timeframe, without price ruler on the right and time on the bottom.
New trader can jump in, pick the picture and draw, explain what can he see.
You do good if you print it out and do manual if you really new to trading, because you will learn that way more deeper. It is not a must and can be done with software also.

If we have minimum one rookie picture i search for a senior member to show us another view.

... now here will some great posts take place agin in the first post.

from jmflukeiii in post 140

"Michaels response hit the nail on the head; just watch the chart without the pressure of making a decision (meaning don’t try to trade, just watch). Mark a place where price seemed to turn; see what happens when it gets back there: does it break, and by how much, and with what force, and what happens after that? Does it hold, and if so, how much did the line break before it held, and how quickly did it reverse? My first mentor said you need nothing more than the price and manually drawn lines; it took a long time to figure out, but he was right. Where to draw the lines is the question, and what to do with the price around those lines is the next."

from jmflukeii in post 144

"Well, I suspect there are all sorts of ways people make trading decisions including in depth statistical analysis. The bottom line is markets are an auction; price moves up until there are no more buyers (or there is more aggressive selling than buying) and moves down until there are no more sellers (or more aggressive buying than selling). RSI, Stochastics, MACD, all that has nothing to do with what is happening. They can perhaps be used to create a consistent set of entry and exit conditions, but as you are a 'data guy', wouldn't you rather try to "see" as best you can what is actually happening?

What is actually happening is price moves up to a certain price and either (a) there are no more buyers or (b) there are more aggressive sellers than buyers. This creates a swing point. What happens the next time you get back there? Will aggressive sellers defend their position (its an analogy, its more likely institutional orders that have a VWAP target for their fills), or will Sellers have now been exhausted (i.e. disappeared) and Buyers are back in control. As a 'data guy', you can define what constitutes a relevant swing point (i.e. depth of pullback from prior swing points, duration of existence before touched again), mark those points, and then gather statistics about what happens when price returns. Does it (a) bounce off and if so, what was the overriding trend at the time (left side of monitor is higher or lower or equal to right side) or (b) does it break and what happens next? How much of a break constitutes a "break" vs. a "failed break".

I don't believe this business is a black and white business, there is lots of gray area. Everything looks somewhat similar to something before, but never exactly the same.

Last think I'll say is that I think there are only 3 types of entries: pullbacks, breakouts, and failed breakouts. To use them, you need to understand (a) what is breaking or failing to break and (b) what is the main trend that is currently "pulling back". If you can figure out (a), then you will know what (b) is. I'm not trying to be cryptic, and hope it doesn't come off as that, but its for everyone themselves to decide I think. I have posted in this thread about how I define "trend" and how I find the points that break to change that trend."

Now i post the first example to start with.
You have 3 days time for make some notes and no posting your result before wednsday from today.
I only invite a senior member if we have minimum 3 rookie pictures and only one day after the newbie pictures are post here. This because we want first see what the newbies done.

... and here we go ... have fun and take the time for it.

All is avaible in this picture to trade in profit!

You look to be my type of man bro. Trading on clean charts I love it.

Thank for your words. I lost money and time in my first steps. Hope it will help new trader to build confidence in the own view of the market. In these days many good things are lost and the hunt for shortcuts all around, not only in trading.

subscribe, join always learning

Hope we get tomorrow some results that rookie see in the chart above.
You can not make something wrong and have no panic about that. Please if you new to trading or in the first year, post the result. We all can learn, if we respect eachother, respect that market give more as one view on it.
I hold my attention high and cut mad behaviour very fast here, so newbies do not get in trouble and fear to post again after such attacks.
Have a nice evening.

Hi Michael,

Interested to see how things progress.

Subscribed

I also and hope we got some helpful pages. I see me as connection, more as moderator. Will be no showcase of my trading ideas. My idea behind is to have a place who is for the real beginning. How the first steps to read a chart as it is. It was something iam not aware about in my starting days and i must say was a big failure.

Hi,

I´m just very new to forex but I try to explain what I see in the chart:

price went down from A--> A´--> B to C.
After that price went up to D. (large rising)
From D to E, I see continous movement up.
Movement down (F) is still higher than D.
Also with I and F, K and I, M and K (low point is higher than last low point)
Analog: High points E, G, H, J, L are higher than last high points.
That makes me confident that price will continue moving up.
After low point M (or a little bit below) I expect price going uo to O (in red).
Overall I see a trend from A to M (blue line) that is going up.

Hope this kind of input you had in mind while creating this thread!?
Looking forward to seeing other input / views.

Regards
Peter

First, many thanks you have make the work. Pretty nice explaination, well done.

Do have miss something? Can you trade such a chart without have trouble about missing a part?
If you the only who post, i am be sure after your work, i will PM a senior member to show us his view also. This will be fair as you print it out and do drawings manual. We wait for more input here.

I like it

Next picture i create more printer friendly if someone do also print it out and do drawings on paper. It is not a must, but better for learning.

Hi Michael,

For what they are worth here are my Observations.

Really nice view of the chart, well done.
I know you have a good thread, worth following for the new ones.

Okay, now we went over to the next example. Here we go ...



Now it is more printer friendly, have fun. It is not a must, as stevepatt done you can do it also with ypur pc. If you really new i would you suggest do this manual for deeper learning what you are doing. You can post from now on, no limit waiting for three days anymore. Only thing i will wait up is we must have first rookie pictures, before i will invite senior member again.

Much you ask here and good you do it. I pick some points now and edit this post later because i must do it if i have avaible time.

Senior member:
I invite a member (flag colour is not the point, longer as one year, smart conversation done in past, price action) only after having one rookie picture and i select after what seeing what post in the past by these members. A member who is active doing dasboard trading is not suitable. Hope this is clear.

Points on the chart:
Stevepatt done right, he mark what comes infront watching chart without building a system. Before you start to trade you do good watch chart in the own way, make the own thoughts on it. It is here for the early days.

Candles:
You will need the informations not that close and all is in the charts visible to trade in profit. Can you not trade the two charts, as they are? We will see in future that this view is more easy trade from. With more inpute false or not is it not easy to drop this and start from another view. I know this, because i done it. It is myth that candles must be visible and if you trade this way. Your 10 years says nothing. What you like more cheese or meat? It is a personal choice. Some are able to trade a line chart and do it also well.

Money management:
If you today install Mt4 or done in the last days, you will really knowing money managment? Before you not able to read the chart, do not hurry a few steps infront. First it is good to watch what is going on as said earlier. These steps came later and we cover it here not. I wrote in first post we will never find a complete system. It is not nessasry for building the basic view on the chart.

My interaction:
I hold me here back, posting charts, because is see me as connection and moderator. I have also my own view on the charts and will the thread make not to showcase what i see, spread my ideas. I will animate new trader to build a own way to trade. It is important step and will move you around wasting many years.

Better compare this thread not with other threads. It will be build in another way.

After some minutes of thinking you to ignore, i do it. All is said and i will have here a clear place. Sorry that you are not able to got it here.

Hi Micheal
Here's my notes
Cheers
Nick

A nice chart with a good and clean informations, well done.
A question also here: Can you trade such a chart, or you miss something, need more input before enter a trade?

I like it, good work.

Thanks Michael. Its easy to look at a chart in hindsight and say "I would have entered here, here and here..." But realistically there would have been one trade I would have taken with confidence (marked on chart) Whenever I see a sharp move like that, 9 times out of ten price almost always returns to the origin of the spike. I've only recently done away with indicators etc (last few months) Daunting to start with but as each week passes I'm finding it a little bit easier!
Cheers