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as a new trader.........

  • #1
  • First Post: Oct 2, 2007 11:26am Oct 2, 2007 11:26am
Hi there everyone,

i am currently trading on a demo account and trade with no indicators other than candlesticks, my question is, as a beginner would i be better to concentrate on one or two currency pairs, and if so which ones would you guys recommend?

Thanks in advance for your help

Rob.
  • #2
  • Oct 2, 2007 11:54am Oct 2, 2007 11:54am
I started with one.. I found I had so much to take in at first, it was all I could cope with... I chose gbp/usd as my native currency is the pound.. So I had a basic idea of the british fundamentals... Good luck with your trading :-)
  • #3
  • Oct 2, 2007 2:56pm Oct 2, 2007 2:56pm
Yes it's a good idea to stick to one or two pairs. They have all own behaviours, active market hours and so on...

Regards - Xaron
  • #4
  • Oct 2, 2007 3:10pm Oct 2, 2007 3:10pm
I would submit that 1,2,or even 3 are fine.

However, I would make sure they aren't connected. This way, you can see how different pairs act.

For example, if you were doing EUR/USD and USD/CHF, they move in opposite directions about 99.99% of the time....so what would you really learn there?

I would say maybe a good, solid major pair. Maybe the EUR/USD, or the GBP/USD.

The second one I would make a totally unrelated pair along the lines of AUD/USD. Since this is a commodity currency, (i.e., gold has a lot to do with the AUD) it will give you a different "feel".

Also, for good measure, I would throw in the USD/JPY, or EUR/JPY. These would give the feel of "carry trades".

All three of these selections would have different fundamentals driving them. This would help with a broad base of knowledge, without being too overwhelming I think.

Best of luck,

Clockwork71
  • #5
  • Oct 2, 2007 4:04pm Oct 2, 2007 4:04pm
Quoting Rking1976
Hi there everyone,

i am currently trading on a demo account and trade with no indicators other than candlesticks, my question is, as a beginner would i be better to concentrate on one or two currency pairs, and if so which ones would you guys recommend?

Thanks in advance for your help

Rob.
of a breath of fresh air running through the forum. Welcome Rob, stick with what you're doing, many of us here wish we had learnt the business just as you are doing.
Don't get distracted by all the noise, learn to do well what you're doing now, and we all hope to see you around here for a long time.

Hooray, no indicators
  • #6
  • Oct 2, 2007 4:44pm Oct 2, 2007 4:44pm
Quoting clockwork71
However, I would make sure they aren't connected. This way, you can see how different pairs act.

For example, if you were doing EUR/USD and USD/CHF, they move in opposite directions about 99.99% of the time....so what would you really learn there?

I would say maybe a good, solid major pair. Maybe the EUR/USD, or the GBP/USD.

The second one I would make a totally unrelated pair along the lines of AUD/USD. Since this is a commodity currency, (i.e., gold has a lot to do with the AUD) it will give you a different "feel".

Also, for good measure, I would throw in the USD/JPY, or EUR/JPY. These would give the feel of "carry trades".
CW, I think you offer good advice but the AUDUSD currently has a weekly correlation of 96 with the EURUSD (100 being perfect correlation) and the GBPUSD has an 86 which is also highly correlated (0 being no correlation and -100 being perfect inverse correlation. You suggested highly correlated pairs which is exactly what you were trying to avoid.
  • #7
  • Oct 2, 2007 9:42pm Oct 2, 2007 9:42pm
Quoting Rking1976
Hi there everyone,

i am currently trading on a demo account and trade with no indicators other than candlesticks, my question is, as a beginner would i be better to concentrate on one or two currency pairs, and if so which ones would you guys recommend?

Thanks in advance for your help

Rob.
Personally I would reco a triangular group of pairs. Something like eur/usd, usd/jpy, and eur/jpy. You can learn a ton of stuff just trying to figure out how they relate to each other.
  • #8
  • Oct 3, 2007 5:08am Oct 3, 2007 5:08am
To add up to what's being said, make sure you trade currencies that are active during your trading time-zone. For example, if you trade the London session, GBP-crosses should be on your list.
  • #9
  • Oct 3, 2007 6:06am Oct 3, 2007 6:06am
I totally agree with Darkstar. By trading a triangular threesome like EURUSD, USDJPY and EURJPY, you not only learn about daily movements but also how each pair relates to one another.

All these will definitely come in handy as you progress and are keenly aware of how correlations can benefit or bring you down.
  • #10
  • Oct 3, 2007 7:12am Oct 3, 2007 7:12am
Quoting Rking1976
i am currently trading on a demo account and trade with no indicators other than candlesticks, my question is, as a beginner would i be better to concentrate on one or two currency pairs, and if so which ones would you guys recommend?
I also recommend you to accustom yourself to one or two currency pairs first. I chose USD/JPY and GBP/JPY because I'm a Japanese and I know many carry traders want to buy low, so I aim for rebound.

Mr.Takashi Kotegawa(29-years-old. Japanese individual daytrader. His nickname:B・N・F) who has increased his own funds from 1.6 million yen to 18 billion yen on Japanese stock market for 8 years or so, always seems to be able to keep watch on 500～800 descriptions and trades 50 descriptions at the same time (about 300 transactions per day). He can buy lowest quotation by candlestick pattern.
But, for me, current candlestick on real-time chart is elastic behavior and changes color, I used to be seized with fear during trading. Well, now I only use daily P&F charts and rainbow chart (neither technical indicators nor candlestick). Besides, I can keep watch on 16 currency pairs by hand-drawn daily P&F charts though, I can only trade a little at the same time...
Peace and Happiness through Prosperity (by Konosuke Matsushita)
  • #11
  • Oct 3, 2007 1:28pm Oct 3, 2007 1:28pm
many thanks for you help and encouragement guys! i like hearing others thoughts on how to trade as a beginner,.......those of you who don`t use indicators, do you trade on gut feeling!!!? or has watching the market for a while trained you to see trends as they begin and take an informed gamble?
also someone mentioned that certain pairs usually act oppositely to eachother (ie.. if one is going up the other is dropping.) can i get information on what pairs those are anywhere?

Thanks again......( i love this site!! )
  • #12
  • Oct 3, 2007 1:31pm Oct 3, 2007 1:31pm
Quoting Rking1976
also someone mentioned that certain pairs usually act oppositely to eachother (ie.. if one is going up the other is dropping.) can i get information on what pairs those are anywhere?

Thanks again......( i love this site!! )
You can find currency correlations at this website.
  • #13
  • Oct 3, 2007 5:10pm Oct 3, 2007 5:10pm
Quoting Rking1976
......would i be better to concentrate on one or two currency pairs, and if so which ones would you guys recommend?......
I’m not an experienced trader but I think it makes mathematical sense, especially if one is trading intraday, to choose pairs that have the largest daily range, relative to costs (spread).

Costs may seem insignificant, but they hit you with every trade, both reducing average win size and increasing average loss size.

For example, my broker (WSD) charges an 8 pip spread on both AUDCAD and GBPJPY. But the former moves, on average, around 80-100 pips per day, while the latter typically moves 200-250 pips per day. Hence - everything else being equal - the probability of catching a move large enough to overcome costs (and preferably well beyond!) with the GBPJPY is significantly greater.

Of course the larger the timeframe, the less significant costs become, relative to price movement.

Of course the greater the potential movement, the further away one would need to place the initial protective stoploss, hence (as I’ve read elsewhere) the larger account bankroll needed for any given bet size (e.g. 1 lot). But I would argue that greater potential movement increases both potential risk and reward in similar proportion, hence the overall profitability equation remains unchanged: all one needs to do is lower the bet size accordingly (and find a broker who allows micro-lots, if necessary).

I’d be interested to get opinions on this from more experienced intraday traders.

David
  • #14
  • Oct 3, 2007 5:37pm Oct 3, 2007 5:37pm
Quoting philmcgrew
CW, I think you offer good advice but the AUDUSD currently has a weekly correlation of 96 with the EURUSD (100 being perfect correlation) and the GBPUSD has an 86 which is also highly correlated (0 being no correlation and -100 being perfect inverse correlation. You suggested highly correlated pairs which is exactly what you were trying to avoid.

True, but the point of those two correlated pairs is that it's more ANTI-DOLLAR recently.

Ok, fine......NZD/USD?

Or if you want a real education, you could try something fun like ISL/USD


  • #15
  • Last Post: Oct 3, 2007 5:40pm Oct 3, 2007 5:40pm
Quoting hanover
I’m not an experienced trader but I think it makes mathematical sense, especially if one is trading intraday, to choose pairs that have the largest daily range, relative to costs (spread).

Costs may seem insignificant, but they hit you with every trade, both reducing average win size and increasing average loss size.

For example, my broker (WSD) charges an 8 pip spread on both AUDCAD and GBPJPY. But the former moves, on average, around 80-100 pips per day, while the latter typically moves 200-250 pips per day. Hence - everything else being equal - the probability of catching a move large enough to overcome costs (and preferably well beyond!) with the GBPJPY is significantly greater.

Of course the larger the timeframe, the less significant costs become, relative to price movement.

Of course the greater the potential movement, the further away one would need to place the initial protective stoploss, hence (as I’ve read elsewhere) the larger account bankroll needed for any given bet size (e.g. 1 lot). But I would argue that greater potential movement increases both potential risk and reward in similar proportion, hence the overall profitability equation remains unchanged: all one needs to do is lower the bet size accordingly (and find a broker who allows micro-lots, if necessary).

I’d be interested to get opinions on this from more experienced intraday traders.

David

David -

What you say makes sense, and yes....I would agree typically. Except GBP/JPY scares the hell out of a lot of traders, and especially new traders.

And the part about a broker offering micro-lots, it's a must. (You cannot practice true money management with only mini-lots.)

Clockwork
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