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New to Forex: Need Advice

  • #1
  • First Post: Mar 16, 2007 6:39am Mar 16, 2007 6:39am
Hello fellow traders,

I have been trading forex for about 5 months now. I started off with 1000 and wiped out my account within a month. Than I thought to myself maybe its not that easy. So I got a few books ie, Trading in the Zone and Technical Analysis of the Futures Markets (1/3 finished) and read them. They seemed to help alot specially Trading in the Zone. The second time I opened another account with $300 capital and I was able to consistently put together winning trades and push my capital upto 5000. Unfortunately, I had a few short positions on the euro/usd and the recent hike in euro nearly wiped me out again. So basically what I am asking of experienced traders is to give me some advice on where I can get more knowledge with regards to money management and systems and etc. I continually read all the forum posts, however, I do not understand majority of the terms such as MACD, EMA, FIBO and etc. I understand these are systems, but how does a novice trader like me go about getting the basic information about building and analyzing systems? I am dedicated to becoming a consistent successful trader and thought I had achieved it through putting together over a couple winning trades a day (mini lots). I had no particular system, I basically trade using the news and in between resistance and support levels. If anyone can think of any books which will set the foundation for me please let me know. I appreciate any type of response and hopefully one day I will be making contributions to these forums to help benefit other forex traders!!!
fall down seven times, get up eight!
  • #2
  • Mar 16, 2007 11:09am Mar 16, 2007 11:09am
Adelb...

I got too close of blowing up an account already. No, it's not the easy "buy lower, sell higher".

I don't know about you, but demo simply doesn't work for me. Just to get used to the system, not to simulate trades.

Best practice is doing it. Getting a million in the first year? Forget it. Give youself a year just to learn. That's what I'm doing.

To do so, without jerking demos, I opened a mini account that allows me trading microlots. The key for me is being able to trade multiple lots / multiple pairs, that cannot be done with a $1,000 mini with 10K lots, for money management reasons.

I'm still learning, making mistakes, but overall, my profits are finally bigger than my losses.

Do not underestimate the power of money to your psyche and emotions. Even loosing as low as $0.50 in a trade you get really, really mad.

For practice purposes, all that matters to me is profit/loss as % of the capital. So it doesn't matter if my acccount is $250 or $25,000. When getting consistently profitable for MONTHS I'd consider depositing more funds for serious cash.

On techs, read about them and practice. Some smart, intelligent people populate this forum sharing their knowledge. Use it!

And never, never forget about economic fundamentals. Not only the news, but try to catch the overall sentiment of the market by subscribing newsletters and checking the behavior of all major pairs at a given time.

Needing anything, do not hesitate to PM me.

Have a nice weekend!

  • #3
  • Mar 16, 2007 12:00pm Mar 16, 2007 12:00pm
Bravo, cesarnc.

I agree, experience is a number one teacher in trading (actually in everything you do). This cesarnc guy here is a good fundamentalist, and he likes to make fundamental 'speech' and also help people in this forum lol.
I'm very technical, so I don't like to speak alot.
Just remember, use whatever method/system that is suited for you to maximise and stabilize your profits. Method isn't important, making pips IS important.

PS I'm still a newbie in forex too. Many good traders here in FF are willing to help. Use this chance!
Tra-X
  • #4
  • Mar 16, 2007 12:18pm Mar 16, 2007 12:18pm
Here is what I can advice you, whatever it is worth (I'm roughly at Cesarnc's stage, becoming profitable after a year's work).
1) Listen to what Cesarnc told you, I subscribe to every word. Especially the micro account thing. Trading minis with $300 will erase you account with 100% certainty. Search for "micro" at FF, you'll understand, why.
2) There are lots of materials on technical analysis available here and on the Net in general. Get acquainted at least with those terms that are seen most often (like Support/Resistence, Moving Averages, Fibonacci, MACD, etc.). You will not necesserily use them, but good to know.
3) Read the James16 thread at the Trading systems section here, you can learn a lot.
4) Google money management or search for it here at FF. This is the most important part.
5) Browse through several more popular trading system threads in the Trading systems forum here (like Sidus, bagovino, Vegas, Fozzy). Pick one that you understand and have a warm gut feeling towards. Read through all the posts, make sure you understand, how it works and why.
6) Go to historical charts, start, say, in September 2006, and "paper trade" the system till today - look, where would you open a position, what SL would you use, what TP, how big would a position be, would you win or lose. try not to cheat yourself, but simply mechanically implement what the system tells you. Document every trade in an Excel spreadsheet, and see, how are you doing in the bottom line.
7) If the bottom line is positive - start placing 0.01 (micro) orders and do it for one-two months. If your account grows - make the trades slightly larger, until completely confident. Then start implementing what you've learnt regarding money management (MM) when you decide about the position size.
8) DON'T PLACE A SINGLE TRADE THAT YOU CANNOT SAY EXACTLY, HOW MUCH DO YOU RISK AND WHY, HOW MUCH DO YOU WANT TO GAIN AND WHY, AND WHAT ARE THE PROBABILITIES OF LOSING AND OF GAINING.
9) Keep smiling.
10) I know from my own (past and present) experience that these advices are much easier to give than to implement, but it's worth trying.

GOOD LUCK!!
sans peur et sans reproche
  • #5
  • Mar 16, 2007 2:15pm Mar 16, 2007 2:15pm
First off I'd like to thank everyone for being so helpful. Unfortunately, nowadays its hard to find people that actually want to help others. Hopefully one day I can return the favor for all of you. I have taken all of your advice into account and have been reading pretty much anything that comes my way in the forums. I'm starting to learn quite a bit. However, on the technical side of trading I still require more help. Is there a book I can get to read up on all the terminology and etc.? I understand the basic resistance and support and etc...but when fibo, ema, and trading systems come into play...im pretty much clueless...I love the feedback and if it's not asking much KEEP THEM COMING! Not only will I benefit from it...newbies such as me can read this thread and have most their questions answered as well...I want to see this thread hit 200 pages lol!!!

THANKS AGAIN EVERYONE!!
fall down seven times, get up eight!
  • #6
  • Mar 16, 2007 3:18pm Mar 16, 2007 3:18pm
Never trade a position size that will "make" your account, or "make" your day. Why, because if it can make it, then it can break it too. If your wins are controlled, then your losses will also be controlled. You should trade small & earn the right to trade larger lots. But scale up SLOWLY, or emotions will kill you. It is one thing to be consistently profitable on a few bucks that you feel are no big deal, but quite another to stick to that same profitable plan when you suddenly jump your position size by 4 times or 10 times. It will kill your objectivity & you are likely to throw your profitable plan out the window, then end up losing. I think this philosophy is covered in Trading In The Zone - by the way, I loved that book too. I also recommend Emotion Free Trading, by Larry Levin. He is a Futures trader, but the same applies & he too subscribes to many of Mark Douglas's philosophies. He also recommends Psycho Cybernetics. This is not a trading book, but a book about how your mind works & how to work your mind. Be open to changing your mind to new ways of thinking. If you did not need to change your mind then you would already be in Market Wizards. By the way, another book I recommend.
  • #7
  • Mar 16, 2007 3:27pm Mar 16, 2007 3:27pm
Quoting Grasshopper
Never trade a position size that will "make" your account, or "make" your day. Why, because if it can make it, then it can break it too. If your wins are controlled, then your losses will also be controlled. You should trade small & earn the right to trade larger lots. But scale up SLOWLY, or emotions will kill you. It is one thing to be consistently profitable on a few bucks that you feel are no big deal, but quite another to stick to that same profitable plan when you suddenly jump your position size by 4 times or 10 times. It will kill your objectivity & you are likely to throw your profitable plan out the window, then end up losing. I think this philosophy is covered in Trading In The Zone - by the way, I loved that book too. I also recommend Emotion Free Trading, by Larry Levin. He is a Futures trader, but the same applies & he too subscribes to many of Mark Douglas's philosophies. He also recommends Psycho Cybernetics. This is not a trading book, but a book about how your mind works & how to work your mind. Be open to changing your mind to new ways of thinking. If you did not need to change your mind then you would already be in Market Wizards. By the way, another book I recommend.
Thank you so much for your input...pretty much everything you said I have ended up doing...I began with a 700 dollar account with no understanding of forex which led to my downfall...however, i rebounded by reading and building on my knowledge which than led to over 5g's in profit and then i put aside my trading philosophy as you mentioned which again led to another downfall...im not worried though...I just see this as a learning experience and will hopefully come back with vengeance lol...any other books you can recommend with regards to technical analysis? I am currently reading "Technical Analysis of the Futures Markets" by John J. Murphy...so far it has covered some trends and trend reversals and etc...but nothing on the terms I see in the forums on a daily basis such as ema, macd, fibo, waves...and so on....once again thanks for the input and look forward to hearing from you shortly!
fall down seven times, get up eight!
  • #8
  • Mar 16, 2007 4:14pm Mar 16, 2007 4:14pm
Quoting Traex
Bravo, cesarnc.

I agree, experience is a number one teacher in trading (actually in everything you do). This cesarnc guy here is a good fundamentalist, and he likes to make fundamental 'speech' and also help people in this forum lol.
I'm very technical, so I don't like to speak alot.
Just remember, use whatever method/system that is suited for you to maximise and stabilize your profits. Method isn't important, making pips IS important.

PS I'm still a newbie in forex too. Many good traders here in FF are willing to help. Use this chance!
I just love helping people in this forum for one reason: 80% of what I've learned came from guys sharing knowledge making $ 0,00 from it here. No scam.

And also because posting my view and opinion forces people to do likewise. 60-70% of the time, those damn smart fellows convince me I'm wrong. And acknowledging your view is wrong BEFORE placing a trade is just PRICELESS!
  • #9
  • Mar 16, 2007 4:52pm Mar 16, 2007 4:52pm
Be patient in your learning and be patient in your trading, except when it is time to get out of a trade, do it.

In other words #1 rule let winners run, cut losers short. Don't believe the ones who say "you can never go broke taking a profit" or the flip side, "it always comes back".

5-10 pips here and there and then a 50 pip loss. Pretty soon another account bites the dust.
  • #10
  • Mar 16, 2007 4:55pm Mar 16, 2007 4:55pm
Hello Adelb1985...

First, I don't consider myself an expert, but I am a full-time trader who has benefited immensely from my association here at FF, so I do have a few suggestions and observations:

Most of what you need to learn is here at Forex Factor. The challenge is being able to spend the time reading and absorbing all the things you need to know to get started correctly. (Consider joinig the James16 PF). Besides that, some of the things you want to learn can be found with the help of "Google". The terms you mention can be found with this search engine, pointing you to websites that define and explain the things you need to know. After that, it's basicly a matter of "trial and error" on a small scale. Using a demo account is fine, but it does not really teach you how to trade with real money. Using a broker that allows trading with "micro" lots is key. I studied Forex full-time for six months before I went live with real money (micro lots). Then another six months of study and practice before becoming a full-time trader. That was a lot of time devoted to the Forex. But that's what I needed for a proper start. Each person is different (something you should have learned from reading "Trading in the Zone"). There simply is NO substitute for education and practice. And finally when you decide on a startegy for trading that is both comfortable and profitable for you; stick with it like your life depended upon it (maybe your financial life will!). I have seen TOO many people here at FF and other places who jump around from one trading method to another in search of the proverbial "holy grail"; something that will be quick, easy and profitable. There are many "technical" ways to make a decent living in the Forex. The big challenge to this lies between your ears. Get a grip on it and you will succeed. All the best.................



Quoting Adelb1985
Hello fellow traders,

I have been trading forex for about 5 months now. I started off with 1000 and wiped out my account within a month. Than I thought to myself maybe its not that easy. So I got a few books ie, Trading in the Zone and Technical Analysis of the Futures Markets (1/3 finished) and read them. They seemed to help alot specially Trading in the Zone. The second time I opened another account with $300 capital and I was able to consistently put together winning trades and push my capital upto 5000. Unfortunately, I had a few short positions on the euro/usd and the recent hike in euro nearly wiped me out again. So basically what I am asking of experienced traders is to give me some advice on where I can get more knowledge with regards to money management and systems and etc. I continually read all the forum posts, however, I do not understand majority of the terms such as MACD, EMA, FIBO and etc. I understand these are systems, but how does a novice trader like me go about getting the basic information about building and analyzing systems? I am dedicated to becoming a consistent successful trader and thought I had achieved it through putting together over a couple winning trades a day (mini lots). I had no particular system, I basically trade using the news and in between resistance and support levels. If anyone can think of any books which will set the foundation for me please let me know. I appreciate any type of response and hopefully one day I will be making contributions to these forums to help benefit other forex traders!!!
  • #11
  • Mar 16, 2007 5:02pm Mar 16, 2007 5:02pm
Quoting SunTrader
"it always comes back".
I still fall for that one. DAMN!

-50 pips later I look back and go "what was I thinking?"

  • #12
  • Mar 18, 2007 7:57am Mar 18, 2007 7:57am
hi Adelb1985
I agree.. there are great posts on here from a lot of helpfull people,but its hard to understand them until you are familiar with the terms used.
A book I would recommend to anyone interested in Technical Analysis is Martin Pring's Introduction to Technical Analysis.
I found this a great help especially the CD included with it. The CD is basically the book text being delivered by Pring with the charts in the book on screen.I thought this was a much easier way of learning than just reading a book.
The book covers most of the areas of basic TA including moving averages and momentum.
Another book I would recommend is Come into my Trading Room by Dr. Alexander Elder.This has good sections on money management.
The greatest enemy of a good plan is the dream of a perfect plan.
  • #13
  • Mar 18, 2007 10:07am Mar 18, 2007 10:07am
Thank you Steve, I just purchased both books off of amazon and look forward to reading them! Thanks again...keep the advice coming people!!!
fall down seven times, get up eight!
  • #14
  • Mar 19, 2007 6:17am Mar 19, 2007 6:17am
Hi Adelbi - I´m fairly new to forex too, but I have traded futures for more than 15 years. I then spent a year following fores before trading love.

I would suggest that you try to keep your charts as simple as possible - dont become an indicator junkie - one´s sufficient once you learn to interperate it.

I find that price action on candlestick charts with one or two EMAs accross several time frames is a godd way to "see the action".....although we all "see" charts differently and you need to find what suits you best.

Also, I would start with one of the less volatile pairs - USD/CHF or EUR/USD before trying the volatility of Cable or GBP/JPY. IMO you need a much larger account and some experience before trading either of the last two.

Good luck.

Jono
Trading Levels with WRBs
  • #15
  • Mar 19, 2007 6:22am Mar 19, 2007 6:22am
Quoting Islander
Hi Adelbi - I´m fairly new to forex too, but I have traded futures for more than 15 years. I then spent a year following fores before trading love.

I would suggest that you try to keep your charts as simple as possible - dont become an indicator junkie - one´s sufficient once you learn to interperate it.

I find that price action on candlestick charts with one or two EMAs accross several time frames is a godd way to "see the action".....although we all "see" charts differently and you need to find what suits you best.

Also, I would start with one of the less volatile pairs - USD/CHF or EUR/USD before trying the volatility of Cable or GBP/JPY. IMO you need a much larger account and some experience before trading either of the last two.

Good luck.

Jono

Sorry...I hit Submit instead of Preview....lol....should read.....

"following forex before trading live"
Trading Levels with WRBs
  • #16
  • Mar 19, 2007 6:46am Mar 19, 2007 6:46am
I would also suggest that every day you look at the Daily Calendar on this site and check for the upcoming News Releases....if you have a Red one that might effect the pair that you´re trading, I would consider exiting or reducing any open positions before the news release. A 50+ pip spike immediatly on news release is not uncommon.
Trading Levels with WRBs
  • #17
  • Mar 19, 2007 7:26am Mar 19, 2007 7:26am
Quoting Islander
Sorry...I hit Submit instead of Preview....lol....should read.....

"following forex before trading live"
THANKS LOVE=)...KEEP THE ADVICE COMING!!
fall down seven times, get up eight!
  • #18
  • Mar 19, 2007 10:47am Mar 19, 2007 10:47am
Quoting Islander
Sorry...I hit Submit instead of Preview....lol....should read.....

"following forex before trading live"
There should be a "Edit" button on lower right by "Quote"
  • #19
  • Mar 19, 2007 3:02pm Mar 19, 2007 3:02pm
Quoting Adelb1985
First off I'd like to thank everyone for being so helpful. Unfortunately, nowadays its hard to find people that actually want to help others. Hopefully one day I can return the favor for all of you. I have taken all of your advice into account and have been reading pretty much anything that comes my way in the forums. I'm starting to learn quite a bit. However, on the technical side of trading I still require more help. Is there a book I can get to read up on all the terminology and etc.? I understand the basic resistance and support and etc...but when fibo, ema, and trading systems come into play...im pretty much clueless...I love the feedback and if it's not asking much KEEP THEM COMING! Not only will I benefit from it...newbies such as me can read this thread and have most their questions answered as well...I want to see this thread hit 200 pages lol!!!

THANKS AGAIN EVERYONE!!
here are two pdf books on forex. I have a couple more to. So be sure to pm for the rest. These books along with info I picked up from various places has made me a successful trader. I want to see you get there to. But you have to find what works for you and stick to it.
Attached File(s)
File Type: pdf Candlestick Intro.pdf   642 KB | 894 downloads
File Type: pdf Currency Trader - Daytrading The Forex Market.pdf   597 KB | 598 downloads
A. Finesse Williams Making Millions One Pip At A Time!
  • #20
  • Mar 19, 2007 7:36pm Mar 19, 2007 7:36pm
Quoting Adelb1985
Thank you Steve, I just purchased both books off of amazon and look forward to reading them! Thanks again...keep the advice coming people!!!

Glad to help

When you get the books put Elders Trading Room to one side and concentrate on Pring.Watch the CD 2 or 3 times to understand the principles then Trading Room will be easy to read.
Don't bother about the graph's being about stocks,bond's and commodities as well as currencies.Just concentrate on the Technical Analysis principles.
Recently I got a 2nd hand copy of a Forex course that was selling for £2k when new.That was just basic T A Support Resistance Trend lines Flags Fibonacci.
It was put together well,had very good reviews and mentoring from the author but had no special techniques in it.
The greatest enemy of a good plan is the dream of a perfect plan.
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