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5 Must-know Concepts & Tools In Forex

  • #1
  • First Post: Apr 6, 2007 6:03pm Apr 6, 2007 6:03pm
In no particular order:

1) Money Management
2)Trendlines
3) Fibonacci Levels
4) Support & Resistance
5) EMAs (particularly 21, 55, & 200)

As a beginner, don't overlook NONE of these. The result can be painful. Believe me, I know.

Have I made big money yet? No, because I'm just coming into the light of putting it all together. I'll return to this post in one year to report my success or failure in applying them.
  • #2
  • Apr 6, 2007 6:51pm Apr 6, 2007 6:51pm
Hi there SouthernM...

There a a few more structural foundational elements left for you to discover yet but let's look at your current vision.

I was right there with you till 5). I wonder if YOU would explain to me {in layman's terms or otherwise but not cut and paste from a site} how an EMA is calculated?
Also;
Why those Periods work on the Chart Timeframe You are Using.

It may sound like criticism but it is really an attempt to get you thinking deeper into the workplace that we glean a living from, I really think there are quite a number of members here looking to be "Master Traders" without understanding how the Engine Room works. Probably ~ 95 out of 100

"I don't know why it works, all I care about is that it does work."
will leave you feeling lonesome and worried when it stops working.

"If it ain't broke, don't fix it."

What if it is? What do you do now?
  • #3
  • Apr 6, 2007 8:48pm Apr 6, 2007 8:48pm
Quoting southernmind
In no particular order:

1) Money Management
2)Trendlines
3) Fibonacci Levels
4) Support & Resistance
5) EMAs (particularly 21, 55, & 200)

As a beginner, don't overlook NONE of these. The result can be painful. Believe me, I know.

Have I made big money yet? No, because I'm just coming into the light of putting it all together. I'll return to this post in one year to report my success or failure in applying them.

I would totally agree with you ONLY if you use every tool of those in a creative way that differs from the way other traders use them...


Thanks,

Nader
  • #4
  • Apr 6, 2007 9:24pm Apr 6, 2007 9:24pm
1 through 4, agreed, because i use them, and know they work. 5 i dont use too much, not too sure how much they can help, but good thread for the newbies
  • #5
  • Apr 8, 2007 11:56am Apr 8, 2007 11:56am
I've found these EMAs to offer consistent support & resistence when paired with trend lines, fib levels, etc. Mostly on the 15min and 1hr charts.
  • #6
  • Jul 4, 2009 7:58pm Jul 4, 2009 7:58pm
1) and 4) is the only thing you need to trade the market. All the other things are just derivates
  • #7
  • Jul 5, 2009 7:00am Jul 5, 2009 7:00am
Quoting tunera
1) and 4) is the only thing you need to trade the market. All the other things are just derivates
Thats all I trade!
Money Management in limiting my losses and Take Profit expectations.
Pivots and S/R Levels helps me with direction and market depth.

All this is done with No charts and only price action with my Blackberry and it's been working like a charm.
  • #8
  • Jul 5, 2009 7:19am Jul 5, 2009 7:19am
Quoting southernmind
In no particular order:

1) Money Management
2)Trendlines
3) Fibonacci Levels
4) Support & Resistance
5) EMAs (particularly 21, 55, & 200)

As a beginner, don't overlook NONE of these. The result can be painful. Believe me, I know.

Have I made big money yet? No, because I'm just coming into the light of putting it all together. I'll return to this post in one year to report my success or failure in applying them.
i am in the same boat lets sail through it...see you after one year Inshallah
  • #9
  • Jul 5, 2009 8:32am Jul 5, 2009 8:32am
Quoting southernmind
In no particular order:

1) Money Management
2)Trendlines
3) Fibonacci Levels
4) Support & Resistance
5) EMAs (particularly 21, 55, & 200)

As a beginner, don't overlook NONE of these. The result can be painful. Believe me, I know.

Have I made big money yet? No, because I'm just coming into the light of putting it all together. I'll return to this post in one year to report my success or failure in applying them.
I wouldnt consider any of them 'must know', except for using good MM. There just excuses to make trades despite there being no real world reason to do so.

You say your coming to the light, but I bet your not. Maby someone is stood at the switch flicking it on and off.

GL, and dont beleive everything you read.

Leon
Living the adventure in my head.
  • #10
  • Jul 5, 2009 9:01am Jul 5, 2009 9:01am
Quoting southernmind

1) Money Management
You should have quit while you were ahead.
  • #11
  • Jul 5, 2009 9:23am Jul 5, 2009 9:23am
Quoting philmcgrew
You should have quit while you were ahead.
Shocked, I always thought you were one of ones who traded using that stuff. Must have got you mixed up with someone else.
Living the adventure in my head.
  • #12
  • Jul 5, 2009 9:27am Jul 5, 2009 9:27am
Quoting tunera
1) and 4) is the only thing you need to trade the market. All the other things are just derivates
Tunera you arse, you brought back a 2 year old thread.

Just realised.
Living the adventure in my head.
  • #13
  • Jul 5, 2009 1:53pm Jul 5, 2009 1:53pm
Quoting Leonlorenzo
I wouldnt consider any of them 'must know', except for using good MM. There just excuses to make trades despite there being no real world reason to do so.
Quite correct, 1 is good, the rest are voodoo.
I would also add trade management (exits, stops, B/E etc) & knowing what market condition you are actually trying to capture by placing the trade.
The breaking of a wave cannot explain the whole sea.
  • #14
  • Jul 5, 2009 3:02pm Jul 5, 2009 3:02pm
Quoting Leonlorenzo
Shocked, I always thought you were one of ones who traded using that stuff. Must have got you mixed up with someone else.
No, I don't think you have him mixed up with anyone else. But, I do think PhilMcGrew is quite aware that so long as there is a structurally sound management pattern existing in the trading approach multiple methods can be used to end up in the same place. Not that they all will, but many could. It doesn't really matter how you get from point A to point B, be it by foot, bike, car, bus, train, plane, the only thing in common is the fact that you actually move toward B, from A.

At this point in my trading experience, having worked with just about every indicator and line possible, I realized about a year and a half ago that whether I used strictly "look, its going up! What do I do!?" methodology, a trendline, a horizontal line in the sand, an MA, or even something like an MACD, I would end up roughly taking the same trades with very near the same SL and profit outlook.

Having said that, I make it easy for myself, I use a single MA, as that is what was on my chart when I realized what I did and have not strayed from the line of thought since. But, I am not blind to the fact that I could do the exact same thing with other tools. This is why threads that actually "credit" an indicator in some way I always find pathetic. Credit the trader and the underlying approach. I don't wish to speak for Phil, he could get a little edgy (it has happened before ), but I suspect the tools he uses... he uses because they make HIS management easier. How it works for him, I have no idea, I have not paid for the course? How mine works for me, that is all I can speak to.
The market is my nation. Traders, my family. Hello, brothers and sisters!
  • #15
  • Jul 5, 2009 3:41pm Jul 5, 2009 3:41pm
Quoting Leonlorenzo
Tunera you arse, you brought back a 2 year old thread.

Just realised.
Lol, trading are always the same things, the same threads repeat every-year with the same questions, the same doubts, the same belifs etc.. it's a fucking wheel, the trading wheel
  • #16
  • Jul 5, 2009 3:42pm Jul 5, 2009 3:42pm
Bored... and well, this is still a useful topic (even after 2 years). Here are my thoughts:

1. Discipline.

So many people, in an effort to never lose money, dance from "system" to "system" and never turn a profit.

I would consider that more crucial for a beginner than all 5 on that list.

Basically you just get something that kinda works and do it over and over and over again come hell and high water. Some trades work, some trades don't, it's the discipline and persistence that pays off.


2. Edge. Know when you have it, know when you don't. Don't overestimate it. Manage risk around the rest.

A lot of people want a magic entry that will take them into a magical trading land where price behaves like it knows what it's doing all the time. Well, that doesn't exist. Price doesn't know what it's doing until it's done. All you can do is find times when one thing is slightly more likely to happen than another. Those times don't last long, it can take 3 weeks of watching to get an edge that lasts maybe 12 hours (if you're lucky).

This is why trade and money management are so freaking important. Great MM can't make a bad system profitable, but bad MM can turn a great system into a loser. You need to figure out a way to get most of your risk taken care of, and some money off the table, before the market starts to ask questions. But at the same time you need to leave something on the table to ride the really long, but rare, trends. Figure that out, you'll do fine.


3. Sentiment.

Enough with the indicators. Yes, they work if used correctly. Price action does too (but can be a real loser if used incorrectly, too). None of that matters a whole hill of beans. What matters is sentiment. What do people believe the market should be doing? If it's obvious, then cool, trade that way. If it's not obvious then perhaps you should wait till it is.

Anyway, use indicators or whatever to read sentiment, but use your common sense too. Don't be a robot, the market is ran by other traders and they make human decisions. Learn the concepts of sentiment (trending behaviors, trader types, feedback/momentum, price levels, etc) and why they happen (money flow, flight to qualify, inflation concerns, etc).

The rest is just "buy on dips" and "sell on rallies."


4. Keep it simple.

Give a man a watch and he knows the time. Give a man 2 watches and he'll never know for sure. Just figure out something that works for you and use it. Trading is fast food, it's a McDonalds hamburger, it's not a gourmet steak dish.
  • #17
  • Jul 5, 2009 3:55pm Jul 5, 2009 3:55pm
Quoting Rabid
Those times don't last long, it can take 3 weeks of watching to get an edge that lasts maybe 12 hours (if you're lucky).

Hmmm, I think ill let you keep that edge, ill look for a different one.
Living the adventure in my head.
  • #18
  • Jul 5, 2009 4:36pm Jul 5, 2009 4:36pm
You guys can have all the MA's, fib-levels and support/resistance you want. Trading doesn't start with any of that.

There are some abilities I would rank as helpful; intelligence and desire (to learn). Knowing someone who trades for a living doesn't hurt either.

So many times have I heard that intelligence isn't a factor for success in trading. Non-sense. Those very few I know who makes a killing in this market, share an incredibly sharp brain.
Measure twice, cut once
  • #19
  • Jul 5, 2009 4:45pm Jul 5, 2009 4:45pm
Quoting aediaz1
You guys can have all the MA's, fib-levels and support/resistance you want. Trading doesn't start with any of that.

There are some abilities I would rank as helpful; intelligence and desire (to learn). Knowing someone who trades for a living doesn't hurt either.

So many times have I heard that intelligence isn't a factor for success in trading. Non-sense. Those very few I know who makes a killing in this market, share an incredibly sharp brain.
Who do you know who makes a killing in this market? How do you know them? And in general terms, how do they trade?

Leon
Living the adventure in my head.
  • #20
  • Jul 5, 2009 5:00pm Jul 5, 2009 5:00pm
Quoting Leonlorenzo
Who do you know who makes a killing in this market? How do you know them? And in general terms, how do they trade?

Leon
They use commonly known concepts (i.e macd, trendlines) but the usage is quite different. Nothing magical or any secret concepts.

They both have profile here on FF.
Measure twice, cut once
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