I am Totally Lost

Hello Guys.....

I'm a newbie and i am in need of urgent help from experience traders......

I just started trading or should i say "so called consider myself a trader" the last 3 months.....

The first time i went live was 3 months back when i was totally not prepared and lost all my $1000 account within 3 days..... I have funded again my account with another $1000 but have not started to trade because i want to understand, learn & built my foundation first....

My problem is that i've been reading and watch online Forex 101 from various sites.....Forex Factory alone has endless discussions, tips and not forgetting advise and tutorial from experience traders.....

But each time i visit a link or forums etc.....i just get lost in them..... Meaning that there is just so much information and links connected to one another that i usually move one to other tutorial before truly understanding the previous lesson.

Can someone please tell me step by step what are the lessons that a newbie like me must learn first before moving to the next lesson?

Because I'm Totally Lost.......

I've learn about candlesticks but if you ask me on hand now what that pattern or this patten means, i will have to refer to my note. And if you was to ask me about Resistance & Support is, i will also have to refer to my notes......same with MACD , Divergence, Money Managment etc.....

What i will hope for is for some Experience traders who would not mind to make a step by step list for me in this topic so that i can follow and not diviate / get astray from learning forex.

Example:
1. Learn Pips
2. Learn Candlestick Pattern
3. Learn Money Managment
4. Learn Support & Resistance
5. Learn MA
6. Learn MACD
etc......


I am so confused now on what's my first or next step is suppose to be.

BTW, please have a look at babypips and informedtrade .....they have totally different way of teaching.....Why is that guys...? Arent they suppose to be a basic step by step learning process for Forex Trading.



Your reply to my help is appreciated. I wish you success and good health.




Cheers

My advice to you is to google the topics you want to learn and you will find articles related to these topics that will tell you quickly what you need to know.

Concentrate on learning support and resistance, trendlines, fibonacci and candlestick patterns.

Then search for 'silent service method' on this forum and read it through from the start. It is just one method to trade and it may not be for you but I didn't start making money until I got the clutter off my charts and went back to basics with the help of that thread.

Not to disagree with the above per se, but i would make money management your first subject to understand.

Well at least you learned something for your $1000!

The first thing to understand about trading is that's it's nothing more than a bet on probability. The things you mentioned such as MACD, patterns, moving averages, support, resistance etc etc might give you a slightly higher probability of predicting direction over simply tossing a coin but they're not the holy grail and they all vary in value.

Nothing will predict market direction accurately so what does that leave us with, and how can we make a profit?

It doesn't really matter what you use to trigger a trade, even something as simple as a trend line can be effective, the important thing is how much you actually risk on your bet, and what you do once in a trade.

The old trading mantra like 'cut losses short, let profits run' and 'don't bet the farm' are just as true today as they've ever been.

Forget about trading strategies for a minute, think logically and get your head around the basic principles of what trading is actually all about first. 90% lose because they spend too much time and energy focussing on trying to find something to predict direction. Even if they found it they still wouldn't be able to turn a profit. What does that tell you?

why you think forex trading should be profitable or generate more return than work?

many people were attracted to this world because of 'free money' or 'quck money' promises... or because demo trading earn a lot of 'money'.

then they lose 1st big amount of real money in no time,
then spend the rest of the life trying to win it back...

there is no solution, expectation of this game is negative sum and you need to pick your counter part cautiously....

futures are only useful for hedging an uncontrollable risk for serious businesses... there should be no expectation to 'make money' out of this.

if a person can learn how to generate 4% return a month or 50% return a year after 100 hours of learning and practice and 'risk free'
then most of big companies should not exist because they generate money much slower and subject more to economic conditions.

calculate how much money you can make by 1000 hours of learning and practice... that is 125 working days and almost half a year's full-time work.
with a realistic expectation of average 10%, max 20% ROI a year... you need 10,000$ and 1000hour in order to win that 1000$ back that you lost.
I think your time and money could be of better use by putting at your work or study... I am sure using 1000hr to work you can make more than 1000$.

if forex trading overall cannot be proven profitable and you already spend 100 days to prove it, then it's time to click stop/loss,
the mentality of not accepting loss will still lead to disaster if you play forex and be caught in a loss.


I've got to learn that it's more important picking a market where counter parts make more mistakes than ourselves...
then just watch and wait others make mistakes...

forex and futures are too efficient, highly centralized choices (50% E/U?) and well studied as well as full of funds in this market...
the chance to win here is very low, it's like trying to push against a wall, it's much better looking for easier things to put hands on.

Going live after 3 Month. lol
It has taken most sucessful traders at least 1,5-2 years to get profitable.

Yeah, that's a good point, Tjpld... It took me 8 years to become an anesthesiologist...

Take a look here if you really want to learn basics... Then read it again. And again. Then go to the charts. Watch them and try to read them. Don't fall on the "predicting" trap, just don't do it. Just try to understand what the market is trying to say, cause every single trader is watching the same "book".

Probability of failure is huge on Forex.... For those with just a couple of weeks of charting time, I'd say 100%...

Cheers!

I've began looking into forex in 2006. Went live for a while in 2007, and lost a similar amount as you, across about 80-90 trades. At that point I realized I didn't really have a winning approach, and I went back to demo. I figured why donate my money to the market while I'm still learning how to trade profitably?

I've hopefully learned a lot since then. I've gradually assembled various ideas (from DIBS, James16, BillyRayValentine's no brainer trades, Jacko, Skunny, and others) into some kind of trading methodology. Every one of my last 8 months in demo has been profitable. I only trade part time, however, primarily because I like to have a life. (HT, I don't need an anesthesiologist; watching price move torturously in the early hours of the morning usually sends me to sleep.....zzzzzzzz.......).

Only after I've had 12 consecutive profitable months in demo will I try going live again. I believe I have the core of a very profitable method, but it's early days yet, and I'm under no illusions that the markets are very fickle and uncompromising. I’m cautious by nature.

So how does my method work? I'm not willing to disclose too much – at least not yet. I've spent about 3 years sifting through gobs of material, good, bad, and ugly; and testing dozens of different systems. I've spent $$$ on education and EAs. Sorry if it seems selfish, but I've said about as much as I want to here. Anybody can work out the details if they're willing to dig deeper, and experiment for themselves; and the experience will allow them to develop their own winning approach.

Anyway, there are much more experienced traders here at FF, than me. Check out the threads I mentioned above (James16 etc). Clockwork71's Silent Service thread is likewise excellent IMHO. Igrok is a very experienced trader (and author). Beyond that, find out who's been listed most often in the Hall of Fame thread, and check out any who've posted systems in the Trading Systems area. Which systems there have had the greatest following, and have survived the test of time? Cobra's THV and Dazfx Fib systems are very widely read, no doubt with good reason. I tend to avoid anything that talks about hedging, wide or non-existent stoplosses, (unlimited) averaging down, or Martingale – all of which I regard as being too risky for my conservative personality. But each to their own.

You can make forex work for you, if you're willing to put in the necessary time and effort. Assemble enough quality information, and then prove to yourself that you have a winning approach, before you go live with it. Well, that's my 2c worth. Hopefully it gives you a starting point.

No one needs to learn all tools. Focus on three that look most simple and easy. Master them. Then start trading with very very very small positions i.e. $0.001 or $0.01 per pip. Open no more than one position at any time. Put stoploss and take profits. Do not change your mind once in a trade. But make sure you are using stoplosses. Do not lose more than $3 on one trade. Remember you trade one position at a time. Once you conclude a trade take 5 to 6 hours before entering a new trade. Your aim is not to make money. Your aim is to learn trading with minimum or no loss.

It seems like you're trying to memorize your lessons rather than learning them. When you learn to spell a word, you don't memorize the letters and their sequence. You apply what you know about the letters of the alphabet--what they sound like and the rules pertaining to vowels and consonants. And sometimes the rules will fake you out or let you down and a little bit of memorization will be needed. But mostly, we're able to spell because we know the rules of the language.

I'll use candlesticks and patterns because you mentioned them, but this applies to indicators as well:
Every part of a closed candle stick gives you a little information. It shows the open/close and the hi/lo. You need to focus on that first, rather than trying to memorize patterns. Once you really understand the information that the candle provides, then move on to simple patterns and learn why each pattern implies what it does. And remember the word "imply". A candle is nothing more than a few bits of concrete information in a neat little package. It can be named "Bullish' or "Bearish" or whatever. But the name is a mere implication. A Bullish candle implies price is going up, but there is no guarantee it will. That's where the frustration comes in.
The same goes for patterns. The pattern is made up of closed candles and the candles are true, but the pattern is only an implication--it guarantees nothing.
So you are at a point where you see a pattern, then you refer to your notes, identify the pattern and speculate by putting on a trade. And of course it goes bad. And you feel like your research was wrong, or the pattern doesn't work, or that you'll never get it.
So why learn any of it? Because we are looking for what the market is doing now. Indicators and patterns make it easier for visual people to see what is happening now and what has led up to where we are now. And when we speculate, we're only speculating on what will happen more often than not. Or in other words, probabilities.
Our edges, when we have them, will be small and it will take a large sample of trades to prove whether we have an edge or not. A method with a 55% win rate over a thousand trades can easily be a failure over a hundred trades. And even a consistent 60% win rate can lose dollars if our R:R is wrong. And when we adjust our R:R to something more favorable, our win rate goes down.
So we adjust our parameters, and demo test, and use conservative Money Management to see us through those times.

So in short, learn your lessons well, don't simply memorize material. The more aspects you learn, the easier the rest will be. And when one lesson leads you to another, it's usually supposed to. And it'll take a considerable amount of time.

Awesome post Bill, IMHO.

Also, keep in mind that demo trading is slightly skewed from live results. Not to mention the EMOTIONAL factor when there is real money on the line.

Your best bet imho is to put ONE indicator on a chart and then analyze the snot out of it. Where does it fail? Why? Where does it shine? Why?

Look at the way prices MOVE. See what patterns stochastics and moving averages make when the BIG moves happen. Look for divergences in price compared to RSI or Momentum and watch for the corresponding breakouts.

Analyze, analyze, analyze!

There are SO MANY indicators and timeframes to choose from, it behooves you to look at them all and pick the ones that feel right and make sense to you. Learn them. Love them. Figure out how to tweak them so they don't lag as much. Figure out how to tweak them to eliminate or drastically reduce whipsaws in sideways trading.

Live trade with .01 lots on the lowest pip spread currency (usually it is the EURUSD) to get your feet wet without becoming overpositioned and overexposed.

Learn to trade at marginal leverage to keep moves against you from being TOO much money for you to handle losing while you are learning.

I don't know, these are just the things I think of when I sit in front of my screen and want to figure out the "next best thing" for me.

But don't mind me, I'm just Twitch(y).

It will, but I don't think it needs to.

I've seen some of the most convoluted strategies backtested, forward tested, analyzed, and demo traded for months......only to fail miserably.

Conversely I've seen some of the most ridiculously simple strategies traded live after just a few days and they've been successful.

If you swapped traders and strategies the results would probably be totally different.


In my opinion the reason it takes so long to become consistently profitable (if at all) has more to do with the time it takes for a potential trader to grasp the very simple concept of trading itself, as opposed to the time it takes to learn about a specific strategy or market.

The threads Hanover referred to are a classic example. I haven't actually read the strategies in detail but let's assume they 'work', so why are only a very small percentage of people who have adopted those working strategies actually making any money? The strategies could be clearly defined with little left to interpretation or discretion yet only a handful of the hundreds of followers will be successful, why is that?

I guess the question to ask any successful and consistently profitable trader is what was your Eureka moment. I'll bet for a large percentage it will have had nothing to do with discovering a strategy or indicator.

The book 'Trading in the Zone' by Mark Douglas, although not specific to forex and slightly repetitive, I think gets the message across excellently and it's well worth reading for anyone trying to make it as a trader. Of course only a small percentage of potential traders will bother to read it because it doesn't have any trading strategies in it.......

[quote=pipmutt;2828289]It will, but I don't think it needs to.

I agree with simplicity (and your statement). My point is that the few lessons that need to be learned, need to be thoroughly learned rather than memorized.
It takes a while to separate the wheat from the chaff, but once we do, the wheat is much easier to see. Then we can unlearn some of the crap we become stuck on.

A good example comes from one of Xaron's recent posts, citing that support and resistance are zones, not lines. If you mention S and R to most new traders, an image of a line will appear in their mind. However, much money is lost by placing stops a few pips below a "support line" thinking that if price penetrates the line, support has been defeated. As Xaron aptly pointed out, a truer understanding of S and R, rather than a memorized definition, would see better results.

I'm assuming a self taught situation, as the OP implies he is on that road.
Certainly a good mentor matched with a compatible student can reduce the the learning curve considerably.

In short, if left to our own device, the tendency is to learn more than we need but not as well as we need to.

Yeah, fellows, some very nice piece of advice around here... I imagine if the OP is still around to grab it or has moved to another Trading System Thread...

IMO a trader (especially if he intends to be a full-time, which I'm not...) MUST learn the basics. Then, MUST spend hours and hours in front of the charts, not trying to back/live/forward test any system.... just watching the market dynamics... maybe a couple of indicators (to get use to them, to the lagging, to NOT use them as a reason to enter, but it's a must know....)

..... when he imagine that is tired, start all over again.... Trading is really simple, but very hard... and very "boring".... the waiting process... the slow moving hours... all these faces must be at least "familiar" to a rookie trader (no offense intended at all...)

Then, he must give a try to some "systems" (I prefer approaches")... Like J16's, Clockwork's, DIBS.... demo, demo, demo. Than go to live trading when he is used to a system and mastering it (with the little twaks all of us do to the originals.... we create our own variation and try to make the system enter our comfort zone).

Well, it's a long way...

Cheers!

PS: hanover.... I'm thinkin about using your sleep technique to my patients....

So is everyone else. The difference is that you admit it

Indeed, bill...

BTW, the thread starter's last activity was the first post of the thread...

Cheers!

Don't take it bad mohamedrizal, EVERY trader has been lost many times before beginning to see the light, you are not alone.

To become good at the trading game you should make experience, and loose some (many?) money during the path, unluckly there is no google or systems or special guide that let you learn how to trade profitably, it's only experience, if you really enjoy trading continue to trade and don't worry about mistakes or losses, with time you will start to understand what happen in the market and how to make profits on a regular basis, and at the end money will not be a problem anymore in your life.

Trading is a bastard job, it attract many people with the unconscious premise of fast money, and when you trade you understand that every penny you will ever put out of the market in future, you have worked hard for it.
After all, in truth trading is a job like any else, you must work hard to earn money, but the difference from other jobs is that when you finish your learning (or just learn how to be profitable) you will trade and make money, whenever and wherever you want.

Maybe it's time for you to take a pause, and come back after some months, enjoy your life, trading is all about mental stability, you must be totally relaxed and absolutely mentally stable to don't become crazy with the up and down of the everyday market.. or it's just a suicide


P.S.
Stop visiting forums and looking for guides or systems, just open a chart and make your OWN studies, everybody have his own inner way of perceive the market and trade, looking at what other say is just a waste of time, when you have your strategy, then come back and read about other ppl strategies, compare them, take something from others to let your become better, etc.. but you must create your own strategy, or (again) it's a suicide.
Mainly because nobody have a profitable strategy, because it's not the strategy that's profitable, but the trader who trade it.

So looking for a strategy of somebody (maybe a profitable trader) and trading it, will continue to give you losses, trading is much more then use a strategy.

To become a successful trader, have a strong mathematically background. That is all you need. Forget about TA, FA, EA or price action whatever... It wont help you.

Forex is an efficient market. That means, you cannot predict the price.

Create your own mathematically models.
Reduce your risk close to zero as possible and maximize your profit to 1.
It is not about you make money with your analysis, it is more created by "luck".

If you don't have any quantitative backgrounds, you will fail. Like 99% of the FF members here.

So that was my own experience..

Practice 4 until you can distinguish how much a setup is worth, and apply 3 to this.