Another FX Rookie here

I do not know too much about FX except the basics. I basically read the Forex 101 section on forex.com (btw what do you guys think of using that site for a demo account? Or which are better for beginners?)

I have also started reading the book Forex Patterns & Probabilities (about halfway through it) learned a bit more. I also have the book Technical Analysis Of The Financial Markets. Looking here at some more of the forex jargon and seeing all kinds of different charts and indicators is somewhat intimidating, because from the little I have read so far, I didn't expect there to be so many different charts and platforms. I wanted to know what some of you think of the 2 books I have and if there are better ones, or if these are useless. I have seen a few books mentioned here and wondered if they were just good books, or can they be good for beginners as well.

Trading in the Zone
Reminiscences of a Stock Operator
High Probability Trading

I have ordered Technical Analysis For Dummies and Forex For Dummies off of eBay and I am waiting on those to arrive.

From the little I have read here so far (a lot to take in) I notice a lot of you seem to think focusing on the mental portion of trading is just as or more important than the techniques. Is that right? I have also seen a bit of differing opinions when it comes to indicators. Some seem to like them, others seem to say get rid of all that and maybe keep just the MA or EMA. I saw someone mentioned here how day trading is a lot more difficult, which I can totally believe.

When it comes to indicators, even if some of you think they are pointless, is it better for a rookie to start off and gradually wean themselves off of them, or is it better to not start sing them at all for the most part. If you had to chose which ones are the best period, or to start out with which ones.

I basically just want to hear advice from you guys on what I should do, what I should read, what I should prepare for, what order to do certain things in. What are things or pieces of advice that you feel I have to know?

I know something similar was probably asked before and I hope I'm not just repeating the same stuff you have seen a thousand times. Thanks for any replies anyway.

Reading charts, in order:

Candle (or preferred) chart, 1', demo, until see any patterns;
one trendline on same, lining the patterns you see;
several trendlines to make each of the tried-and-true chart patterns from Murphy's book;
preset multiline tools (parallel (retrace,), circular(arc,), angled(fan,));
chart breakdown into speed of price change, pivots and others for preset indicators (the more detailed a breakdown, the easier to combine the indicators);
and a set of rules (read others', test without modification) for one type of chart area.

This order lets one read a plain chart before applying the skill to each indicator.

Welcome to Forex, David.

Personally, the three books you have listed are good, although High Probability Trading is probably my least favourite of those three.

Not sure about the "Dummies" books.......

I think that, if you can, it would be great to find a mentor.

That probably would have saved me years in pain and lost $.

I have observed that the 'normal' course of events is something like this:

1. Learn about forex, get excited
2. Get a trading system, start trading it
3. Lose $
4. Find a new trading system - system 2
5. Start trading system 2
6. Lose $

(This may or may not be repeated several times)

Then........the epiphany:

7. Get excited about 'trading psychology'
8. Learn about trading psychology - "Trading in the Zone" is probably the flagship book for this crowd
9. Start to trade.......profitably!
10. Start to be concerned over whether trading for a living is a possibility, as the 'numbers may not add up.'
11. Get interested in money management/position sizing
12. Ralph Vince's books and "The Trading Game" by Jones become interesting at this stage......


So the foci of the trader are, in chronological order:

1. Trading Systems
2. Trading Psychology
3. Money Management/Position Sizing

#2 and #3 are really one and the same thing, as I see it.

But most traders find it difficult to start thinking about #2 and #3 until a trading system is "found" and the trader is absolutely committed to that trading system.

Thus, the most likely reason why so many senior traders (myself included) end up using naked (or nearly naked) charts is because they have burned through all of the indicators/systems available. Most traders need *something* to look at when placing a trade.......so, a naked chart is probably the last thing standing after you've given up on all of the indicators out there.....funny, but true.

You should find a lot of information here for you, and certainly lots of ways of making money. But the single best thing you can do to accelerate your learning is to find a method of trading and stick to it. Backtest that method (manually is probably best, unless you would prefer to trade EAs and let them make money 'while you sleep') and see that method through many many different types of markets. Only after this will you be ready for #2


Good Trading!

I'd recommend those book you mentioned above.Also, if I were you I'd cancel the book "Technical Analysis For Dummies" because you have already read the book "technical analysis of the market". Btw, if you're affordable for another book, please considering about "Trading Without Gambling: Develop a Game Plan for Ultimate Trading Success" by Marcel Link - author of the book "High probability trading".

Trading in the zone will give u a lot of info on money management, and psychology. Reminescences of a Stock Operator has taught me a lot about the actual trading itself. Granted that it also covers psychology and risk, I feel that I was able to improve my system, after reading the book. So 1 and 2 would be the books I'd recommend. In fact, book 2 can be found online for free, if you dont mind reading it on a computer. Just google "book_name download" or something along those lines. If you can't find it, pm me and I'll send you a link.

Go demo, and play around. Doesn't matter if u know a lot about fx. A demo broker doesn't really matter. Go with forex.com or mbtrading or any other u like. Mbtrading has a lot more "complex" order types, and it will help to learn them.

Whatever you do, go demo right away, and get your feet wet. Try to find patterns in movements, and learn how the market operates. Start simple, then start exploring indicators. I myself never use anything more than moving averages. I only trade patterns aka price action.

The most important thing to rememer from day 1 is MONEY MANAGEMENT and PSYCHOLOGY. If you can get this down, there will be no bounds to how good you can get at trading.

Good Luck and I hope you make it rich!

Thanks for all the reply's so far. I'm glad to hear my book choices were not too bad. Fx chartist I have that other TA book but I haven't read it read it yet. I was thinking of getting the Dummies' version thinking it may be more for beginners.

In the case of psychology I know I have to work on that plenty, because as a rookie I could be fearful of certain moves very easy or caught up in potential gains very easy. I thought I was ok at money management, but I was surprised to hear basically 2-5% of your full account on 1 trade. After I read more I understood why though. At the point I'm at I'm more about protecting my cash and minimizing losses than I am making gains.

I was kinda nervous about doing demos because of my kindergarten level at reading charts and I wanted to learn a bit more so I wasn't too intimidated. I'm def more cautious at this point. Not sure if thats good or bad.

I see again that it seems as if there isn't really any indicator fans here. If all of the more experienced traders, drop most of the indicators and work almost naked, shouldn't I start off that way as well? Or can you only be good at looking at the naked chart after you have had that experience of trading for a long time? Sounds to me like it seemed harder on a lot of you when you used many indicators, meaning I should probably just skip over that hassle and just work with a plain chart with an MA and S/R on it.

It sounds as if the PA is more along the lines of the fundamental analysis and not so much technical. Are you guys who work with mostly naked charts more fundamental?

I also saw a good post here about trying out any new strategies on a demo account for a few months first before risking actual money on it. About leverage, I read how there is great leverage in this market, but how I see it is if you use a high amount of leverage, there is potential for you to lose it all or make a lot. Seems riskier to me and unless you know what you are doing and are doing it for awhile its basically a gamble. Seems like it would appeal to rookies too. I want to avoid that, so what do you guys think about leverage? Whats the best for beginners? Higher or Lower? When is a good time to switch leverages?

Thanks again, hope you guys understand my questions ok.

BTW to the one who mentioned a mentor, that's not possible. I live in a kinda poor city, and most of the people I know are on the low side of the economics class, somewhat including myself. I am determined to make things better for me and my family though. I am prepared to lose, but I for damn sure will not take this lightly and run a lot of stupid risks. Its why, I'm concerned about protecting losses as well as making gains, and its why I know I will never put any real money into this for at least another year. I don't know anyone in Forex, hell, I don't know anyone else who even knows what Forex is. Closest I got to someone in trading is a friend of my Mothers had a boyfriend who was a stock broker, but even he, as far as I know is just into stocks, and probably wouldn't help with Forex at all.

David:
3rd Down & 15. What's the Play?
{Defence shifted} Audible...
{Blitz Immenent}
{Zone} Need Crosses
{Man to Man} Need an advantage...

Result: I need One of My Team to Perform beyond recognition before I have a chance to include them...

Oohh.. I Need a Trading "Team"... Why didn't someone tell me that before?

Hey David;

Nice post. I beleive sincere.

I am currently sitting in a Wal-Mart parking lot someplace in New Mexico. Very slow connection speed not sure this will even get threw. For some reason I looked at your post and feel compealed to respond. Might be the booze at this altitude.

Here is the deal. Take a demo account and start trading. Trade any way you want. I would suggest support and resistance. If that does not light your fire trade fibos or whatever. Just enjoy yourself. Research every win and loss to look for clues why. At some point you will be comfortable and find you have been making more pips than you have been loosing. Then it is time for a micro account . I said micro not mini. Things change when even pennies are on the line. You will understand in time. Time is maybe the most important element. Good fortune.

Thanks for the replies, although I am not sure what exactly bemac means about a team.

I opened up an account of forex.com and some it it still confuses me (like actually looking at and fully understanding their platform), but I will keep trying. Seems very difficult and even if I have to practically figure it all out on my own I will eventually do it. Just a matter of how long. I feel like even this forum has info for people more advanced for me. I am reading that babypips site, so far everything I have read so far talks a lot about general ideas and not may specifics when it actually comes to placing an actual trade. Maybe its because of all of the different platforms I don't know. I'm trying my best to find really good information, because I don't want to be taught or learn from anyone who isn't good at their craft. Its why I asked if those books were good, because I really don't know if they are good books or not. I'm kind of at a clean slate so alot of the info absorbs and sticks and I am trying not to learn bad habits, ideas, and techniques right now because I cannot tell the difference at this point. For instance using stops; I see in books about setting stops closer like 25-30 pips or whatever and here certain people swear by not setting stops and hedging or setting stops very far off. Not sure if one way is right or both are, and which should I listen to. I know with a demo account I can try both for myself and see, but I was just naming an example of conflicting ideas.

Just want to let you all know, I have been studying the babypips.com site (Great site for beginners btw).
I don't want you to think I was lost in the fray with all the others who give up or get intimidated by all of this. I will start posting again if I have any questions about something I read on babypips, or until I'm done with that site and have questions about whichever platform and how to do something.

I am not giving up. Even if it takes me months before I know enough to post here again.

Like my last post said, I wouldn't give up. Also, like my last post said it has been months since my last post too (6 to be exact). I have been busy, but I have still been studying and completed all the grades of the school from the babypips site and learned a lot. I still have to learn a bit more, but I'm almost ready to try the demo account again. I had done it once, but I didn't fully understand it so I bombed. Still things I don't quite get yet, but I'm basically there. Out of everything I learned I think the 2 biggest issues I will have to overcome is impatience and my mindset. Like dealing with losing or a losing streak. Everything comes with learning, practicing and experience, but I wont know how I deal with those two things until I start using real money. I mean I will take the demo very seriously as if it was real, but when I get to the point where I am properly capitalized and I have my hard earned cash on the line, it will be a different story.

I will update this again when I got basics and more advanced stuff down pact. That's when I will open my next demo and get to learning specifics and training my eyes to see patterns and knowing how news effects things.

Again, I won't give up. Even if its another 6 months to a year before I open up a micro with 1 grand, I will keep trying. I came too damn far to give up now lol

I'm back learning again. Got caught up in life and that mixed with my intimidation had me forget about this. Wish I could have used the time I had since my last post more wisely.

In the Forex industry, you can never learn to much. The ammounts are just astonishing. The more youll learn, the better you know how much is till left for you