Currency Trading Guide For Beginners

As a new trader, I bet most of you have a lot of question marks in your mind. As I am once a new trader myself, I totally understand the feel of loss when looking at a chart.
When I first started trading, I remember that I log into my trading platform and do not even know which time frame to go into. Even if I randomly select a time frame, I do not even know what to look for in a sea of blue and red candles.
Therefore I decided to write this post on currency trading guide for beginners to help new traders who are reading my blog to continue in their journey of forex trading.
1) Time Frame Selection – In order to know which time frame to use or look at, you have to first decide what type of trader you want to be.
If you want to be a day trader who enter and exit your position within hours, I will recommend you to use the 15 minutes and hourly chart.
If you want to be a scalper who enter and exit your position within minutes, I will recommend you to trade with the 1 and 5 minutes charts.
If you want to be a position trader who enter and exit your position for days or even weeks, you should be looking at the daily and weekly chart.
2) What To Look For – Once you have decided on the time frame to use, you will now decide what to look at on your chart. The most important thing for new traders to learn to see in their chart is support and resistance.
You should start to play around with your Fibonacci indicator and the pivot point as these are important level of support and resistance.
The reason why I say that support and resistance is important is because these are what actually causes the price to move. Once you have a good understanding of the support and resistance, you will understand why the price moves in a particular way.
3) Which Indicator To Use – After you have mastered how to look for support and resistance, you will need to decide on the indicator to use.
Personally my favourite indicators are MACD indicator and Stochastic. However different indicators are used in different strategies. So first of all, try to play around with different indicators so that you have a better feel of it.
4) What Strategy To Use – Now it is time to make an important decision, you will need to decide on the forex strategy you are going to use.
For new trader, I will suggest you to pick up a good trading course and then learn the strategy taught in the course. After learning, you should spend at least 3 months on demo account to make sure that you are able to execute the strategy with ease.
Once you are able to produce consecutive profitable months with the strategy, you are ready to rock and you can now move on to a real account.
The above are the things that you have to go through as a beginner before you are able to trade professionally. I hope that these information will be useful for you and eventually make you a profitable trader.


Source: how-to-trade-currency.com

I always appreciate this kind of posts and hope that someday i will also be able to passon knowlegde to others. thanks

me too. I'm so tired of these posts that tell 'what not to do' or 'don't show that emotion !! '

I just started trading forex a while back but I made a big switch to my way of trading (checking more on the 1 hour and 4 hour before I put in a position) and that is mainly b/c of no nonsense posts like these.

Nice post, hopefully it will help the newbies figure out how to go about trading..Really appreciate the effort

Thank you for your appreciation..

No prbs, it's just that your post made me think back to my newbie days, when I could not even get the basic info on Forex trading online and most of the info, at least the non-vague ones tend to be "pay to read" sort.
Often, as a newbie, I could not decide which time frame to go in for or for that matter, the importance of it..Yeah, lost my account in a very short time and the rest is history..
Thanks and am sure a lot of newbies will appreciate the pointers listed here, happy trading!

Don't know when you started trading, but what you said made me think: nowadays there's a ton of info out there in the web about forex, and strategies and thousands other things. Is this good or bad? Because there's so much bull*** at the same time, things get overwhelming and I get to a point that I really don't know if all this "knowledge" is really helping or disturbing...

Not that long back but the disturbing trend seems to be a case of info overload. At least, a few years back, you would not have come across that many forex related forums other than a few. But now, everyone who has a forex forum/product/ EA has access to the holy grail.
And what really irks me is the fact that most of the info overload is actually making things worse. Don't get me wrong, I still stand that the current free resources are more than enough to get any trader started on the way to making some decent money. But the prob lies in the fact that most of the "good" info is either wrapped up in vague terminology or links up to a paid service..

Foreign exchange is the work of changing one country's currency into another country's currency for a variety of reasons, generally for tourism or business. Due to the fact that business is global there is a need to execute with most other countries in their own particular currency.

Good post, thanks for the info.

Great post! I have been on a demo account for just under a year now and have probably experienced the same hardships that all newbies do. There is just so much information out there on different strategies that it becomes overwhelming. Every time I try to get into a new "fancy" strategy, I end up losing. But using the K.I.S.S. way of trading always seems to prove reliable. I also think that sometimes us newbies get a little too excited and try to enter every single trade without really looking at what that pair is doing and end up either getting lucky and gaining a pip or 2, or lose a ton of pips and get frustrated. I personally haven't played around with the Fib and Pivot but see that in my near future. I also like the 100-200 SMA just to help me with the trend.

Very good post. Specially for a newbie like me

Hello.

Thank you very much for sharing your advice with us.

I am a bloody beginner. Currently I spend a lot of time on a demo account, and I do a lot of reading as well as watching a huge variety of videos made available obline which show me (and other new fx-traders) the ropes.

Having read throgh your advice, this word caught my curiosity: "scalper".

Would you (or anyone) mind and give me an idea what
a) a scalper is,
b) attitude is most commonly observed on scalpers, and
c) how "successfull" scalpers are with their trades?

Thank you very much.
Best wishes!
Curtis

Thanks for the info. Very useful read.. Currently a noob and trying to sort through what is useful for learning and what isn't. For now i'm not even trying a play account.. I want to understand the basics completely first.

Hi,

As somebody who is quite new to Forex trading, 'Im interested in learning more about currency correlations and how different currency pairs effect eachother. Can somebody provide any info on this or recommend any sites that tackle this issue.

Any help is much appreciated.

Thanks,
C