What should you be doing?

If you come to the Rookie section to learn, that would not be the best, but I'm going to post here regularly with some ideas for you.

Starting today. Think about news. What happens today? Well, today is special. Here:



There's too much here to just tell you, but if you want to make it in forex trading you should have some idea of the answers to these questions:

How often is the FOMC economic projection?
How did previous issues affect USD?
Could the Usd/Cad weekly trend continue?
Could the Usd/Jpy weekly trend continue?
Could the Nzd/Usd weekly trend continue?

And so on. Today is not a good day for trading because we are waiting for the news in about 12 hours time. Use this time wisely, because tomorrow will probably be a good day for trading.

Hmm, nice thread idea.

Hope rookies will find it helpful.

Thanks Nik.

Friday. Friday is not generally regarded as a good day for trading because large traders will square off their positions which can lead to unexpected moves, often precipitating counter trend moves. You can help the effect by closing any profitable trades taken earlier in the week which are not strong positions. Probably a wise move.

At the end of the month, especially if it is a Friday, the effect is even stronger. If we study this effect by looking back through charts we can even see how this could work to our advantage, giving a better price to rejoin the weekly or monthly trend.

Oh yes, while I remember, today is "triple witching" Friday. Mostly affecting stock futures and options (look it up) it may have some destabilising affect on the currency markets. Why? Because commercial paper becomes cash and vice versa. This has the effect of buying or selling a currency.

Interesting thread, look forward to future reading, keep it up!!

I personally think this kind of thread will help a lot of traders be it rookies or veteran. Hope you can elaborate more so everyone can learn especially when there are tons of technical traders in this forums.

Monday morning. Happy Monday. This morning is a good time to reflect on last week's moves. Look at the chart and try to analyse what moves were made, why, and whether they will continue.

Likewise, the beginning of the week is a good time to look at your tools. "What tools?" you may ask. Well, a van driver might check the engine, a manufacturer may check the order book and stock of raw material.

As a trader, my main tool is my capital. My cash. Without that I'm just sidelined, a spectator. So I think I'll check my exposure to the market. I'm talking from the perspective of someone who has endured days, if not weeks, of drawdown - completely unacceptable and something I will no longer tolerate. I used to cut them off like a dead branch. Then I put a 10 pip stop loss and a 10 pip take profit on them and hoped for the best. Now it rarely is necessary. It still hurts, but my losses are acceptable, expected and controlled.

By the way, thanks for the encouragement, kinspk and jen101.

Now. What news today and this week?

I think you can add one more thing that rookies might find useful.

Main action on market begins from Wednesday.

Monday and Tuesday are "observation" periods, to understand main direction for the upcoming week.

Personally me, I do not recommend rookies to trade on Friday, because it's full of "unexpected/sudden moves.

stay green,

I used to hate dread and hate once again Fridays. It would constantly ruin a good week, and leave you depressed for the weekend.

Mondays are also good for optimism assuming Friday was survived lol. Nice analogy though.

Nik, you are right, although I have seen some good moves on a Monday and a Tuesday (usually after an NFP Friday or a rate change), often they are a disappointment.

palabara: Thanks for the feedback. I think I'll continue the thread a bit longer.

I have no shortage of subjects to write about. The only shortage I have is of time. Believe it or not, there is life beyond forex trading. But with all this space to fill I can feel indulgent and write about what I think I should be doing once in a while. What I have my eye on today is cable. Gbp/Usd is an exciting pair with strong, often sustained moves. The news release is at 09:30 UK time slap bang in the middle of the London action.

After last week's FOMC release most pairs formed inside bars the day after and are by now trundling off in the direction they chose, knocking out stops and gaining momentum against the dollar. Cable is still stuck in the doldrums and this is unusual and I have been watching. I have always been a sucker for double inside bars and I like this one because cable has been left at the starting post. So my trade of the day will be to get on the cable move at 09:30 UK time, with a view to hold for a few days at least. That means I won't be placing my trade at 09:31 or even 09:35, but more likely waiting for the news move to fade and waiting for a continuation.

Rookies should just watch (almost fell off my chair with mirth) and use Forex Factory's excellent Calendar feature to analyse what moves previous releases caused and how they could possibly profit from that knowledge.

Anyway. Coffee is waiting for me.

Nice thread and glad to land in here. Look forward to seeing more during your coffee break mate.

Smikester, I want to share something if you do not mind.

As I observed, almost in 90% of a time, price "fills" big shadows slowly.

Below is example of EUR/USD H1 chart.

I hope it will be helpful for newbies.

"Profit from that knowledge".

I just want to pick up on that phrase. A few years ago I spent many hours back testing and forward testing strategies using indicators. I suggest that anyone new to this subject should do the same. The distinction here is between indicators and price (price action). I don't want to blindly tell you not to use one or the other. You need to learn for yourself. But let me give an example of what can happen.



On this hourly chart we can see how the price doesn't want to break the red line. Any indicator under the sun would tell you it's OK to short into that line. Now check where that line comes from. Yes, it is a level from 10 months previous:



I dare say you could find previous price action at that level. If you do this work, you'll save yourself a lot of pain. In the next few posts I'm going to give examples of where indicators work and where they do not work.

If ever you wonder if you should be blaming your broker or if someone is chasing your stop, think again. Take a look here: http://www.babypips.com/school/presc...structure.html. A quick study of market structure will put you right. Open a few demo accounts and trade them. You will find different brokers have different characters. Most will be within half a pip of each other on price, but you will be interested to find the spread differs at news release time.

Some brokers won't allow stop orders or pending orders within 5 pips of the current price. I presume this is so they have time to lay off large orders. I won't use those brokers. Most of my trades are pending orders which are stop orders which mean the price is already going my way before my order is executed. Your method may vary from this, but it is worthy of consideration.

Very good points in this thread.

As always a pleasure to read your posts..keep them coming..

quote from the article :"This gave us the chance to play with those high up the ladder and poke them with a very long and cheap stick"

My stick is so long and so cheep it will make girls cringe

Its a good article and babypips did an awesome job in re-structuring and re-writing their learning center into a new unique place all beginners should be reading and re-reading everything in babypips.

The tools and information new traders have now supersedes all the info we had the old school traders because competition got more intensive as regulation increased. So knowledge became the tool of recruitment, and better and more transparent information now exists. While before, it was walking in the dark with pamphlets that provided some of the picture, but not all of it and only lots of experience and inner knowledge unveiled that took a lot of time and effort to acquire. So traders your lucky now, and all the knowledge is available as well as trading is more fairer now then it used to be a lot of people still think that everyone wants to mass with them, and its not true brokers want your business and most of them don't want to jeopardize it. Forex market is as not as hot potato it used to be due to a lot of negative spins and restrictions. So new people aren't as attracted to it, because they hear bad things.

The truth is everyone wants forex to be like an ATM and spit out money at them, and for whatever reason people don't go into stock market cause its "complicated" yet forex some how in comparison seems simpler, but in fact it is more complicated then stocks or bonds or futures. Forex has more moving parts and larger more complicated global mechanism where rules and regulations vary from time zone to time zone and somehow all this cluster ends up in the middle where everyone of every size is able to barter on a value of something that is derived from debt. Literally money = Debt that's how money is made so more debt = more money. So next time you buy a car or a house you've just created more money into the economy by creating debt.

<<<

Monday again. Are we rested and relaxed after the weekend? We should be, and I'll run the risk of being boring here. Surely not, smikester? Let's develop good habits - sleep, eating, exercise and emotional intelligence.

Forex trading puts some unique psychological pressures on us, calling for a self awareness and discipline which can be demanding. Beginners can be caught up in gambling fever, in itself damaging psychologically, but the cruellest blow is when we have a run of failed trades that have been properly planned and executed. What other occupation can cause us to work hard, plan and execute our plan, only to lose money?

Oh I forgot the most important good habit - have fun. Bye for now.