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Main guidelines for beginners

  • #1
  • First Post: Edited Feb 1, 2017 6:12am Jan 31, 2017 9:23am | Edited Feb 1, 2017 6:12am
Hello

I want to start this thread to help the newbies in trading.

Regardless of the market or instrument please post your main personal rules in trading so the new traders won't make the same mistakes and learn in a safe environment. Here is what I think is important and please add more.

- best time to trade
- how to make your strategy
- what to avoid
- what indicators to use at the start
- what brokers to trust
- investments

Hope it will catch on
  • #2
  • Jan 31, 2017 9:26pm Jan 31, 2017 9:26pm
Quoting RasmusFX
- best time to trade - how to make your strategy - what to avoid - what indicators to use at the start - what brokers to trust - investments Hope it will catch on
Best time to trade? From experience, best time to open a position is when volatility is low.
How to make your strategy? Study the charts. Use different indicators and see if you can find a statistical edge that you can use.
What to avoid? Buying someone else's Expert advisor or trading system without first knowing the fundamentals of trading.
Indicators I use? Bollinger bands, ATR, RSI
Brokers to trust? I trade with pepperstone.
  • #3
  • Feb 1, 2017 1:34am Feb 1, 2017 1:34am
Quoting jimsnz
{quote} Best time to trade? From experience, best time to open a position is when volatility is low. How to make your strategy? Study the charts. Use different indicators and see if you can find a statistical edge that you can use. What to avoid? Buying someone else's Expert advisor or trading system without first knowing the fundamentals of trading. Indicators I use? Bollinger bands, ATR, RSI Brokers to trust? I trade with pepperstone.

Thanks Jim!
  • #4
  • Feb 1, 2017 6:00am Feb 1, 2017 6:00am
Guideline for beginners:
Practice before you dive in. Trade during the news hours. Strategize according to the fiscal conditions of the economy. Avoid losses. Use MACD & RSI indicators for start. Choose broker wisely. Invest small in initial days of trading. Increase your investment with time.
  • #5
  • Feb 1, 2017 6:53am Feb 1, 2017 6:53am
Quoting jameshallow
Guideline for beginners: Practice before you dive in. Trade during the news hours. Strategize according to the fiscal conditions of the economy. Avoid losses. Use MACD & RSI indicators for start. Choose broker wisely. Invest small in initial days of trading. Increase your investment with time.
I couldn’t agree more. Also, do not take unnecessary risks. Don’t fight the market, the market is always right. Learn to cut your losses.
  • #6
  • Feb 1, 2017 8:57am Feb 1, 2017 8:57am
I agree with you all so far but there is one more issue... most of the new traders fall for fake promises from a voice behind a phone call. I think you get the point, account managers who they depend on - so to speak - cause they don't know left from right yet. Even I went for it and it stung like hell. What would be better in this case? how do you know if your backup is good or not?
  • #7
  • Feb 1, 2017 8:58am Feb 1, 2017 8:58am
The saying that practice makes perfect is true. practice and experiment with different indicators and strategies until you find the one that suites your personality and providing you with an edge.. in this game you need an edge and that doesn't come easily, its demands experience which can be gained through hard work and determination not to quit .Always keep your risk within the limits of you tolerance. Learn to accept loses when you are wrong and remain in a winning trades when you are right until you system or strategy tells you otherwise (this a golden rule of cutting the losses short and letting the profit run). And finally, remember trading is not always about being right, but about making more good decisions than poor decisions
  • #8
  • Feb 1, 2017 11:33am Feb 1, 2017 11:33am
You can gain a profitable edge in the market through proper planning. By taking time during the weekend to analyse the market, create trading scenarios, plan your strategies and trade accordingly you would sooner than later become consistently profitable. Trade safe and prosper.

KP
Do your homework, follow the footprints of smart money
  • #9
  • Feb 1, 2017 1:11pm Feb 1, 2017 1:11pm
Quoting mlawson71
{quote} I couldnt agree more. Also, do not take unnecessary risks. Dont fight the market, the market is always right. Learn to cut your losses.
Invest according to your risk profile and especially don't invest that much which you can't afford to loose. A good trader is the one who can foresee the risks associated with his investments and knows well how to manage these associated risks.
  • #10
  • Edited 5:30pm Feb 1, 2017 5:11pm | Edited 5:30pm
Quoting RasmusFX
Hello I want to start this thread to help the newbies in trading. Regardless of the market or instrument please post your main personal rules in trading so the new traders won't make the same mistakes and learn in a safe environment. Here is what I think is important and please add more. - best time to trade - how to make your strategy - what to avoid - what indicators to use at the start - what brokers to trust - investments Hope it will catch on
Hi RasmusFX,
Thank you again for your private invitation to take part to this thread. Let me say that this is a huge issue so I can only contribute with some synthetic indications, otherwise I should write a book.

First rule first in this business: there is nor space nor future for newbies.

The competition here is not progressive like the one you may expect in other fields like sport. There you may start competing at lower levels, then, step after step, competition after competition, you may have access to tougher environments.
Let's say you want to play tennis: first you may ask your neighbour for some private lessons, then if you learned the basics you may take part to some local competition. Afterwards, if you feel fine and if you are good enough you could continue at a higher level, regional competition, national ones, then Roland Garros, Wimbledon etc.

In market it doesn't work like that: in market you start immediately with the Grand Slam. Your competitors are immediately the best in the world and you have to win them immediately if you want to survive.

1st consequence of the first rule: you got to be a professional to work in this business and a very good one. You need to invest a substantial amount of time (years) and efforts before to compete and after you have started competing. It is not an easy path nor a fast run: it's a lifelong involvement. If you are not ready to invest such efforts and energy stay away from this business.

2nd consequence of the first rule: you got to know how markets work. You need the basics of trading, the real basics of trading, and in order to have them you need a good mentor. A professional, skilled, acknowledged mentor. There are very few of them and even less willing to help you. Fortunately some of them wrote articles, books and made registered webinars: those instruments may help you in the absence of a direct relationship.

About the other specific arguments like indicators, times to trade, strategies and so on: they are all part of a whole. You cannot take them separately: time to trade is a part of the strategy, what to avoid is a part of the strategy etc. So, the best contribution I may give you here is to report what I did in order to become a professional (a person who lives of the profits he makes in this work and that spend almost his entire life in this business). So here it is,briefly, my personal experience.

I was lucky enough to understand quite immediately that volume and time are important factors in a market, from this very basic assumption I started my personal research untill I found a very precious resource in the manual of market profile ™ edited by the CBOT, Chicago Board of Trade.
Since then I continued to search any possible material regarding this topic untill I eventually found Mr. Jim Dalton former "member of the Chicago Board of Trade as well as a member of the Chicago Board Options Exchange, and Senior Executive Vice President of the CBOE during its formative years." He retired last year, unfortunately.
I became one of his clients, I took part to his intensive courses and I read and heard whatever he wrote and told about his work. I also studied a lot of other stuff of other masters like Steidlmayer, Alexander, etc.

Now, I'm not saying that this has to be the only way to become a professional: you may find other sources maybe equally valid as this one. The important thing is to understand that a market has its rules and you got to know them if you want to work into it. Without a consistent preparation it is impossible to become a professional trader: so, forget the dream to learn trading reading some stuff here and there from ambiguous and unidentified sources. And, above all, forget the wild dream to quikly become a proficient trader using some indicator or some simple easy tuned "method" or "style" or "rule" or whatever.
The only quick achievement in this case will be your sure ruin.

Thanks for your attention and for the time spent reading my opinions. Best, L.
Ubi maior minor cessat
  • #11
  • Feb 2, 2017 1:14am Feb 2, 2017 1:14am
Quoting Lock
{quote} Hi RasmusFX, Thank you again for your private invitation to take part to this thread. Let me say that this is a huge issue so I can only contribute with some synthetic indications, otherwise I should write a book. First rule first in this business: there is nor space nor future for newbies. The competition here is not progressive like the one you may expect in other fields like sport. There you may start competing at lower levels, then, step after step, competition after competition, you may have access to tougher environments. Let's say...

Thanks a lot Lock,

I agree with you and also your post gave me new ideas about trading. I hope the others will have a good start because of your briefing.
  • #12
  • Feb 2, 2017 1:30am Feb 2, 2017 1:30am
Quoting RasmusFX
{quote} Thanks a lot Lock, I agree with you and also your post gave me new ideas about trading. I hope the others will have a good start because of your briefing.
You're welcome. Best L.
Ubi maior minor cessat
  • #13
  • Feb 2, 2017 2:37am Feb 2, 2017 2:37am
Thank you RasmusFX for you invitation,


Trading the markets is a very risky business, and the most important factor in trading success/failure is Risk Management.
Risk can be managed by proper position sizing and leverage.

Here are few quotes from the big guys on the subject :

Never test the depth of the river with both feet. Warren Buffett

The hardest thing to judge is what level of risk is safe. George Soros

Risk no more than you can afford to lose, and also risk enough so that win is meaningful. Ed Seykota.

I have two basic rules about winning in trading,

  1. If you don't bet, you can't win.
  2. If you loose all your chips, you can't bet. Larry Hite


In investing, what is comfortable is rarely profitable. Robert Arnott


There is no doubt that trading with leverage is a major attraction of the Forex Market.
Although the ability to earn significant profits by using leverage is substantial, leverage can also work against you.
Simply put, leverage can amplify your gains as well as your losses.


Safe Trading,

Khalil Abokwaik

No guts, no glory
  • #14
  • Feb 2, 2017 3:47am Feb 2, 2017 3:47am
Quoting abokwaik
Thank you RasmusFX for you invitation, Trading the markets is a very risky business, and the most important factor in trading success/failure is Risk Management. Risk can be managed by proper position sizing and leverage. Here are few quotes from the big guys on the subject : Never test the depth of the river with both feet. Warren Buffett The hardest thing to judge is what level of risk is safe. George Soros Risk no more than you can afford to lose, and also risk enough so that win...

Thanks Khalil,

From what I understand, Cysec - I am trading with a broker regulated by them - has new regulations about leverage that it implemented recently. It states that no broker will be allowed to give high leverage to it's clients. It will allow certain levels according to the level of know how of the trader. The lower the knowledge, the lower the spread.
  • #15
  • Feb 6, 2017 4:01am Feb 6, 2017 4:01am
Further to the advice is this post it is important to realise that FX trading is not a get-rich-quick opportunity.

The leverage offered by any broker should be considered a marketing ploy. Security of trade execution is much more important than a huge margin.

The size of any position you take is a function of the amount of cash in your dealing account, the amount of leverage you are offered is merely an indication of the amount that a broker will charge you to have a position open. For newbies 1:1 is a good starting leverage, which means trade micro-lots against an account containing $1000. Better yet just trade demo until you don't have to fool yourself that you can make money; and develop a thick skin to deal with the broker-reps that will start phoning you to put money into 'a real account'.

If you start winning and don't understand why, it is just luck. If you don't believe that then your account will be blown in a couple of weeks ... or at the next SNB announcement.

There is no magic system, so don't be tempted to pay for one. The more time you spend trying to find a system the longer it will be before you start learning to trade. The only thing worth paying for is education.
Carbon-Dioxide: the gas of life! https://youtu.be/ttJBdr6eBuo
  • #16
  • Feb 6, 2017 4:06am Feb 6, 2017 4:06am
Quoting Lock
....
I wish I could give more than one for this post.

The amount of time that is required to become proficient, and the amount of time required to stay that way, is hardly ever mentioned.

These days my time is taken by managing my stock portfolio. It is my income source. As a result I currently have zero activity in the FX market.
Carbon-Dioxide: the gas of life! https://youtu.be/ttJBdr6eBuo
  • #17
  • Feb 8, 2017 5:16pm Feb 8, 2017 5:16pm
Read this

http://www.forexfactory.com/showthread.php?t=3156

then this post by Stephen Thom

http://www.forexfactory.com/showthre...77#post9093777
A good trader follows his rules, but great trader knows when to break them
  • #18
  • Feb 10, 2017 4:08am Feb 10, 2017 4:08am
Quoting ill_be_back
Read this http://www.forexfactory.com/showthread.php?t=3156 then this post by Stephen Thom http://www.forexfactory.com/showthre...77#post9093777

Thanks,

it was a good read.
  • #19
  • Feb 10, 2017 10:51am Feb 10, 2017 10:51am
Does anyone have some guidelines for setting good trading rules? i dont mean specific rules you follow, but just a general guideline on what to include
Should it just a be a simple if X, Y and Z are met then enter? Or do you want to make them a little more complex?


any advice would be appreciated!
  • #20
  • Feb 12, 2017 2:14am Feb 12, 2017 2:14am
Quoting effecs
Does anyone have some guidelines for setting good trading rules? i dont mean specific rules you follow, but just a general guideline on what to include Should it just a be a simple if X, Y and Z are met then enter? Or do you want to make them a little more complex? any advice would be appreciated!

Hi,

I personally don't trade when the events in the calendar are mixed - 3 results at the same hour - if they are not all on green or red - then I scalp.
When you think you see a good buy/sell order check the calendar before (so your trade won't go against you).

Get used to use only a small number of indicators - in time you will know them best (I use stochastic, bollinger and rsi).

Also try to trade only a handful of instruments - better to know a lot about 3-5 max than a little bit about 15. Here you can try to focus on the ones that are correlated (cad moves with the wti, commodities move against the usd, indices move according to the stocks they represent and so on)

See what fits you best - scalping, day trading, long term trades and so on. Each have advantages and disadvantages so try them on a demo first, for example in the last 20 years on a yearly basis no asset management or hedge fund beat the profit of indices.

Cheers.
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