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Thread: starting forex

  1. #21
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    Hello, I am new to forex trading and I want to learn more on this business. I heard that there is a lot of risk behind it, so that I am confused to start trading. Give me some guideline which is the best time to start trading?

  • #22
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    Hi Jenny,

    If you're totally new to forex and trading then the best thing to do first is to practice on a demo account which all brokers provide at no cost and will give you live price feeds and as close to a live trading experience as you can get.

    Ensure that you don't start up your demo account with unrealistic funds though as that's the mistake that many make. If you can only afford to open a live account with say $2,000 then don't practice your trading on demo account account which is funded with $100,000. This will give you totally unreal expectations and you will suffer because of it when you go live.

    Please consider carefully what experienced traders have to say (I used to ignore them too lol). Everyone is a rebel when they first start trading and think, what's all the fuss about? Why mess around with all these lines and charts - I can see where price is going...

    Sooner (ideally) or later you'll realise that trading isn't as simple as it first seemed. In fact, it's a lifetime journey of learning about new methods of trading, interpreting market conditions etc., but more importantly about learning about yourself. Psychology plays a big part in this game and you'll eventually find you're reading more books about trading psychology than on techincals of how to trade successfully.

    On to risk...

    You can take as much or as little risk as you like, there are no rules in this game. Provided you have enough cash to place the trades you want to then you can go ahead and roll the dice.

    However, it's common sense when you're faced with something unknown to protect yourself and you do this in the markets by using a stop loss (the maximum amount of cash you're prepared to lose on a trade which turns sour). You need to use stop losses when trading in demo as if you were trading live - demo is a dress rehearsal for live trading, not a game.

    How much should you be prepared to lose? Well, the choice is again yours entirely, you decide when to place a trade, you decide how much you're prepared to lose if the trade goes wrong and you decide how much you're going to take as profit if the trade goes according to plan. This is all part of the personal responsibility side of trading - it's no good blaming the markets, your friends/relatives/children/cat/dog etc. if a trade goes bad - you made the decision to enter the trade alone, so you need to accept the consequences - good or bad.

    Traders with large accounts will often set their stops at 1% of their account balance to ensure that even if they have a string of consecutive losses that they won't cause too much of a dent in their capital. However. if you start with a $500 account then 1% stops can be unrealistic as they may not leave enough room for the price movement to "breathe" whilst you're biting your nails waiting to see if your trade is going to soon head off in the "right" direction. 5% I would say is the absolute maximum risk you should take as new trader though ideally 2% would be much better.

    As a general rule you should try to ensure that your targets are greater than your stops (e.g. target 1.5 x stop or 2 x stop), though if you're trading a good system and have consistent accuracy with winning trades of well over 50% then 1:1 will be ok (bear in mind that if you only get 50% of your trades right that with 1:1 stop/target, you'll still be losing cash because of the spread you'll be paying the broker).

    To answer your original question, the best time to start trading live is only when you've proven to your own satisfaction that you can make money in this game. The only way to do this is to practice on your demo account and treat the money as if it were real. Keep track of your trades and performance and if you manage to trade for several weeks on demo and remain net profitable on each of those weeks, then you may be ready for live trading.

    I say "may" because as soon as real cash is on the line then people do all sorts of strange things. You have a stop loss set at 40 pips, though you're trade is going in the wrong direction and you think "I can't afford to lose $400 on one ****** trade, I know, I'll move my stop to 100 pips away and that'll be loads of room for the trade to bounce back...". The next thing you know is that the market has been as unpredictable as it often can be and now your trade is running at -900 !!! You can imagine how the rest of the story goes and most traders have experienced this in the early days. The moral of the story is that in addition to having responsibility for your own actions, you also need a lot of self-discipline in trading to be able to ruthlessly allow trades to get taken out for a loss at your pre-defined stop loss levels.

    If you don't remember anything else from what I've written, remember this one thing "stop losses are there to protect your capital". Ego has no place in trading - experienced traders are proven to be "wrong" by the markets often several times a day - ensure that your targets are bigger than your stops and you'll live to trade another day.

    Why am I talking about losses, risk, psychology etc. and not getting excited about the possible gains to be made? Well, you'll be able to answer that question for yourself in time...
    Last edited by soundfx; 08-18-2011 at 06:16 AM.

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  • #23
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    I`m not gonna say demo first.. rather open a cent account with a bucketshop broker and trade with low investment ..Don`t use any EA , especially on this market conditions... And try to learn some price action basics.. it does a lot more than any ema ore whatever indy .. and momentum...
    Demo first is a good idea as well, but to be able to train you`re greed, you will need to trade with real money , even if it`s 50 bucks on a cent account

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  • #24
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    Hi
    How much profit you earn per 100$

  • #25
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    my first account was at FXcm with a 25 usd starting capital...till today i dont know how i managed to make 246 usd before burning it down .

  • #26
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    The foremost way to make money through forex market is to ensure your trading. If you trade yourself, you will surely get guaranteed results. However, it may take a bit of time. But this strategy is quite favorable if you consistently follow it.

    As you are steeping into this field your first approach should be to watch and judge the forex market and learn from other forex affiliate doing business here. This will save you from the real traders aggressively participating in the market, but always make sure that you are well efficient in the usage of such systems.

  • #27
    Diamond Member Array baraya's Avatar
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    Quote Originally Posted by bestforexpartner View Post
    The foremost way to make money through forex market is to ensure your trading. If you trade yourself, you will surely get guaranteed results. However, it may take a bit of time. But this strategy is quite favorable if you consistently follow it.

    As you are steeping into this field your first approach should be to watch and judge the forex market and learn from other forex affiliate doing business here. This will save you from the real traders aggressively participating in the market, but always make sure that you are well efficient in the usage of such systems.
    I agree. But it takes time to be consistent profits in trading.

  • #28
    Diamond Member Array strawberryfx's Avatar
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    Quote Originally Posted by baraya View Post
    I agree. But it takes time to be consistent profits in trading.
    Experience is important, and could be the best teacher for better development.
    For the trading system, I am sure it all made ​​to produce good results, to make a better pips, but all returned to the discipline of traders it self.

  • #29
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    Quote Originally Posted by p29 View Post
    I am very new to forex trading. can somebody suggest a website from where i can learn all the basics.
    Thanks in advance
    Hi, Iam also a beginner in forex trading.
    first thing you should do is to join one of mini broker.
    if I may suggest, you can join FBS (www.fbs.com)
    based my own experience, FBS provide beginners need.
    demo account, market news,etc...

  • #30
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    Quote Originally Posted by strawberryfx View Post
    Experience is important, and could be the best teacher for better development.
    For the trading system, I am sure it all made ​​to produce good results, to make a better pips, but all returned to the discipline of traders it self.
    in my opinion,to be consist profitable in trading is not easy,
    of course experiences always involved.
    but success in trading will be faster to get if we know how to use tools like FBS provide:
    update Analytics and Market news,economic calender,etc...

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