Complete Beginner - Charts

Complete Beginner - Charts

As a complete beginner starting the process of using and understanding Charts I’m hoping for a little guidance.

Don’t know why but decided to use TradingView for charts.

Worked out how to get Trend Lines, Vertical and Horizontal Lines etc.

Understand in a simplistic way the idea of Candlesticks, bullish and bearish movement, trending and support and resistance levels, breaking out of trends etc.

Hoping for a little guidance because I can’t find the answers I’m looking for on google etc.

Going to concentrate (for now) on only two currency pairs (EUR:USD & GBP:USD) but mainly GBP:USD.

Q: When trading Binary Options and using charts as a tool which Moving Average lines should I be using? 10 & 30 day pair or some other pair?

Q: Should I looking at 1m, 3m, 5m or 15m Charts or a combination of these or some other chart or set of charts?

I gather that (I may be wrong) that if I’m using a 5m chart I should looking for a 10m or a 15m expiry time on trades. Is this correct?

So on a 3m chart should I be looking for 5m or a 10m trade etc etc?

I live in the UK and I have worked that 07:00hrs GMT to 08:00hrs GMT London and Japan exchanges are open and between 12:00hrs GMT and 16:00hrs GMT exchanges are open.

Q: On average which time periods are best to concentrate on:
A: 07:00hrs to 08:00hrs (London & Japan)
B: 08:00hrs to 12:00hrs (London Only)
C: 12:00hrs to 16:00hrs (London & USA)

I understand that the first and last half hour (08:00hrs/08:30hrs & 15:30hrs/16:00hrs) can give sudden and movement in either direction quite randomly.

Q: Is this worth looking at or ignoring because its too risky not knowing which way it will go?

1 Like

hey,
I’ll try to help you with answers:

  • Binary options are types of trading. for example: buying apple stock or buying an option on apple stock. the difference is the time factor. when holding a stock you can keep it as much as you want whereas option will sometime expire.
    When looking at a chart: for example 30 minutes, by adding a 50MA , it will follow the last 50 minutes candles.

let me know if so far it is clear.

Thank you for your answer tradernovo.

If I’m following a 15 minute chart which pair of MA lines would best suite?

At the mo I’m using 10 and 30 but are these two my best option or should I be using a pair of different lines?

hey,

It is a good question, but in trading there is no one truth. It is not that someone can tell you do this or that, you need to try things and see how they react.
Now i’ll explain: let’s say you open trades with SL or TP of 300 pips, naturally you will look at a big resolution charts like daily or weekly. If you want the moving average to be sensitive to the price changes you wiil use a smaller MA like 10 or 5 to messure only the past 5 or 10 days. if you like the moving average to be less sensitive you will use bigger MA.

In the end you need to try it yourself and to start getting familiar with it.

p.s - one way of using MAs is placing 2 MAs on one chart, lets say a 10 and 20. if the faster one (10) is above the slow one, it can indicate of a long trend. and vice versa if it below it.

let me know if its clear

I’d say quit while you’re ahead. I’ve been trading for 30 years and I recently started forex trading in the last few months. I’ve never seen such a rigged game in my life. I just withdrew some money out of my account today, and I’ll be withdrawing the rest in the next while. I spent some money on what was supposed to be the best of the best software. It worked well at giving signals when some currency pairs were in a definitive trend. I practiced for a few months lost some money learning. I earned it all back and then some. As soon as I went live everything changed. Lose, lose, lose, and lose some more. I’ve had some wins however the losses have outstripped the winnings. The funny part is there is no logic to it at times. For example today the US posted some good numbers in the news this morning and the dollar drops against the YEN. This morning a few minutes before Yellen even begins to speak the US dollar drops 40 pips against the YEN. Japan posts more negative news in their numbers today and how does the YEN react? It gains even more ground on the USD. I think FX is a scam and Binary options are an even bigger scam. If you want to gamble head to the dog track the odds are probably better. Some people say don’t trade the news, however if you take a position you’re virtually subjected to a never ending barrage of news reports day in and day out. As for the “experts” there are all kinds of sites out there that have opinions on where a pair is going price targets etc and I watch these estimates by these seasoned professionals get blown out of the water on a regular basis. Some people comment well its been choppy the last few weeks, perhaps I ended up with my live account at a lousy time in the FX markets, however having said that I’ve seen things in FX like I’ve never seen before. Like a stochastic pointing straight down and falling like a rock from the 80% level while the candlesticks are shooting straight up and gaining in price like crazy. How do you make sense of that? I know they must be sloooowwww stohchastics! Perhaps I have had some bad luck, however I’m getting very suspicious. I find it ironic how the price will just move down far enough to barely touch my stop and then shoot back up ten pips or I lay in a buy stop order in case something moves the direction I’d like it to go and the price bars shoot up or down and just touch my buy stop and immediately retreat leaving me in the hole. I think the Big banks have a master plan to execute trades and the retail traders are used as rubes. Apparently the statistic is 90% of retail accounts are closed within six months of being opened . Mines been open for a month and I now plan on beating that stat by closing it much sooner. LOL :33:

Hi Tickerup,
You have posted a very serious and important comment and it is a pity that it is here and not on its own thread since the issues you raise are quite common and very relevent to all retail traders. You say you have been trading for 30 years and so I take your views very seriously and with great credibility.

Whilst it is most likely true that there are major forces in the world markets that can influence direction and gain from it, I do not believe that these forces are targetted at wiping out mini-sized retail accounts - these just get caught up in the bow waves. However, there are clearly other players in the field that can and perhaps do take advantage of small retail accounts.

But there are perhaps two normal major characteristics of the forex market that cause the kind of problems and phenomenae that you mention in your post:

Firstly, whereas stocks and commodities are basically only single products, currency exchange involves the relationship between two separate products which are both reacting independently to market input. Therefore a reaction by one currency to a certain input maybe override the reaction by the other currency to the same or coincident inputs. This can result in the actual currency exchange rate moving totally contrarily to what one might anticipate.

Secondly, the forex market is huge and it is relatively unregulated regarding who can operate in it and how far it can move. It is therefore extremely reactive to sudden bursts of short-term activity as often witnessed following major releases such as the US NFP. But this freedom of movement is aggravated by the modern trend towards automated robot trading that simply clicks in whenever the market movement triggers a signal. This means moves can become self-fulfilling in short term bursts. Whenever the market moves it initiates and sucks in huge participation from both automated systems and technical followers without much actual consideration of the fundamental logic behind it. It is driven by pure profit-seeking, but often fails quickly as serious players take the opportunity for benefit from good levels.

Another factor that affects many forex traders is that technical analysis has become so widespread, simple and mechanical that it produces very precise, widely recognised, points such as support/resistance levels, fibs, recent high/lows, etc where vast numbers of stop levels/ entry triggers will be concentrated. This is easily targetted by broker market-makers whenever the current price approaches these levels. This is a quote from a large broker that is commonly used by new traders:

“Our spreads are dynamic, and are set automatically by our algorithms based on current market conditions: during more volatile or less liquid conditions, spreads tend to be wider than during normal trading.”

Spreads do clearly widen under specific market conditions (except maybe ECN types) and the trader cannot know what kinds of conditions these algorithms are set to recognise. I do not know if it happens, but it is easy to cynically imagine that “dynamic” spread widening could be something like: “whenever the market is within 5 pips on a recent high/low widen spread by 8 pips and trawl in the stops”.

But, apart from perhaps some unruly dealings by some unprofessional broker practices, I do not believe that anyone is out to deliberately smash the retail trader. There is no long term benefit from that nor are the sums involved so great. I believe the reason why so many retail accounts fail is simply because they are either incompetent or experienced as traders. If you have never driven a car, you do not read a book and then enter an international rally competition - a crash would be inevitable - and some newbies do not even want to “read the book” first before putting their small monies into the market.

The only qualification a broker requires is basically your identity and your assets. There are no competency qualifications required whatsoever before plunging into this huge volatile market. Broker marketing tactics and the general reputation of forex trading create the millionaire dream and the hope of financial freedom that draws in huge numbers of expectant and optimistic new players who have no conception at all of the risks involved or even how to (or more significantly, when not to) trade. They may make a few gains that boost their confidence but that only serves to increase the blow of depression when it eventually goes wrong. Winning is not the aim of the game - it is [I]consistent overall[/I] winning that is required to remain in the profession. The big players and brokers do not need to rip off the small retail traders because they are perfectly capable of failing all by themselves because of basic ineptitude, inexperience, consistency and lack of funds to sustain flexibility and buoyancy through the inevitable occasional rough seas and own mistakes that we all make from time to time.

It may be that the forex market is not for you, but I think it is due more to its peculiar and unique characteristics rather than underlying coordinated conspiracies to rip off small retail traders.

So that’s the terminology "dynamic’ spread widening. Interestingly enough I had no positions in place over last long weekend . I was forewarned by an experienced FX trader to take my cards off the table for Easter. Out of curiosity I turned my system on and watched it on Good Friday. At times on some currency pairs I saw the buy sell spread widen to as much as over an inch wide. I used my measuring tool and found one was 32 pips wide!

Out of curiosity would that be considered trawling, or would drift netting be a more accurate term? I had two positions on Tuesday that ironically got the stops hit again one by 3 pips the other by 5. I have ceased trading for now. I’ve withdrawn a portion of my account and have decided to stop FX trading for now. I will watch the charts for awhile and may enter a trade in the future if conditions indicate it to be worthwhile, or I may just shut it down and chalk it up as an experience.

Hi Tickerup,

I am very intrigued by your case and you have greatly caught my interest in your situation!!!

After 30 years of trading (I guess stock markets?) you clearly have a deep and varied experience of markets in general stretching back perhaps even as far as Black Monday in October 1987 - wow, that must have been a great time to start trading! :slight_smile:

With that experience behind you, it is very sad to think that the forex markets have not worked for you yet and that you are giving it up after only a few months. You have, as yet, not given any details about your trading style and it is therefore impossible to offer any concrete suggestions how to improve. But, if you are interested, then I am sure people here can and will try to help you. Trouble is, apart from lack of detail, we are on someone else’s thread here which is inconsiderate to the thread owner and also the title of the thread is unlikely to draw attention to your issues here.

I would certainly like to work with you to help sort out some of these initial problems that you have encountered and I am sure others, much better than I, will also help.

So, if you wish to take this further, rather than retiring from FX, can I suggest you start a new thread and set out your trading story with FX trading. Provide us with info on your trading profile, i.e.:

  • fundamental or technical based
  • day trading or long-term positioning
  • trading strategy (how you decide entry/exit decisions, target levels and stop-loss levels, etc)
  • trading for income or capital accumulation
  • trade and money management strategies
  • type of platform and broker pricing (market-maker or ECN etc)

Look forward to hearing more from you! :slight_smile:

Do you use MetaTrader? If yes, you can just practice on it.

Worked out how to get Trend Lines, Vertical and Horizontal Lines etc.

Understand in a simplistic way the idea of Candlesticks, bullish and bearish movement, trending and support and resistance levels, breaking out of trends etc.

Hoping for a little guidance because I can’t find the answers I’m looking for on google etc.

Alright, you can start with BabyPips and the site called The Forex Guy.

Going to concentrate (for now) on only two currency pairs (EUR:USD & GBP:USD) but mainly GBP:USD.

Q: When trading Binary Options and using charts as a tool which Moving Average lines should I be using? 10 & 30 day pair or some other pair?

Well I don’t really trade binary options, or any option at all. It’s too risky for my a$$. Got the warning signal from this useful article: Warning Regarding Binary Options

I use 20 and 10 EMAs on the Daily chart. But EMAs or any type of indicator isn’t God in forex trading. I analyze the market structure first before even thinking if MAs are even a factor in the trade I’ll make.

Q: Should I looking at 1m, 3m, 5m or 15m Charts or a combination of these or some other chart or set of charts?

I gather that (I may be wrong) that if I’m using a 5m chart I should looking for a 10m or a 15m expiry time on trades. Is this correct?

So on a 3m chart should I be looking for 5m or a 10m trade etc etc?

Are you scalping? Scalping is pretty risky and stressful, mentally and physically. I use D1 and H4 time frames in my trades. I don’t go timeframe-hopping.

Sometimes, I use W1 only to determine market structure that isn’t visible in D1 or H4.

I live in the UK and I have worked that 07:00hrs GMT to 08:00hrs GMT London and Japan exchanges are open and between 12:00hrs GMT and 16:00hrs GMT exchanges are open.

Q: On average which time periods are best to concentrate on:
A: 07:00hrs to 08:00hrs (London & Japan)
B: 08:00hrs to 12:00hrs (London Only)
C: 12:00hrs to 16:00hrs (London & USA)

I understand that the first and last half hour (08:00hrs/08:30hrs & 15:30hrs/16:00hrs) can give sudden and movement in either direction quite randomly.

Well, I’ve been studying London Open and New York Close charts. NY Close works the best for me. I’m still studying London Open charts.

As far as experience is considered, London Open can generate good price breakouts from consolidations.

Q: Is this worth looking at or ignoring because its too risky not knowing which way it will go?

It depends. MAs can act as dynamic levels in trending markets. They can also act as warning markers for ranging markets.

Here’s something I think you might find useful. It’s an article that helped me trade with no useless clutter on my charts. You can try reading it when you have free time. Trading Without Indicators