Hi folks
I’m from the UK, I retired last year (I’m 66) and I joined babypips a few days ago with the intention of learning how to trade forex. At the moment I’m working my way through the lessons and am just up to the Fibonacci ones but I’m finding them difficult to follow. Did anyone else have the same experience?
Greetings Zacc and welcome to BabyPips.com! Glad to hear you’re starting with the School because getting the fundamentals down is the best way to follow along with what’s going on with the forums. What about the Fibonacci concepts are you having trouble with?
Hi Pipcrawler and thanks for your reply.
I think that my main problem with the Fibonacci lessons is that I could do with a bit more theory and explanation. I got as far as the second lesson and then just got totally confused by what was there. I was sort of following the lesson in the section on “Uptrend” but then the stuff in the “Downtrend” section just didn’t make sense. It starts by saying that the chart is a 4 hour one and then goes on to say “As you can see, we found our Swing High at 1.4195 on [B]January 26[/B] and our Swing Low at 1.3854 a few days later on [B]February 2[/B].” I couldn’t even get any help from the x axis where the figures attached to the scale there made no sense at all to me.
The “Uptrend” section is dealing with a period of 8 weeks or so and within this time frame I can understand the concept of a ‘longterm trend’ but, referring to the “Downtrend” section where the total time frame is supposed to be 4 hours can you really talk about trending?
Perhaps I need to read a couple of good books before I resume the lessons. Have you any recommendations?
Thanks again,
Zacc
Trends happen on pretty much all time frames Zacc, and doesn’t necessarily have to be long extended move from its reversal or breakout point. It just has to be a move of higher highs or lower lows, or a pattern of lower highs and lows in a downtrend or higher highs and lows on and uptrend. On that downtrend chart in the lesson, it’s pretty clear to see that the market is pushing lower from 1.4200 to 1.3850, which is a very strong intra-week move.
On our trading blogs, we talk about trends on 4 hour charts all the time. They’re there as real-time, teaching references on how we approach the markets and managing risk, so you can read that each week to get a little better understand of trends, how they work or don’t work, depending on what’s driving the markets at the moment. Hope that helps!
Thanks for your reply Pipcrawler but I would have been interested in your comments on the first paragraph of my previous post:
[B]I think that my main problem with the Fibonacci lessons is that I could do with a bit more theory and explanation. I got as far as the second lesson and then just got totally confused by what was there. I was sort of following the lesson in the section on “Uptrend” but then the stuff in the “Downtrend” section just didn’t make sense. It starts by saying that the chart is a 4 hour one and then goes on to say “As you can see, we found our Swing High at 1.4195 on January 26 and our Swing Low at 1.3854 a few days later on February 2.” I couldn’t even get any help from the x axis where the figures attached to the scale there made no sense at all to me.[/B] In other words, if it’s a 4 hour chart why is the accompanying explanation talking about two dates which are 7 days apart?
Also, thanks for the links to the trading blogs but I would still be interested in any books you could recommend for a newbie.
Thanks again,
Zacc
There are only 6 bars in a day with a 4 hour chart, so the chart that you see in the lesson 5 trading days (minus 2 for the weekend); each mark on the x-axis is the time and day and it should read “January 25” to
"February 1"…sorry about that. Four hour charts are actually considered more long-term than short-term because it can be many days before patterns and moves develop.
In terms of charting and technical analysis, I actually believe everything in the School is all you need to understand how those tools work. Chart analysis is more of an art than science, which means more is learned from practice rather than theory.
The only books I like to recommend are ones that interview other successful traders and psychology books like the “Market Wizard” series by Schwager and “One Good Trade” by Mike Bellafiore. The charting analysis is the easy stuff. Developing a trader mindset and understanding what actually drives market behavior is the hard part. Plus those books set the proper expectation on how hard trading is, and how crucial good risk management is to the overall trading plan. If anything, I’d recommend reading those books first before learning about analysis and trading mechanics.
There are many ways to trade, but that’s my two pips on how I would start. Hope that helps 