Rookie Mistakes

Hey, Everyone. I began my journey into the exciting world of Forex trading about a month ago. I am currently in the Middle School portion of pips school and learning a lot. I have a demo account set up in which I am making a lot of rookie mistakes. Most of them are due to trying to find a system that works. That being said I have been getting my but kicked. Lol. My main question I have for the experienced Forex traders, with so much information to use to develop a trading system, what indicators and methods should a rookie FOCUS on first? I find myself trying to mix everything at once and I think is giving me ambiguous signals. Thank you. I look forward to being apart of these forums.

Keep it as simple as possible, too many indicators will just confuse. Read the threads on pure price action or 3 ducks for simple trading

Thank you Eddie. I will take a look at those.

before made further step into a league of market analysis, Be Anticipated!
spare time calculating, your account leverage, margin, spread, margin call, ranging your account when it’s gonna blow actually, do some simple math upon it.
each traders are rookie at their first try, and most of them are never know why his first account blown up at those price, what cause of it. all of them surely said, it’s because their failure upon entry analysis. I once also fall to this, and not just one time event, couple times maybe more :).
simple case : 500 USD account, total 0.5 lot size on EU trade, at what price our entry will strip while using 1:500 leverage, 30%/20% margin call/stop-out level. answer is : no one really bother upon it.
common rookie case : 500 USD = how I turn this money into 2000 USD within a month!. answer is : many traders try, and most of them fail, and yet some any other do exact attempt, and end up same result, fail. :slight_smile:
hope you’ve got the point.


Download, save, and read this and this and this and this.

-Adrian

Just take it at a time and remember to keep things simple. That way, when you start live trading it will also be simpler. complicating things can make things very hard when you begin live trading because then you will tempted to succumbing to emotional trading. Personally, I never use more than three indicators to determine what position to take in a trade.

To add to all the good stuff that’s been said…Remember three things: 1. no matter how hard you work or prepared your are, you can’t win’em all. 2. cut losers quickly and maximize gains. 3. Focus on developing good trade processes, risk management and thinking in probabilities.

In the beginning it’s all about surviving and improving constantly until you’ve figured out the right way to trade for you. Trading is a marathon, not a sprint. Hope that helps…Good luck!

Today’s lesson:


Thank you everyone. All good feedback.

“Markets are never wrong - opinions often are.”

  • Jesse Livermore

You have to be at peace with yourself in order to venture through the light & dark of the market on your own. If you’re comfortable with acting independently, you will enjoy the ways of the market, for it does not stop to check whether or not you’re following its’ lead - it just moves on, all by itself. And the brief moment you are on par with what the market is doing, that is your opportunity to invest.

Does this mean that traders should avoid using trading signals from various providers? Because as far as I understand, they are very much about personal opinions from various analysts. All in all, I think that the wise trader eventually makes his/her own decisions, but signals can be useful in pointing you in the right direction for your analysis.

As long as you’re the primary factor behind your decisions, go for it.

And yet I have watched over the years the way opinions can turn markets into puppets, albeit in the short-term. I believe in the end, markets correct themselves from the levels driven by pure investor/trader sentiments.

One of the biggest Rookie mistakes today comes in the form of thinking only about profits. In trading, you have to consider both scenarios in order to be successful. Some newbie traders tend to rush for the several online systems that promise a certain level of return, while others join bogus courses in a bid to sharpening their skills.
My 2 cents, check out whether the system features anywhere in scam reports, and secondly, if there is a trial period, by all means take it and test the system. As for online courses, there are several areas where you check their reviews, including, here at babypips.com, where you can ask questions. So do not go in blindly and hope for the best. It is never that straight-forward.

Try learning to trade with no indicators first (as mentioned of one our senior member… “purely price action”), after that incorporate whatever indicators that would suit you to help you better. Indicators follow’s the candle action, not the other way around, that’s why they’re lagging… and remember there’s no perfect entry, there are always more of this loosing one than winning, that means you have to find a way to profit from loosing more than winning, here’s where your “risk management plan” enters.

good feedback.

Thanks to everyone for there continued input and advice. Today I began on my demo account only making trading decisions based on MACD which seemed to lessen my confusion. Prior I had 3-5 different indicators going and was too much. I found to make better decisions solely waiting on the MACD crossover. Later in the day I added the Parabolic SAR which helped me determine trend changes also. However I am now finding a challenge on how to properly set Stops that close my trade out to early. Any advice on Stops and/or my strategy today? Thank You everyone.

If you’re a fan of macd, I suggests you try cowabungas sytem that’s being blog here too in babypips, it’s a good way to start for newbies like us. With regards to your stops you really need to learn what risk management is all about, once you understand it you’ll know where to put your SL and TP based from your entry.

There are three theories around placing stops and profit targets.(SL and TP).

[B]First:[/B] 1:1 ratio for SL:TP. The this method is practically useful in a sideways market (instrument).

[B]Second:[/B] 1:2 ratio for SL:TP. This method works well in an upward trending market. The idea is that upward movements are likely to extend more than downward pullbacks. Therefore, putting TP at twice SL means you can break-even (excluding spreads) with two losing trades and one profitable trade.

[B]Third: [/B]2:1 ratio for SL:TP. This method is applicable in an upward trending market, especially where there are several pullbacks. It allows trades to recover from losing positions when pullbacks occur, rather than close trades early and return a loss.

My system\strategy is based solely on probabilities and I consistently make a profit each week, or at least breakeven.