Quick into and question

Hi all Aileen here;

New to Forex (always wanted to learn) and so when opportunity arose I took it!

I’ve just currently just started the School of Pipsology (2 days ago) 15% into Elementary so I thought I might utilise and leverage the knowledge of all you fantastic traders here in the forum.

My plan is to go through the whole of the education side first before I actually download the demo account and “get practical experience”.

I’m still getting confused with buy/sell (simple I know- but please, novice here so amuse me)

I’m looking to focus on the AUD/USD or the EUR/USD (still trying to decide- so happy to hear your thoughts on the pairs)

My question is this (using AUD as the base):

If I see the AUS dollar (economy is getting stronger) and i believe that I will earn profits doing so- does that mean I should BUY the AUD/USD ? Or conversely if I feel the USD is stronger does that mean I should SELL the AUD/USD.

Apologies in advance for my ignorance!

Aileen

Welcome to babypips :slight_smile:

Your instincts are correct. The rules are:

buy currency pair if you think LEFT SIDE currency in pair will rise AGAINST right side currency in pair

sell currency pair if you think LEFT SIDE currency in pair will fall AGAINST right side currency in pair

pairs tend to exist just once e.g AUD/USD but no USD/AUD but some can be found on certain platforms in certain countries both ways. This gives rise to two other rules for when your primarily looking at the right hand side - although it’s not intuitive at all to trade looking at the right side (e.g. selling USD/JPY when you think the yen will rise - irritatingly the number in this pair also falls as the yen is rising - dollar buying less yen):

buy currency pair if you think RIGHT SIDE currency in pair will fall AGAINST left side currency in pair

sell currency pair if you think RIGHT SIDE currency in pair will rise AGAINST left side currency in pair

This old post of mine may help help also:

http://forums.babypips.com/newbie-island/41961-how-do-you-sell-currency-you-do-not-hold-buy-another-2.html#post300180

best of luck

I think EUR/USD is probably the way to go on the 1st pair to start trading, its the most liquid and the majority of people here on this forum trade it. I trade AUD/USD as well, its a fine pair. If you are Australian or know a lot more about Australian economy than you do about European economy it may be better, but spreads are likely to be larger .

If you are bullish the AUD compared to the USD then you want to buy the AUD/USD pair. If you are bullish the USD compared to the AUD then you want to sell the AUD/USD pair. I hope that clears it up. feel free to ask questions here on the forum, it what we are here for :stuck_out_tongue:

agreed with stated above except using EUR/USD as your first pair to trade. I dont disagree with that statement but you must consider other factors when getting your feet wet. Like what time frames are you looking to trade (this might change as you build skill), What hours you are available to trade consistently. There are times EUR/USD may not be the best pair to trade. Along with what type of trader you are. Meaning if you are a trend trader there are better pairs to trade than EUR/USD right now depending on the time frame you trade. Yes EUR/USD is the most liquid most of the time but that dont mean it is right for you to trade. Just because the pair is the most liquid does not mean much besides alot of traders trade it. If alot of traders trade it then alot of traders loose money trading it nothing more. There are pairs that respect levels really well. EUR/USD is hit or miss (others will disagree I am sure). Sometime it will respect levels really well other times it will do whatever the person with the most money wants it to do (well it will always do what the highest bidder wants it to do). My point is go through the school and learn it. Go back and learn it again whatever. Learn what moves the market or markets you wish to trade. Babypips will teach you the basics on what makes markets tick but there is alot between the lines there. The only advice at this point is keep up with what you are doing. Learn it and learn it well then demo it and you will learn it better once you see what lies between the lines. Read the threads here. There are alot of great threads and some not so great. Honestly the ones that are not so great I can learn more than the great threads because it tends to hit a wider range of concepts as the poster builds his knowledge of the markets. In each thread here there are things you already know things you can learn and things you wish you never knew. Take it all piece by piece and build you tools for your tool box. Markets are always changing. You must adapt or die trying. Just like a fisher fishing in the little creek by his house. He cant take that little fishing pole out into the deep sea. Its just not the right tool for the job. Same concept here. You must have the right tool for the job. Especially if you trade the cable or fiber (if you dont know those terms yet its ok leave them alone till you do). Also learn one thing at a time. This way when you see certain market conditions you know what tool to use but its more important to know how to use that tool before you use it so you dont get hurt.

Welcome to babypips and since you took the time to read this I will talk to babypips to get you a free lifetime membership lol. This way I can bug the crap out of you for the rest of your life. Hows that for a warm welcome

@ modernmystery: nice and easy thanks for your clarification!

@MeiHua I am an aussie girl and I do feel more comfortable with starting on AUD/USD, but yep I understand where you’re at with EUR/USD that’s why it’s on my “focus list” ! Thanks for the clarification also, much appreciated!

@bobmaninc Great info, I actually have been avoiding introducing myself in the forums because everyone has a lot of q’s with a million thread replies on them. I wanted to stay as objectively as I can without being subjective to other peoples threads! Good advice on building my own tools and what I’m comfortable with (instead of trying everything at once and being overwhelmed!) There’s definitely a lot to learn (I’m taking a break and am at Grade 3, Elementary atm) So YOU’D better watch what you wish for in regards to bugging me- it might mean I might bug you for the rest of your life instead to pick your brain!!

But alas, I have another q (I feel they will come up every time I finish reading a section) if I can ask it most humbly. ([U]I’m also going to keep asking qs on this thread as it’s my own and I feel comfortable here if that’s ok[/U])

I finished reading the section on combining Fibs with support and resistance.

I want to ask about the last graph example ( USD/CHF ) that FXMEN have on it.

I understand that resistance turned support at 1.0510 and then we see an upward trend. So let’s say I set an order at that 50% Fib level and it was successful: does that mean I’m buying USD/CHF and I gain profit?

Upward trend : buy
Downward trend: sell

Is that roughly right? Or am I confusing it?

[QUOTE=Aileen;315758]So YOU’D better watch what you wish for in regards to bugging me- it might mean I might bug you for the rest of your life instead to pick your brain!!
QUOTE]

That wont take long there is not much to pick at.

In reguards to you fib question. You are correct you would want to place a buy order there. I will try not to nitpick to much but 50% retracment is not a fib level. I see it in the school so much. It is a very important level to watch and thats why it is on every fib tool out there but its not really a fib.

Upward trend : buy
Downward trend: sell

You got the concept down correctly here. I will not try to confuse you right now but I look to do the oppisate of that. But then my mind is a little on the warped side. Really the market is rarely in a trend of a period of time. So by the time the trend forms you alrady missed it. So I look to sell an uptrend and catch the reversal. But Lets get there on a later date. There is more for you to learn for now. Have a great day.

Thanks for the confirmation bobmaninc.

Yep got what you mean re 50% retactment as not being Fib (after reading about it more)

I somewhat understand what you mean when you say when the market goes up down and you see the trend you’ve somewhat missed it. Currently on SMA and EMA so it makes a bit of sense)

q: How do I know when to place a stop order? This is the one that confuses me in todays’ readings. I suppose I must keep a look out and put a stop loss somewhere?

Gahh. I feel like i’m asking stupid questions! =S

There are no stupid questions, Aileen … and this forum has been established to deal with everything related to forex, on every level.

As you’re into Fibs at the moment: a good place for a stop-loss is close to the next higher or lower (depending on whether you are opening a long or a short position) Fib level; alternatively you can just plot ‘normal’ support and resistance areas and place your S/L there; a third option is using your trend line or channel (only in a trending market, obviously) to determine stop-losses.

The same system can be applied to identify targets, i.e. T/P points.

Many people determine their S/L by the maximum amount they are willing to risk in a trade … this is [B]not[/B] advisable though.
You should determine your stop-loss point as described above (Fibs etc), and [B]only then[/B] decide on a position size that will accomodate your S/L; the BabyPips Position Size Calculator will help you do that.

Have fun working your way through the school and ask the forum any questions you may have.

Cheers,
O.

Thanks so much Oliver1968, that absolutely cleared my concern about stop orders. I almost laughed out of excitement because I actually knew what you were talking about! (The School of pipsology works!) Ps. thanks for making me feel like i’m [U]not a num nut [/U]asking my questions!

Here is my latest question:

When people say “I’m buying , then i’m selling” that action isn’t “closing” right? If they are still active with that pair does that mean the order is still open? So then, “closing” just actually means bailing out completely from that pair and taking your profits/ looking at your losses?

Have I got that correct?

I’m about to start Grade 5 (Common chart indicators) now so i’ll be back. Once again, I’ll post them here on my thread as I want to be as objective as I can.

Thanks for all the replies so far, it really has been helpful!

No, that action isn’t closing.
You can go long (buy) one pair and go short (sell) another, or even the same one (hedging), without touching the trade you’ve opened first.

[U]Closing[/U]: If you have, for instance, bought EURUSD and then close that position, you do that by selling the same amount of EURUSD, and vice versa, i.e. you close a long position by selling (it again) and a short position by buying (it again).

Once you’ve closed a position in this way, you have then realized your profit or taken your loss.

Cheers,
O.

Edit/P.S.: Reading my post again I don’t find it very clear, lol. I hope you get what I meant.

Ok- after reading (re-reading) and then re-re-reading all over again, i’ve finally (hopefully) understood the terminology “close” in Forex terms.

So let me try and explain again:

I [U]purchase[/U] (eg) $100, 000 AUD/USD successfully. I go long and [U]I want to close [/U]the active trade and so I [U]sell it[/U] for the amount that I purchased it for (eg) $100, 000 AUD/USD.

So basically what i’m trying to do is to [U]bring the net pair back down to zero[/U]. Therefore I will be able to see either my profit from the trade or my losses.

In my mind I pictured the word “close” as in taking the money out of the market completely and putting it in your bank account.I suppose this is correct, because when you get back down to zero you either see if you made or lost money…

Have I got that correct!!?

Yeah, you got it.
I don’t like the way you phrased ‘[I]I sell for the amount that I purchased it for[/I]’, because it implies that you sell at the same price you’ve originally bought (thus not making or losing anything, apart from spread), but I think it’s just an akward way of putting it, just like I did in my last post, hehe.

Basically, you close a position by doing the opposite you’ve done to open it: you close a ‘Buy trade’ by re-selling the pair, and you close a ‘Sell trade’ by re-buying it.

Have fun learning about indicators. :smiley:

Cheers,
O.

ok cool- yep, it is hard to explain!! (but I’m glad i’ve got the concept.) Thanks for sticking by me and helping me out!

So essentially I want to buy a pair and sell above my buy price, or sell a pair and buy below my sell price right? That means I take the profits in between correct?

I’m slowly getting through the school - currently up to Chart patterns- triangles atm =)

Alieen,
Welcome aboard the school of pipsology has a good overview of the market. I have bought several courses on trading and can say bar none the cheapest “FREE” is right here under What every New and Aspirining Forex Trader Wants to know. It is a compilation of videos and insite from a professional trader. ICT Just look under newbie Island for the link it is posted on often so it is kept at the top. .Also, Chris Lori at chrislori.com has a free area and covers AUD/JPY with a course he has some videos talking about the pros of trading it. He is the only CTA giving seminars that I can find. Good Luck

Thanks for the info Caver but my general overall plan is to:

  • read the school of pipsology and ask questions if i have any clarifications that i need. As i said before I want to be as objective as i can with the facts first before i start going off on a tangent to search for other things in other sites or look at other topics in the forum (I don’t want to confuse myself- No offence to others, its’ just my learning style) =)
    *After this i’m going to open up a demo account and re-read and apply what i’ve learn,
    *then just try to trade without any of the pipsology info in front of me,
    *then actually trade live.

That’s my plan!

I’ve just reached summer school! I’ll write any questions here if I have any! Thanks for everyone that has helped thus far, it’s been invaluable.