I have a few hundred pounds that I put a side to try this thing.
I can say with certainty that I do not know anything about Forex trading. And after reading about it online I think I understand even less.
I would love to hear any tips you have about how to start small and try this thing…
Do I need to start with a broker? to open a demo account?
In what should I trade? Forex? Which currencies are the most safe to trade in ?
There is to much info out there, can someone give me the short and simple version on how to start?
I don’t want to just flush my money down the toilet…
Start with a Demo account.Read as much as you can and watch videos.Don’t pay for anything<grin>
Download the free Metatrader4
It will be overwhelming at first but stick with it and there’s tens of thousands of people using it and there’s loads of free tuition and help on-line.
Once installed you can open a demo account from within it.I’m using a couple.Try Admiral’s AM-UK-2 or a US one of there’s.See MT4’s help files on how to do this.
If you are serious about forex it can take months or even years to become good and not lose money but as you can train free at home it may well be worth the long-haul.
If you think it’s easy money or simple then I’m afraid it’s not for you.I’ve spent six months using demo accounts and am still not 100% happy I can trade well but am getting closer.
Here’s my take on it.The forex market will be around for a while I think<grin>so I doesn’t matter how long it takes me to get good on demo accounts and even if and when I do I also know,from a little Binary Option trading with real money,that using my own money is almost totally different from,“Demo” money.You will need to learn discipline and good money management to avoid losses that can have a very bad psychological affect because there will be losing trades.
We have a saying in my normal trade,“It’s not how you Mess up,it’s good you are at UN-Messing up”.I’ve cleaned the phrase up
Recap:
Read,watch videos and learn as much as you can and practice,practice,practice.There’s always another day to trade if you don’t clean out your account so sometimes the best trades are the ones you won’t or don’t take
90 % of traders loose everything during the first 6 months. Until you do not figure out why, be extra cautious. your first goal should be to stay as the one that does not loose everything, then may be you ll have a chance to actually make money later on.
Most traders (futures, options, forex, etc.) lose exactly the sum of the fees they incur in trading. What this means is that their system is a break even system. Randomly entering and exiting would be a break even system. If indeed a trader’s system either loses more than costs or less than costs, the system has potential. If it loses more than costs then it is the reverse of a profitable system. If it loses less than costs then it will profit to the extent that costs can be reduced sufficiently. How do you reduce costs in trading? One way is to trade less often with longer holding periods. How does that work? A 2.5 pip spread is a 25% cost on a 10 pip winner, a 2.5% cost on a 100 pip winner and a .025% cost on a 1000 pip winner. Thus, the longer term big pip gaining trades have the benefit of lower percentage costs. This is why day trading is so much harder (and why I can’t do it, at least one big reason anyway). Long story short: trade longer term. Look for a system that trades for moves that take weeks to months or perhaps even years to play out and win hundreds or thousands of pips.
Some will say: “Oh but the rollover will kill you.” Well, if that is the case (and figuring out whether or not it will is a bit more complicated) then simply don’t take trades with negative rollover. Take only those with positive rollover. There are plenty of pairs to trade and there will be plenty of signals from many different systems to take trades with positive rollover. This said, if you trade multiple pairs, you may find that even when you take trades with negative rollover your total rollover costs can be very low or perhaps even a net gain. So it is something to watch (looking at YOU USD/CNH).
So, you need a system with not only a positive expectancy, but one which can be implemented in a manner whereby it can overcome costs and produce a profit. Additionally, and very importantly, the system you produce must also be one you can handle both technically and psychologically. If you can’t actually implement it because it requires you to put in hours you don’t have or to take risks your stomach cannot handle, then it is as worthless to you as a random system that loses costs. The development and implementation of your system is the task at hand and it takes a lot of time and effort.
Trading forex is not always easy at first. You need to have it in mind that loss is part of forex and there are challenges and the forex market though very liquid is very much unpredictable. You have to look for a good broker and start practicing on a demo account to boost your knowledge then later you can open a live account to understand proper trading where you have learn how to control your emotion in order to succeed.
Hi Nick, if you are totally green, I would suggest going through various tutorial and trading courses available free online. It is better to understand the terminologies and the basics before even thinking of opening a practice account. However, if you have the basic knowledge, then you can combine demo trading with studying advanced trading strategies and the application of technical and fundamental analysis.
I read all that you write, and I’m thinking of that.
But can someone give me where to read and what to watch? something simple to understand that you don’t need a PHD to comprehend.
Work your way all the way through, start to finish. Trade demo while learning. DON’T trade real money until you get 3 months in a row positive. That might take years, or it might never happen for you. In the latter case, you have saved yourself a little money and a lot of grief. It takes a Doctor about 10 years to learn his profession. Why would anyone think this is easier?
I’m still demo trading every Monday to Friday using MT4 MetaTrader.I have two demo accounts.One large,50,000 and one small 5,000.I use the large one to test strategies,indicators and what I keep reading and learning and the smaller one I try to treat as a,“Real” account so try not to make rash moves on it and use what I learn on the bigger account.
I’m slowly getting there and this has been over nearly 6 months with a couple of breaks.
Take your time and keep watching videos,reading and practice.I don’t care if it takes another 6 months or more as it’s costing me nothing and the Market will be there when I need it.
Hello QuidQuoPro, nice to hear that you are on course to opening a live account. I also like your idea of having two different accounts. However, while it is good that you are treating one of the accounts like a live account. It is going to be different when you get a live account. This is because with demo account, you do not get things like order slippage or liquidity issues thereby trade execution is automatic. Nonetheless good progress.
I understand your concern but both the demo accounts I use do have slippage and liquidity.The main strategy/systems I use have spread indicators on my charts so I can see the variables.I don’t trade if the spreads rise above around 1.5 or before or just after any news events until I see how the markets have reacted.As I’m Intraday trading I’m not looking at long term trades as yet.
I have traded real money on a couple of Binary options brokers but didn’t like it and took my money out with a little profit.I may return to one of them at some point as,“Yes Option” were excellent and I had no problem getting my money back and on some of their pairs were a kind of hybrid BO/Forex trading inasmuch you could exit the Binary option trade before it hit the mark but with a lower payout.
Also because I always use my Visa card to place deposits I have insurance on my deposit money
You’ve already been told to study at pipschool. Go there, spend a couple of months studying and taking the tests, open a demo account to see how the platforms work and test different strategies.
There are no shortcuts, no gurus or magic formulae, no insider tips, just hard work
Most important is keeping your money management very strict and controlling the psychology is also necessary, without these even a good strategy can fail.
I agree when it comes to the school here at Baby Pips. It will give you a great start from where you can build on. I disagree when it comes to demo. I would skip that part and opt for a mini-account and a small deposit trading only 0.01 lots. It is very likely that you will lose all of that money, but I think the lessons you will learn in the process are priceless. In the end you need to decide how to proceed.
That looks like a 1-2-3 process, but I think we all agree that it is not so simple. There is a huge difference between using a practice account and real money. People think that the difference is that you get to lose/gain money for real, but that is just one of the differences. When you open a real account, everything is real, including opening and closing positions, and from my experience, this is the biggest difference.
