A bunch of questions

Beginner Questions
1

Hello everyone,

Before I ask you all about anything, I would like to say a few words about myself, which I think will help you to guide me in a better way.

My name is Seb and I come from poker background.
I have been playing for quite a while now (not so much at the moment though) and had my down and upswings. I have been educating myself in the matter and developed a quite good level of patience I belive as you do not play every hand and enter every spot as a poker player, same as you do not enter every available trade.
I have learned that to do not think about money while playing, instead thinking of resources, tools or either buyins that I invest in. Simply beacuse it is easier to dettach yourself from emotions linked to money.
When been playing online, I followed a thing called ‘Bankroll Managment’ which allows you to play at a certain percentage of your bankroll to do not get busted after a few lost games. For instance if you are a tournamnet player you should risk only 1% of your bankroll (sounds familiar?) and for cash games it works out at about 3-5%.
Knowing your ‘Bankroll Managment’ now you set up your ‘Stop-Loss’ which could be 3 buyins.
In this way you stop yourself from tillting and wasting more money when having a bad day. Having a few bad days in a row would not stop you from playing as you know that you follow ‘The Rules’ and you are a good player so therefore you going to be a winner in a long run.
The other interesting thing I have learned is a ‘variation’. Basically, no matter how good you are at poker and no matter how much you made before you may lose 10, 50 or even 100 games in a row playing your ‘A’ game (meaning you played same way as always in regards of your strategy) and that is because you cannot always win, even if you are the best player in the world. It is just mathematically impossible.
The same thing people say about trading, you cannot win every trade as you cannot predict everything.

You can play poker as a gambler or like a pro, same with trading and it comes down to education, managing your resources and choosing the best spots.

There is a lot of similarities between the two mentioned above and all that technical approach came from investing I think (not sure about that).

As you guys can see, I have got a pretty fair mindset to start trading, just need to get the education. Speaking of which, I am reading your forum, forexfactory and a book called ‘Currency Trading for Dummies’. I chose that because after reading reviews of some books this was mentioned as the most basic one. I do not know if it is the best option for the first book as they recommended to open a demo account just after literaly few pages which I have not done as I did not feel confident about it. The book itself is inconsitent mentioning stocks, futures and all sort of things too often I think, but I started reading it so I will finsh it.

Here my questions start:

What books would you recomend for a begginer?

What shall I focus on the most now? Gaining theoretical knowledge? Should I be checking how currencies doing on a daily basis? Oppening a demo and practising in a demo? …

I am overwhelmed by a complexity of trading and a bit confused same time. Things I read about do not seem so obvious as I do not trade yet and I do not have an account yet so I cannot really visualise it. I really want to do it as I know that I will be able to but need a guidance of you more expierenced guys.

I do not have any surreal expectations, I am just looking for an alternative source of income.

Sorry for such a long post and thanks for reading.

Any feedback would be much appreciated.

Seb.

2

Find yourself a decent broker not a scam 1 then download thier charting software like MetaTrader4 / when logged into your broker open a demo account and deposit the same amount you would be using for real. Then practice on that until you have learnt the basics like how to use the software platform, how to open orders, placing a stop loss on your trades etc… Whilst at the same time as learning how Leverage of your money works. Then find a simple strategy to use whilst Managing you risk at all times.

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3

Thank you for your reply @A1lenTrader

Scam brokers is another thing I forgot to ask about. I have seen so many post of people who claims that every broker is a scam. You get same sort of people on poker forums who try to say every poker software is rigged cause they always lose. Most of these people try to make an excuse for their bad strategy or game they play. I know it is a bit different with brokers as some of them are regulated some not but at the end of the day they get money from spreads and do not pay anything from thier pocket when you win as they are only a link between you and the market right?

What broker wuld you recommend?

Seb.

4

Different brokers have different liquidity supply some have better than others …! There are 2 types of accounts really 1 is a spread betting account where you pay the broker the spread and no commission. 2 a ECN account where spreads are smaller but pay a little commission on trades. Also there is a thing called swaps if you hold your trade overnight you either earn interest or pay interest. Every broker seems to widen the spread at certain times like tonight’s open spreads will be wide when market opens then will get smaller bit later on 20 mins an hour or something like that. Also on big news events. My advice get a ECN account pick the right times to trade when spread is low .

5

Thank you once again @A1lenTrader

I won’t invest much for my live account lets say £1000, I am based in UK.
Is ECN account still will be a good option for me?

Seb.

6

I’m. Also in UK, spreadbetting tax free if it’s not your only income but ECN / CFD’s are taxable.! Also there is a cap on leverage now i started with LCG (LondonCapitalGroup) 2 years ago with leverage of 1:500 i put in £250 and still earned £100 + a day scalping on 5min / 15min charts. But now they offer me 1:5 leverage so i moved to IC markets because they don’t have offices in UK or europe so no leverage cap.

7

Like everything else the only way to learn is with Time and a practice ÂŁ1000 is prob a better starting capital just use 0.10 lots to start which will get you approx ÂŁ1 per pip on gbp/usd or 0.05 lots for 50p per pip to start. Always put a stop loss on your trades

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8

Thanks a lot @A1lenTrader

Well, it wouldn’t be my only income, I work full time.
I will have a close look into spread betting and scalping and see what suits me better.

Yeah, I agree with you, practise makes perfection.

Seb.

9

Spreadbet sounds better tax free and no commission but ECN commission isn’t alot and spreads are much lower even when the broker widens it to say 15/20 pips, the spreadbet would widen to about 30/40 pips and that’s what takes most traders stops out.
If you work maybe scalping will not be for you try trading off 1hour / 4hour charts . My friend trades off the 4Hr chart and does realy well.

10

Thanks @A1lenTrader

What does it means for a trader when spreads widens a lot? Means that you might lose and gain more? Cause spread is a difference between buying and selling price isn’t?
I get quite a lot days off even though I work full time. I could do 1 or 4 hours trading on my work days and maybe scalping on off days as it requires more time. Is it better to stick only to one style at the time or mix it all up?

Seb.

11

Eg. If buying 0.10 lot of gbp/usd and spread is 0.5 pips broker gets 50p if spread is 20 pips broker gets ÂŁ20 so you would be either 50p down or ÂŁ20 down as soon as you open trade.
Yes spread is difference between bid and ask price

12

GBP/USD Market Now Open

GBPOpen
GBPOpen1013×530 55.8 KB

7.7Pips Spread Also gaped up nearly 50 pips that’s taken a lot of Shorts stop losses out…! he he

The white line is ask Grey line is bid : if i Buy (go long) it will open my trade where the white line is then i have to wait for grey line to go up past it to start making profit.

If i sell (go short) it opens my trade on the Grey line then i have to wait for white line to come down past it to start making profit.

10 points = 1PIP

so if the spread is say usually 0.2 - 0.3 pips i dont have to wait as long as well as paying less spread to broker.

13

Seems quite simple but I assume it’s not as simple as it seems. What chart are you using? M1 - a minute?

14

Yeah 1minute so you can see spread better.

i just opened 2 trades to show you how much commission is on ECN

0.5 lots gets me 50p per pip
0.10 get me ÂŁ1 per pip
1 Lot would get me ÂŁ10 per pip

AussieCommission
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But don’t forget if i open 1Lot and it went against me i would be losing £10 per pip…!!!

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15

On the daily chart the pin bar suggests it may be coming down soon

AussieDaily
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16

Thank you for your help @A1lenTrader

Everything is getting more clear now.

What the pin bar reflects on charts?

Sorry for a late reply, had an early one got work today.

Seb.

17

For books, this is a good way to start.

Since you know how to manage money and good in psychology, I believe you’ll do good in live once you acquired the theoretical knowledge including practical stuffs like charts and indicators and you applied these to your trading practice well. Welcome to Babypips. :slight_smile:

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18

Bulls tried to push price up but bears pushed it back down. Looking at candle before it “Thursdays candle” there was a big push up then Fridays candle the pin bar tried to push up but bears kept it down . Read a few price action articles.

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19

Thank you for you reply and a warm welcome @MasonPorter

I am happy and grateful to be here, comiunity seems very civilised and helpful. Sorry for asking same questions regarding books though.

@A1lenTrader
Will do, thank you.

Seb.

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20

Yes, pretty much that’s an indication that there are more sellers than buyers

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