Complete beginner - how can I get started?

Beginner Questions
1

Hi, just wondering if anyone can give me advice on how to get started with forex, or help point me in the right direction? I’ve been doing my fair share of searching on Google, but all I can really find are a bunch of sites with biased reviews and affiliate links. It makes it hard for me and I don’t know who to believe, and which sites are actually offering genuine advice and recommendations.

Can anyone point me to a good forex broker for a beginner? What is the minimum I would need to invest into a forex broker account to get started?

Thanks in advance.

2

Well, first off if you havent already, read the babypips school. This will give you a good understanding of the basics. Almost everything you will need in learning is free, except a few books. Theyre not required but will help. As for a good broker its really based on what you like, so try multiple ones, I personally use IBFX. They offer a good platform (MT4 which is used by many brokers) and alot of cool free tools. One common misconception about forex is that you need 10000$ to make any money trading. You can start with as little as 100$ and over time build your wealth into the millions, assuming you are consistent. Dont open a serious live account until youve proven yourself consistent. Dont be afraid to open a 20-100$ account just to get the feel of live trading, though dont do this right away. If you want to invest the minimum I’ve heard of 1$ accounts before though I dont remember which broker offers that and I dont see the point really.

Once you get the basics down its time to start demoing and trying to find a platform/broker that you like the most. At first you will probably be a little confused with all the charts and platform options and such but that’s normal. After you find a good platform/broker start demoing and try to find how you like to trade, scalping, swing trades, long/short term etc. There are many different ways to trade and dont be afraid to think outside the box. From here you will start to determine how you like to trade and what you like to use to trade. You may start actually getting decent at trading at this point, but you will still have lots to learn. As you learn more you will start to change/modify your strategy for trading, and perhaps the timeframs you trade. Dont be suprised or discouraged if it takes you over a year to become consistent or even a decent trader. It often times takes people 1-2 years before they even have enough knowledge to become a good trader.

If you are serious then be prepared to dedicate a lot of time to trading. It will be like your own business on top of your day job (assuming you have a day job). Im not sure if 90% of traders [I]fail[/I] or if 90% of traders quit before their first or second year. Either way, something happens to where 90% of traders dont make it but, if you are serious about this, then you probably can become a consistent trader over time.

3

Thanks for taking the time to give me some honest and very helpful advice!

I have gone through the first few pages (still reading) of the babypips school now, as you have suggested, and I’m starting to get a better understanding of forex now, on top of what I’ve already learned from your insightful post.

Appreciate it. :slight_smile:

4

Your welcome. I have some more advice about indicators as well. As you will see on the babypips school there are “leading” and “lagging” indicators. Right from the start think of them as “lagging” and “extra lagging”. All indicators are based off of [B]previous[/B] price action. This means an indicator cant show you something until it has happened (there are some occasions where you can use an indicator to help you in real time and not based off of PPA, such as using a moving average as a channel. Once price hits the channel this could signal overbought/oversold conditions. This would be a true [I]leading[/I] indicator in this use where as using two moving averages to produce crossover signals would be a laggy use because the moving average is based off of past price action (PPA)). There are a few tools that I believe are true leading indicators, and ironicly only a few are actual indicators, the others are trendlines, support and resistance (all forms: fibs, pivots, murray math, etc.)

This does not mean that the use of “lagging” and “extra lagging” indicators cant or shouldnt be used. They can still give you good/decent signals and produce profits. If you use an indicator all it is really showing you is what you can already see because they just reitterate what is on your chart in the form of a moving average, whether it is a histogram, moving average or something else. They all show you something you can already see without them on your chart though sometimes they provide a good visual reference.

While you learn more about forex you will discover some profitable indicator based systems and some profitable price action based systems. Maybe you will combine the two? Or maybe you will side with one of the other. Doesnt matter which one you choose just pick what you like the most, both can produce profits.

5

I’d say what you need is the simple approach, which can get you into profit quickly 301 Moved Permanently

6

Hi skribblez,
I am beginner also, I recomend to you tymen’s thread. Tymen is experienced trader and amazing teacher
here is the link

forums.babypips.com/newbie-island/32400-finest-trend-trading-1.html

:slight_smile:

7

Babypips School

FXStreet Educational Center

Investopedia does wonders as well

Read EVERYTHING you can about money management because this is the only variable you can control.

Lurk this board and FxFactory

Try out all of the popular systems in the “Free Forex Trading Systems” board

What you’re trying to do is find a system that fits your personality. Some people like indicators because they can give discrete entry/exit signals. Others like to have more “creative” freedom via discretionary trading.

Demo trade until you are comfortable and profitable

Live trade to wealth

8

I see what you’re kind of getting at, but there are a few other variables you can control - like your state of mind for instance, that’s one you can control.

Also, I trade to a 100% fixed money management plan, see the attachment.

My theory is that all my trades carry the same risk, I always trade exactly the same thing at the same hours every day, I trade the same currency, so it follows you see that I’m only dealing with 1 variable - the market. I hope that clarifies my point - well , I know what I mean! :slight_smile:

But yes, possibilities are endless and there are some things you can control that have a major impact on your profitability.

9

After a year of being involved (part time and with interruptions), I’m finally starting to get the hang of a very important concept - how to learn how to LEARN :stuck_out_tongue: Its actually, in my view, quite a serious problem that hardly any trading literature focuses on.

The toughest question I had to deal with is whom and what do you trust?

I think the question is best answered by looking at how the Soviets managed to build the atomic bomb. The fact that the Soviet Union managed to steal the plans to the US atom bomb wasn’t enough - they didn’t just take the blueprint and follow it by the numbers. They actually had to recreate all the experiments in order to not only prove the formula, but to understand it thoroughly. The plans that Julius and Ethel Rosenberg procured acted to accelerate the development process, but Kurchatov’s team still had to do a lot of homework before they could trust the plans.

In my experience this is what happens with trading, you have to experience what you read in the books and consequently develop the necessary trust. With this will come a taste that will help you understand what works and what doesn’t, and what is best optimized for you.

Personally I’ve always been a skeptic by nature, so I don’t gravitate towards easy jack-in-the-box solutions. Some people take trading courses (and part with a pretty penny), where the instructors teach you a handful of systems that you can start with. But in my view there is so much available for free on the internet, that you end up saving so much money by simply searching around and developing a taste to help sort the wheat from the chafe.

In a way trading is similar to a creative process. A writer will get ideas for writing from daily events, and will hear snippets of dialog from people as they go through their day. A painter will take sketches of various things that will later be incorporated into their work. A trader likewise gets ideas from other traders, and then integrates it in a way that works for them personally and produces results.

Many people say “keep it simple”, but I think it helps to know the breadth of what’s out there first just so you can get a sampling of what is available to you and then make the choices. That’s just my opinion.

Lastly, I think that anybody who takes this business seriously and works on improving themselves WILL succeed given the time. I’m not there yet, but I believe more and more, even if my account gets hammered, that it is possible. Those who walk away and think that this is one big gambling game, or scam, etc. simply have a better use for their time than trading - and that’s fine. Different strokes for different folks.

10

What an excellent post! Sometimes you get posts that are just full of profound BS, but for a change this is profound, sensible, informative and very useful.

I hadn’t thought about learning to learn, and looking back it seems that’s exactly what I’ve done, I developed a piece of software I could use to fast track my learning of the system I’m using now, I’m not trying to do one upmanship! but I think I kind of wrote the book to show me how to learn kind of thing, O dear I’m getting lost in my own post, I know what I mean!

But what you say is so right, it’s different to sitting down and learning anything else. I think you should start a thread with this, I’m sure it would be really useful for new traders, even if you just repost the above post to start it.

11

Once you’re comfortable, that shouldn’t be an issue, imo.

12

You are so right, there must be another variable, I won’t accept that there isn’t since I won’t be able to argue with you. :slight_smile:

The psychology, though is probably THE most important side of Forex is not discussed as much as I think it needs to, I think most people just don’t get it, I don’t think you can be successful until you have that paradigm shift in mentality, and boy it certainly took me a while.

13

“imo”

Anyway, psychology and motivation is a commonly discussed topic on this board. A sticky at the top even delves into newbie expectations.

What I meant is that a sound strategy coupled with good money management (a.k.a. a system) brings you to the point where you begin to implicitly trust in said system. You start to take losses as they come with no mood swings and wait for the next setup. Trading live for a few months has brought me to the point where trading feels more like a “chore.” That doesn’t mean I hate trading. It just means that I feel monotonous even when on the wrong side of a trade.

14

Like a ‘chore’, yes absolutely, how the heck can prices just going up and down be interesting?

I’m like you it’s a means to an end.

15

If it was I you were referring to, thank you. I’m a big fan of being civilized, I think that traders should show a level of professional courtesy to each other, as you would have with any professional craft. I am not yet a professional, but I aspire to be.

One thing I’ve discovered on the trader forum circuit is that there are a lot of people who don’t really know what they’re talking about (the ones who want to ‘teach’ because it makes them feel they have something to offer when otherwise they are not succeeding), others who know what they’re talking about but are rude and obnoxious, or are braggarts and want to put everyone down, and finally, those who are truly eager to help but are frustrated by all the people who don’t bother to listen to them, so they stop giving advice after a while because they feel they’re wasting their time. Its a bit of a swamp that takes some experience to navigate.

The best advice I can give to someone starting is to allow yourself the luxury of time to get to know everything and get a taste for what this is all about. Don’t be in a rush to spend money or put money on the line. If you take that attitude I think you’ll come out way ahead in the end, and with more money in your trading account. So far, my net losses in the Forex market over the course of a year come down to $65. That’s pretty good when you consider that $50 of that was a free account I got with my broker. I save tons of cash by not buying books but borrowing them at the local library through inter-library loan. I attended the trader’s expo in NYC, and my total expenses were subway and bus fare, plus $15 for ONE book. A lot of other people there spent more, and I don’t think they are better traders as a result of that.

I can’t teach someone about trading right now, but what I can suggest is how to avoid falling into all the BS traps that are just waiting out there for you!

16

Yes!

You’ve got some damn good attitude to this, you’ve got a damn good chance of succeeding, you’re approach is so much better than mine at the start.

I succeeded in the end, but after much longer than it should have taken me, but hindsight, and If I knew then what I know etc etc. but it was just by sheer determination and getting really focused more than anything else, more than any knowledge etc.

17

I hope to follow in your footsteps, and it makes me happy to know that someone who is successful is telling me that I’m on the right track!

You’re absolutely right, hindsight is 20/20. We’re always told what to do, but unfortunately we often need to understand and learn from real life experience so we KNOW, not just from listening to someone else, what to do and what not to do.

In the beginning I purposely made mistakes I wasn’t supposed to make - adding to a loser, moving stop losses, etc. I now know from experience why I should never do these things. Unlike some people, I did these things on a $25 account, not a $25,000 account. I realized that everything you do is scalable, and in the beginning the probabilities of success are greatly against you. Since trading is all about probabilities, it makes sense to go with them - hence use a small account equity. That’s the beauty of Forex, you can do this. You can’t do that with stocks or commodities.

The more mature a person is, the easier it is for them to understand and follow the common sense advice (i.e. Don’t trust the get rich quick instincts, this will take time, this is not about ‘luck’, etc), and filter out the nonsense. The more a person knows themselves, the more they are able to understand their weaknesses and steer clear of them. Both of these factors, in my humble opinion, are what will either speed or hinder someone’s progress in ANY life endeavor.

Anyway, back to my monthly trading report :slight_smile:

18

Circumstances count for a lot, family and stuff too.

Consider this http://forums.babypips.com/free-forex-trading-systems/33326-complete-cat-mouse-system-money-management.html it’s what I trade.