Forex Newbie...some questions

I’ve been trading stocks online for over 10 years now. Had ups and downs. More of a hobby that banks me small amounts of money every once in awhile. I’m sick of the stock markets. I want a new challenge and something that is open to me 24hrs a day, as I have a career now that has nothing to do with trading. My goal to learn the basics of Forex (babypips school is awesome as I’m half way thru it), trade one major pair (Eur/USD) conservatively and in my free time just to see if I can manage the forex market responsiblity, and, if I can, see where this takes me. So my questions are:

  1. What is the best online brokerage to trade forex with first a demo, and then open up a small account to trade for real? I’ve been using ETrade (as I have been trading stocks on that and Ameritrade for almost a decade, but I don’t like their set up).

  2. Besides babypips school…any other sites/books that are recommended?

Thanks.

There is no “best” online broker. What’s good, better, and best depends greatly on [I]your[/I] particular needs and preferences.

Three considerations apply to almost everyone: (1) a broker’s strength and integrity, (2) the trading platform(s) available to you, as a customer, and (3) all the features, terms and conditions attached to the broker, to their platform and to their charting package.

You might start by looking at the largest U.S. brokers, as measured by capitalization. Visit the website of each broker, and take notes. If you like what you see, download their demo account. Demo accounts are free, and you can have as many of them as you please. If you find that they don’t suit you, delete them from your computer, or just let them expire. I’ve had demo accounts with brokers I no longer can even recall.

If you are not already familiar with the MT4 platform and charting package, get acquainted with it. It is, hands-down, the most widely used forex trading platform in the world. It was developed in Russia, and licensed all over the world. Even brokers who offer their own top-notch, proprietary trading platforms — such as FXCM — also offer the MT4 platform, because there is demand for it. The big attraction with the MT4 platform has always been that it is programmable and customizable. But, some brokers (such as FXCM), who don’t want to see their proprietary platforms eclipsed by MT4, have responded to the competition from MT4 by adding programmability to their own platforms.

In item (3) above, the question of features, terms and conditions involves some things that can be measured: Spreads, number of currency pairs offered, initial deposit required, maximum allowable leverage available, etc. But, it also involves many subjective things: Do you [I]like[/I] what you see when you browse a particular broker’s website?, Do you [I]like[/I] what you hear when you talk to the broker’s rep on the phone, Do you find this broker’s platform and charting package to be intuitive and easy to use?, etc., etc. Only [I]you[/I] can judge what’s right for you.

It won’t be the end of the world, if you make a mistake and choose a broker you later decide you don’t like. Just shop for a better broker, and move your money. But, hopefully, you will have all that figured out during the demo stage, before any real money is involved. That’s sort of what demo accounts are for.

As for books, etc.: Concentrate on the Babypips School, for now. When questions arise which don’t seem to be answered in the School, search this forum for previous posts on those topics, and/or post your own questions in this (Newbie Island) forum.

When you’re ready for more, take a look at the InnerCircleTrader threads, the Alternative Templates threads, and Petefader’s Supply/Demand and VSA thread. These threads are long and complicated, and reading them could take you months. You might want to begin by skimming through them, to see whether your appetite is whetted.

Don’t try to learn “all about” forex in a month, or a year. If you are serious about forex, you will be reading and studying for the rest of your trading career.