I am not waving, I am drowning, please help a Newbie!

Please bear with me this is a long post.

Having done Pip school twice, read books, read online, taken copious notes I considered it time to take a demo account. Absolute disaster has happened. I started with 3000 GBP the smallest account with this broker. I wasted 1500 GBP getting to know Metatrader, buying silly lot sizes not knowing how to place an order successfully etc. Now I have calmed down a bit I am still losing terribly. Would somebody please answer the following questions:

Which time frame should I be working 1min, 5min, 30 min or longer.

How low should I set my Stop loss against my balance in hand.

Where should I put T/P.

I am currently trading GBP/JPY 1:1 - should I change?

Is Metatrader the best software to use?

Pip school is amazing but it did not prepare me for the speed at which decisions have to be made. In the school the pyschology of trading was mentioned, I did not know when I read it how true it all was. I am only losing virtual money and that is getting to me!

Forex is a fascinating subject I do not really wish to give it up now after so much study.

Thank you for reading this.

Suke

my advice

Dont start off with gbpjpy, it is very volatile, even on the smaller timeframes.

I suggest you start off looking at the daily bars. on one of the majors eurusd gbpusd etc

Create yourself a trading plan, when you are going to enter, exit, how you are going to manage the risk etc

Hope thats enough to get you started.

N

To n aftab. Thank you for your advice I will change from GBP/JPY as you suggested.

Suke

Just about all of those questions you asked have to be answered by your trading strategy and your own experience with it as far as how effective you are.

For instance with some experience with any one strategy you will learn that the strategy statically has a breathing room of x amount of pips against you before going your way. So, your stop loss should be around there.

TP the same thing, you have to learn your strategy first and find out what is a realistic TP for your strategy.

Throwing out random numbers for TP and SL based only on your account size without knowing your strategy and how it acts is pointless.

SL and TP really shouldn’t be dictated by money management. Money management simply dictactes how much each pip is worth. So, basically divide your risk by the number of pips in your stop loss. If your stop loss is 20pips and you want to risk 1% of your account on 3k, then you are willing to risk $30 dollars of your account. Divide that by your stop loss. To risk 1% and have a 20 pip stop loss the pip value should be $1.50.

Just remember to recalculate when you go up and down each day. This is for each position. So each postion risks X percentage of your account. If you keep doing well you will slowly compound your account. If you consistantly lose at least it will be slower and based on X% of your current account.

You mentioned, “trading silly lot,” sizes. Trading a size to big for your account it quick way to lose your entire account. You need to trade appropriate size so you can weather draw down while waiting for the opportunity to use your edge.
For money mangagement and pip value I recommend, “dragon33’s,” money management. The basics of it are divide your account size by 400 and that is your pip value. With a 20pip stop loss you would be risking 5% per trade. This is a gross generalization. You would have to decide what amount to risk on each trade and adjust your stop loss.

The time frame you should be watching depends on what type of trading you are doing. Are you scalping are, are you swing trading, are you trading on hourly candles? Generally, if you are going to scalp you want to look at the hour and use that as the long or short bias. And look at the overall trend and keep that in mind. Then trade on 5 M candles and use 1M candles for precise entries. Again this is very general, you’ll have to let whatever strategy you learn or make up, dictate this.

P.S. if you wasted 1,500 getting to know metatrader you did not demo long enough. As much as people argue about how long you should demo, it should definately be long enough where at least operating the platform isn’t causing losses.

Hello, well I’m able to help you with some of your questions, not all because some of them are my questions to hehehe. No talking about the pair on which you should trade, well everyone states that we must start with the EUR/USD, is like one of the standard trading pair, but there is also the GBP/USD or the USD/JPY. Try them. Now talking about the TM it depends on what of trader you want to be, if you’re like the scalper type short TM are very recommended and if you’re along term trader type well work with the 4H or 1D. And last, I calculate the S/L and T/P depending on the calculation of the S/R, that sure helps me a lot. Oh one last thing, the MT4 is the platform that almost all users use for fx trading, however there are alternative ones, hence Ikon Platinum. It’s not a matter of which one is the best or the worst, they are just different trading platforms you can have access to. I hope I was of some help.

Suke,

please take a moment of your time, look in a mirror and laugh at yourself a whole lot !

the reason for using virtual money is to prevent a reality that you describe as happening.

when trading, all other things not being a part, one has to know their tools and MT4 is just a tool ----- Im sure youre beginning to learn it well !

RELAX — there is no shame if you blow the account 20 times, just as long as you LEARN what its about and how to do it, and sounds like youre doing just that !

PLEASE just relax and keep trying strategies and technique till you learn it, which will prob take you a year if youre much like the normal new trader !

Each day you get better and better and will be laughing at yourself for your “beginners” abilities as they turn into much more experienced abilities.

I can only offer one piece of advice — “just do it !” and soon you also shall be giving advice, such as those below and happy like clam !

of course you could always trade EURCHF — just buy on even weeks and short on odd weeks ! (NO, thats a joke !)

all of the below posters have good information and you will find lots more as you go forward (and youll even begin to understand some of it !), just understand that youve entered a whole new world, with its own culture, rules and battles and youre only beginning to find your place in it !

the longer the timeframe, observing good money management techniques and reasonably loose stop losses, is a better idea for the newb than the shorter ones, although you will deal with more drawdowns on the way to profit. If youre complaining about the “need for speed” then youre working too fast a timeframe for sure ! The 15 minute is “reasonably” easy to play once you have a few months experience, and especially if you take a look at the LRC channels ive described over on my thread which provide a visual look at what your price is doing, but sticking to the 30 minute and the H1 will earn you pips and are reasonably easy to deal with !

as others state, the MT4 platform, although being a russian spy and reporting your every move back to some KGB operatives office, is the de facto standard for we retail traders, although the platform has no affect on trading !

with time and experience your psychological outlook will go thru many changes — the ultimate change is when it becomes BORING — thats when, if youve learrned well, you are capable of the best trading there is !

[B]Now – WHAT pairs do i trade ?
WAY simpler than you can ever believe ![/B]

pull up a chart of all the “majors” (other words, dont find the Castellian “ropei” and the Mongollian “sistend” and try to trade them — probably NOT a really good choice, but look at a 5 minute chart of each currency youre interested in AND PICK THE ONE WITH THE SMOOTHEST CANDLES, in size, direction and movement — Have you ever heard the expression — [B]“GAWD, thats one ugly chart ?”[/B] What you want is [B]“my golly, thats a pretty chart !”[/B] and once you find it, no matter what the currency pair (as long as something common and tradeable on this planet !) TRY trading that one !

When we raise traders in the outback, we start them on pablum and pretty charts — they easily outgrow the pablum, but LOVE those pretty charts !

any more would be the start of that book I shall never write, thank goodness !

PRACTICE AND LEARN, PRACTICE AND LEARN — a long time before the military lets you out of the flight simulator and into the F 16, a LONG time !

enjoy and trade well

mp

[B][I]Within the great hall at Elfinore stands a wondrous coffer, precisely four cubits square and securely latched against the outside world. Inside that repository, shut away from impertinent eyes, abides many an intriquing trading secret garnered from around the world and over the ages !

As a child, i used to watch from the darkness as the secrets were debated and annotated by the elders. No one there held a single thought of my presence – BUT I KNOW WHERE THEY HID THE KEY !! [/I][/B]

Wow, so much fine advice that I will surely take on board and utilise.
My thanks to ThePhoenix, Reggie59 and mp6140 for replying to my post.

Suke

Why on earth would you open up a live account when you have no clue what you are doing?

unless my old eyes failed me, he opened a demo account.

mp

whew, ty. When I seen 3000 I assumed it was a real account.
My mistake.

Yes it was a Demo account!
Suke

Yes it was a Demo account.
Suke

Yeah, I understand how it feels. Last week I could do no wrong, this week well my wrongs sure did out weight my rights. Anyway, there is a lot of great information out there, and more tucked away in books. I have read good guidance from guys like mp and will continue to learn and grow. Just like anything else we have to crawl before we walk, and I guarantee its taking my boy more than 2 weeks to walk, shucks hes been wanting to be mobile for 6 months now…The good news is, we are playing with fake money and as long as some of the experience guys stay around, we can try to gather the crumbs of wisdom until we too are making some money.

For me, its just a thing to play and learn with. Some guys like to play xbox, well my time waister is 4x. The only difference is, my countless hours at play will hopefully results in a small bit of extra money at the end of 2009.

-Dale

I find myself as the ones that waste their times playing with MT4 I guess that made me develop a discipline. I found all the guidance on babypipsschool, then I started to investigate every single unknown term and one thing linked another. It has worked for me.

It’s all right I guess we all have had the same questions. Though I consider some of your questions will be answered as soon as you trade and get experience. I can’t tell you what T/F to use or what pair to trade. Probably what works for me, will not work for you. You shouldn’t be finding a disaster your demo account, that’s the purpose of it in the first place. I can say that most of us have lost lots of pips on demo and is good because you begin to understand what to do or what not to do. And is the same about pairs, S/L, T/P. All about practice and learning all the time.
Metatrader is the most common one and probably the easiest, but there are other like Ikon Platinum that also offer a good trading perspective and excellent charting.

My thanks to all people who have replied to my post. Have thought very carefully about the advice given, it is so nice not to feel alone. This Forum is the best!

Had a much more successful day yesterday - who knows by the end of next week ‘I may be waving!!’.

Thanks again.
Suke