Newbie looking for help :)

Beginner Questions
#1

Hi Guys,

Total newbie to forex! Been paper trading for around 7 weeks now. I am in the sophomore year on the BabyPips school and as much as this is all new to me having studying again after a 10-year break is fun! But a lot of getting used to.

I have a few qs to bounce of you guys:

How long did it take for you guys to grasp a basic understanding of how the FX market works?
How long did you guys paper trade for before setting up an real account?
Is FX profitable for retail traders? The whole 95% of retails traders lose money is kind of intimidating.
Are any of you guys consistently profitable? Or is a more like a few big wins follow by a series of losses?

If anyone can help I would be extremely grateful! And a big thank you to the runners of this site, its really, really useful.

Thanks!

TOP

#2

For a “[I]basic[/I] understanding”, very little time. A basic understanding isn’t complicated at all? Hours rather than days, anyway.

Four years.

And then another three years after that before I was really making what most people would call a living from it. And I had a lot of initial (and continuing) advantages which many people don’t have.

For a small minority, I think. (Just like most forms of attempted self-employment?).

These figures are widely bandied about without sources being cited for them. Who knows what the truth is? (If I had to guess, I’d guess that it’s actually higher than 95%, to be honest, but just like everyone else I can’t prove it or even really adduce any evidence for it.)

There are certainly some of us here making our livings this way. (I actually switched from spot forex to futures a few months ago, so strictly speaking I’m no longer a forex trader, but I did eventually make a living from it for four years, and the switch to futures hasn’t really changed how I actually trade very much at all.)

From my perspective, it’s very regular, small wins interspersed by regular, very small losses. Successful trading is primarily about risk management, not profit maximisation. I now do about 100-150 trades per month, and my trades are open for anything between 5 minutes and 5 hours (with the [I]average[/I] much nearer the 5 minute end of the scale). There are many other ways, of course, but that’s what suits me. I’m not interested in “a few big wins”: I need my steady-ish monthly income.

Welcome to the forum. Asking more specific questions, whenever you’re ready to, may produce more helpful responses. Good luck!

#3

Lexy is one of the best around here,

so consider it an honour to have her spending time on such a detailed reply :slight_smile:

I hope that many more will answer!

#4

lexys and I are at opposite ends of the spectrum when it comes to trading style but seeing how we both are having success shows there are lots of ways to make money trading, you just need to put in the time to find what works for your trading personality. I suck at short term trading, but I seem to have found my nitch in long term trading. More then two trades a week is a lot for me and if the trend holds I could be in a trade for many weeks. I do most of my chart work on the daily chart then may drop down to the 4hr or 1hr for my entry. I also do a Strong Weak ranking to identify the Strongest and weakest currency , buying the strong and selling the weak is how you make money in this game. I would forget the paper trading and get yourself a demo account with the broker you plan on trading with. I use FXCM, it’s free and you can see how trades play out on a real trading platform. Then as soon as your comfortable open a small live account, a few hundred dollars of money you are okay with loosing. Keep going with your Babypips school that will give you a good foundation but the really learning begins when you start trading for real money.

Good luck, and above all have fun

#5

newbie here. still playing with demo account. completely agree that 95% is a myth. if anything, somehow i feel there are more people making living this way than what’s publicly bandied about.

#6

Hi Top1990,

First, i will let you know that forex business is just another business type that exist in this world. many people think this business is good and better. actualy it isn’t that sweet.
Sure trading in computer is lot more easier and got other benefit. but they also have their disadvantages.

O.k straight to your question:

How long did it take for you guys to grasp a basic understanding of how the FX market works?

  • days maybe for the basic theory. but you must know that trading is all about supply and demand. if the Demand for cetain currency goes up. the value will sure goes up also and the other way around.
    So you must know what basic and analysis which represent this human mind for demand and supply.

How long did you guys paper trade for before setting up an real account?

  • 1 years, but i have the basic of real trading since my family runs trading company. but it’s on commodity such as gold, leather, property, etc. so i know why we need to read the human mind and behavior. so before i enter this computer trading. i need to know how to read human mind in international scale and not regional scale.

Is FX profitable for retail traders? The whole 95% of retails traders lose money is kind of intimidating.

  • FX is just like you become an entrepreneur for yourself, becoming entrepreneur is not easy. you need mentally prepared, keep learning, discipline and work hard. most people is not mentally prepared for becoming entrepreneur. because they cannot handle the problems and risk. so the same as FX traders

Are any of you guys consistently profitable? Or is a more like a few big wins follow by a series of losses?

  • I’m constantly making profit in real life commodity trading in property and other commodity by knowing demand and supply. (family business)
  • i also sometimes use computerize trading. and I only making around 2% a month. not a big amount but lot more better than banks could give.

Above statement is my personal experience and point of view. different trader will have different point of view as long they able to survive in the trading business.
Hope there is a lot more answer from other people so you can check what the real FX world look like.
Good Luck

#7

Hi,

The answers you are looking are going to be a different from different people, because there is no standard procedure for everyone to follow and develop them-self as a traders with same pace.
Forex market is like any other market where some people are making money and some are losing, so profitability depends of the traders personality, level of education, discipline, trading psychology etc.

#8

Thanks Guys!

All of the advice has been really helpful.

I’m currently using a demo account with ig.com I’ve had successful trades but currently around £190.00 down.

The funny thing is these trades have been profitable but then the market turns in the other direction and I am stopped out.

Should I be taking profit earlier? Maybe taking something off the table at around 30 pips? Then maybe again at 50 pips?

Thanks!

#9

This reminds me of the film “Withnail and I” (1987) where Danny (the drug dealer), while smoking

a massive joint, says:

“Politics, man. If you’re hanging onto a rising balloon, you’re presented with a difficult decision - let go before it’s too late or hang on and keep getting higher, posing the question: how long can you keep a grip on the rope?”

So it is with profitable trades: how long do you ride the gains before risking to lose it all?

The answer can only be your own :slight_smile:

#10

While trading on a demo don’t use the stop, you might find that your performance improves

#11

Follow this advice and copy it on a real account - you get all you money lost while initial performance is surely better:18:

#12

The numbers of pips depend on your trading-style and duration of trades, but if you’re finding that almost all your trades initially move in your favour, then the general principle you refer to above can certainly be a very good one.

Look at it in terms of [I][U]risk-management[/U][/I], trying to develop a trade management structure which [I][U]avoids losses[/U][/I] as much as possible.

You might be able to do that by trading three lots/contracts/units, in which you close the first two thirds of the position quickly, banking a small profit which will be enough to cover the cost of the third part of the trade, and then you can try to “let that run”, perhaps trailing its stop (manually, not automated) as it goes?

The effect of this can be that you have a large proportion of trades making just a very small profit, interspersed by much more occasional bigger winners. But that can be a good thing! Also, if you can perfect that, you can perhaps safely increase your positiion-sizes to some extent.

#13

229-CapitalTrader

See the ‘Let profits run’ section :slight_smile:

#14

Thank you this is all really helping!

Risk Management, surely all this is is understanding and fully accepting the amount of money that you could possibly lose when in a trade? Is it more complex than that.

And Stop Losses? Some say trade with them and but I have heard people trading without them. What are your opinions?

If any of you guys come to London I’ll buy you a pint!

#15

http://forums.babypips.com/newbie-island/3669-i-dont-use-stop-losses-do-you.html?highlight=trading+without+stop+losses

http://forums.babypips.com/newbie-island/76245-stop-losses-killing-your-trades.html?highlight=trading+without+stop+losses

#16

People who trade without stop-losses can’t usually afford a round of drinks … (just using up my “provocative post allowance” for the day, you understand) … :stuck_out_tongue:

#17

I upvote this.
How can you determine how much you can win on a given trade if you don’t know how much you can lose?

#18

Always take small wins rather than big losses

#19

I think everyone already pretty much covered everything, probably much better than I can. I will speak on the 95% failure rate of traders. Trading is a performance driven task, similar to sports. I would say the success rate of becoming a professional sport player is even lower than becoming a professional trader. though most of those people would not consider themselves as failures. I wouldn’t focus on what other people are doing, try “your” best because that is all that you “can” do. Good luck man, just read the trades I post and go the other way and you should be fine :18:.