Hi all,
So I came across this forum just after Christmas and started the School of Pipsology. For around a week, I was glued to my screen for at least a few hours a day, however due to work commitments I slacked a bit and have started looking around the forums again recently. I’m currently at the beginning of High School in the SoP and have found it very useful so far - my plan is to set a bit of time aside every day to go through the rest of the school.
In the meantime, I have a few questions from my general observations which I would appreciate if someone could help me with (unless the rest of the school will answer some of these?). I imagine a lot of new traders will be asking similar questions:
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[li] I am from the UK so my account will be in GBP. Am I right in saying that if I was to trade e.g. a EUR:USD pair that I’m actually trading 2 currency pairs as I have to exchange my GBP in EUR before I can trade EUR:USD? If this is the case then I guess there’s a second level of risk I have to look out for as if my trade is successful, the GBP:EUR might move in a direction that wipes out my profit?
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[li] Is forex trading a nil gain nil loss market? In other words, we are trading against other traders and overall the market equals out?
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[li] When entering into a transaction, how can brokers always have a party willing to take the other end of the transaction e.g. if I buy something like 0.567 lots EUR:USD @ 1.1406, how can the trader sell the exact same amount of EUR:USD at the same price (assuming no spread). Surely there is no seller specifically for that amount and that given time?
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[li] What influences movement on a smaller scale e.g. on a day where no major news released or anything? Is it just simply the number of buyers and seller competing against each other?
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[li] Is there a preferred time frame that people use to trade? I know this depends on the traders preference, however I was a bit confused as looking at (for example) a one minute chart, there would be a ridiculous amount of fluctuations which would make technical analysis really confusing and hard to find trends.
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[li] Am I correct in saying that technical analysis is to an extend self fulfilling because of the fact that all buyers/sellers in the market look at graphs in the same way? The reason I ask this is because something like Fibonacci’s retracement has nothing to do with trading in my own head (I might get shot down for this). It’s just a mathematical theory which has been applied to charts to aid people as to when to trade. As everyone looks at this in the same way, it becomes self fulfilling?
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[li] How many trades do people typically make in one day? Again I know this is one of those ‘how long is a piece of string’ questions…
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[li] Do you have to leverage your trades? The platform that I have been using (Trading 212 - which I don’t intend to use when I properly start trading) automatically does this but I imagine you don’t have to? I couldn’t see a setting to change this.
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[li] On 29th December at around 11pm UK time, the GBP:USD went up and down repeatedly by around a pip or two every second. What was the reason for this? I tried looking straight after but couldn’t see any reason?
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Apologies for the list of questions but any help would be much appreciated and hopefully other beginners will find it useful too!