Newbies Guide To Becoming A Forex Trader

Folks, I feel the passion, but there’s a negative trend already brewing that we don’t want to see spill over. Please move on back to the topic at hand, A Newbies Guide to becoming a Forex Trader. I’ll also mention that some of the recent posts will be removed as they don’t completely conform to our Forum Policy. However, while getting a bit testy, the discussion about who newbies should trust/follow/read is still a worthy discussion to have, even if it doesn’t directly relate to trading. Some posts may be partially edited, and others will be removed completely.

Again, please take note of our forum policies, especially related to being respectful and keeping the language clean. Disagreements are fine, but belittling other members to get your point across (or just to be rude) doesn’t help anybody, and simply takes away from the original discussion.

If you have any questions about these actions, feel free to PM me or another moderator, or shoot us an email at <[email protected]>.

Pipstradamus

Thank you, Pipstradamus… Apologies if I went a bit hot-headed in some of my comments.

Like many people have mentioned, the content of this tread is very helpful, especially for newbies. eddieb, thanks for creating such a good thread.

I cannot agree more. Cutting corners is never the right way.

In my personal experience this has been very true. Newbies like me are often delighted to see the intial gain in our account and rush to risk more money. Next thing you know your account is down 30%

1 Like

PMH speaks of learning the hard way, there is no truer lesson.

I learned the hard way many years ago that the market is no play thing, it is not a discipline to approach lightly if a person values their wealth.

I’d say the absolute worst thing that can happen to someone new to the market is to have early success, not only does this lull him/her into a false sense of security but it also encourages even greater risk inevitably causing the first lesson to be even more painful.

Thank you PMH for sharing your journey thus far.

This is so true!

This is also why in the (video)gaming world you find that a lot of

free rewards/upgrades come early in the game, to get people’s

confidence up and get them hooked to playing more; after that,

to unlock your character’s extra skills/abilities you then often get

paid upgrades which not only save you a lot of time but sometimes

are obligatory in order to progress… This is a bit like early success

in Forex, or the ‘bonus’ scheme that some brokers offer if you open

a live account, to get you hooked… Back in the 1990s, banks used

to offer freebies to university freshers to lure them into opening

a student account with them… It is the same logic, I suppose…

It is up to us to be discerning and educated enough to know whether

a particular service is a good deal or actually a really bad one…

Sadly, with $$$/£££/Euro signs waved like a red rag to a bull, many

newbie ‘traders’ are lured into bad decisions with the promise of rich

returns, inevitably leading to tears and a bruised ego, which is indeed

learning ‘the hard way’.

In the perfect world, no trader would go bust, and no business would

go under, but that is not how things work: you need losers for the winners

to make their profits, so it all fits within the wider cycle of money changing

hands…

Oh well, that is my ‘thought for the day’… more PipMeHappyisms later on.

:slight_smile:

Pipme, you are falling into a train of thought mostly ascribed to the market fringes, thinking like ‘you need losers for the winners’ or “the market needs a constant churn of losers to pay the few winners”.

It’s not true, the market does not think in terms of winners or losers, today’s winner is tomorrow’s loser, completely irrelevant, of no consequence, the market is the ultimate now.

Mostly that type of thinking comes from guys who work for a living paid for by the market, doesn’t mean they are winners or losers, or they they have some sort of superior knowledge, just that they get their bread paid for by market participants, both ‘winners’ and ‘losers’ in their language.

I would be interested to hear how new traders feel the upcoming UK General Election may affect their trading.
Perhaps some senior members could give them some advice

I’m more concerned that by this point in time the FCA will have already laid the smack down on retail traders with their new regulations.

However, if we do all come out unharmed on the other side; we have the snap election to look forward to. On a personal level, and i’m not one to follow politics in great detail, the snap election just provides more trading opportunities and more volatility within GBP/USD [which, we really, really do need as this currency pair has become dryer than…well a dry thing).

On the announcment of the snap election today GBP/USD displayed a 200 pip range, now in excess of 250 pips. This is the first time we have had a daily range of this magnitude in the last 90 days. 200 pip daily ranges used to happen in GBP/USD each and every day - I welcome a catalyst to drive volatility.

The UK election has already had a bit of an impact, with Sterling rising to a new 4 month high against the dollar.
Will be interesting to see how this pans out over the coming weeks.
Certainly makes for some trading opportunities

…and it should hopefully stay on top a bit longer …

Again,

why does this not get put up as a sticky?

Nevermind… I do hope that newbies read this thread BEFORE posting the SAME QUESTIONS

over and over: it would save so much of THEIR time and of the time of longer-standing forum

members who run out of energy repeating the same answers!!!

Cheers :slight_smile:

Than you for this thread from another new trader.

1 Like

Great thread. Basically, You’ve got to feel the trend in a currency pair (done largely with technical analysis and practice). Also, risk management is important. If you enter a trade, the upside potential should be higher than downside potential.

1 Like

Why the upside potential though? If you’re having short positions, shouldn’t it be the other way around?

I think by ‘upside potential’ he means the likelihood of a profitable trade, and ‘downside potential’ meaning the risk of a losing trade

Ah, that makes more sense than it referring to the direction of a trend. I understand now.

The strategy can be utilized on short-term positions as well as long-term

Hi, long time since I was last here.
I thought I would share a story with you, one a fellow trader introduced me to.
This is copied from Wikipedia, but the tale is available in book form and might even be useful for any of you with children as it teaches a useful lesson for life.

WHO MOVED MY CHEESE?

Who Moved My Cheese? features four characters: two mice, “Sniff” and “Scurry,” and two little people, human metaphor, “Hem” and “Haw.” (The names of the little people are taken from the phrase “hem and haw,” a term for indecisiveness.) They live in a maze, a representation of one’s environment, and look for cheese, representative of happiness and success. Initially without cheese, each group, the mice and humans, paired off and traveled the lengthy corridors searching for cheese. One day both groups happen upon a cheese-filled corridor at “Cheese Station C.” Content with their find, the humans establish routines around their daily intake of cheese, slowly becoming arrogant in the process.

One day Sniff and Scurry arrive at Cheese Station C to find no cheese left, but they are not surprised. Noticing the cheese supply dwindling, they have mentally prepared beforehand for the arduous but inevitable task of finding more cheese. Leaving Cheese Station C behind, they begin their hunt for new cheese together. Later that day, Hem and Haw arrive at Cheese Station C only to find the same thing, no cheese. Angered and annoyed, Hem demands, “Who moved my cheese?” The humans have counted on the cheese supply to be constant, and so are unprepared for this eventuality. After deciding that the cheese is indeed gone they get angry at the unfairness of the situation Haw suggests a search for new cheese, but Hem is dead set in his victimized mindset and dismisses the proposal.

Meanwhile, Sniff and Scurry have found “Cheese Station N,” and new cheese. But back at Cheese Station C, Hem and Haw are affected by their lack of cheese and blame each other for their problem. Hoping to change, Haw again proposes a search for new cheese. However, Hem is comforted by his old routine and is frightened about the unknown. He knocks the idea again. After a while of being in denial, the humans remain without cheese. One day, having discovered his debilitating fears, Haw begins to chuckle at the situation and stops taking himself so seriously. Realizing he should simply move on, Haw enters the maze, but not before chiseling “If You Do Not Change, You Can Become Extinct” on the wall of Cheese Station C for his friend to ponder.

Still fearful of his trek, Haw jots “What Would You Do If You Weren’t Afraid?” on the wall and, after thinking about that, he begins his venture. Still plagued with worry (perhaps he has waited too long to begin his search…), Haw finds some bits of cheese that nourish him and he is able to continue his search. Haw realizes that the cheese has not suddenly vanished, but has dwindled from continual eating. After a stop at an empty cheese station, Haw begins worrying about the unknown again. Brushing aside his fears, Haw’s new mindset allows him to again enjoy life. He has even begun to smile again! He is realizing that “When you move beyond your fear, you feel free.” After another empty cheese station, Haw decides to go back for Hem with the few bits of new cheese he has managed to find.

Uncompromising, Hem refuses the new cheese, to his friend’s disappointment. With knowledge learned along the way, Haw heads back into the maze. Getting deeper into the maze, inspired by bits of new cheese here and there, Haw leaves a trail of writings on the wall (“The Handwriting On the Wall”). These clarify his own thinking and give him hope that his friend will find aid in them during his search for new cheese. Still traveling, Haw one day comes across Cheese Station N, abundant with cheese, including some varieties that are strange to him, and he realizes he has found what he was looking for. After eating, Haw reflects on his experience. He ponders a return to see his old friend. But Haw decides to let Hem find his own way. Finding the largest wall in Cheese Station N, he writes:

Change Happens
They Keep Moving The Cheese

Anticipate Change
Get Ready For The Cheese To Move

Monitor Change
Smell The Cheese Often So You Know When It Is Getting Old

Adapt To Change Quickly
The Quicker You Let Go Of Old Cheese, The Sooner You Can Enjoy New Cheese

Change
Move With The Cheese

Enjoy Change!
Savor The Adventure And Enjoy The Taste Of New Cheese!

Be Ready To Change Quickly And Enjoy It Again
They Keep Moving The Cheese.

Cautious from past experience, Haw now inspects Cheese Station N daily and explores different parts of the maze regularly to prevent any complacency from setting in. After hearing movement in the maze one day, Haw realizes someone is approaching the station. Unsure, Haw hopes that it is his friend Hem who has found the way.

3 Likes