I am learning the pmbasics of forex and a friend of mine operate at the future market with tape reading. I would like to know if tape reading works well woth forex or if it is better to me focuses on other techniques?
Sorry for my bad english hope u guys can help me!
Is your friend making consistent returns? Just do what makes you money. Simple. Unless you’re trading because you are ‘passionate’ about trading. Lol in that case, do what you want. Nothing I say will matter.
Hi Alex,
All techniques can work if you have a tested trading system and use correct risk and reward ratio’s. Tape-reading can help give you information about the direction of the market and potential resistance or support levels.
Due to the decentralized nature of forex trading, it can be difficult to see where large sell and buy orders are placed in the forex ecosystems. So unless you are going to use highly advanced algorithms I think you would be better of looking at price action if that is your niche.
Like always, there is no single system that works best all the time. Test different methods and find out what suits your trading style.
What is tape reading? Sorry to ask, newbie here.
Thabk u so much!
I thinkI will try price action first!!
Do u reccomend some books beside the babypips lessons?
Tape reading is a different analysis method. I am afraid to try to go deeper, because I am just a student at that time. But my friend can make some consistency profits with these in the future market!
technical analysis of the financial markets by John J. Murphy.
However, I found back testing strategies to historical data and demo trading with the principles you learned to be most effective as a way of learning.
This can be done every time you learn a new technique and also helps reinforcing it.
Keep in mind that there is no technique or method that works everytime or for everyone. manage your risk/reward ratio and make sure you are confident of the trades you enter. Don’t let your emotions get the better of you.
Thank u!
What is the difference between backtesting and try the strategy in a demo account?
Now I am trying to learn the concepts of the forex market but it is difficult to know the right time to start to backtesting and trade in a demo account. I feel that I dont know a lot of the market to start operate. When u think I can start to backtesting and trading in a demo account?
Sorry for all these questions and thank u for helping me!
Backtesting: checking what would have happend if you had used your strategy in the past. You can look at the historical date of the eur/usd price and see when you, according to your strategy would have bought/sold/stopped/taken profit. This can help you determine the strenghths and weaknesses of your strategy and might help point out in what market conditions it works best. (Remember: past performance doesn’t guarantee future results).
Demo trading: most brokers offer demo (demonstration) accounts. Instead of trading with actual money. You trade with fake money (like you do when you play monopoly). If you do this for a longer period of time you can also get an idea of how your strategy is working out. Let’s say you start with a 100k demo account. After 6 months you might have 110k or 90k or still a 100k. This gives you an idea of the profitability of your system too.
Wow so much thank U again!!
So it will be goo to combine bouth right? Like do some backtesting to see if some strategy works and when to use it(gives u a faster overview) and after try to do some demo trading to see if it really works?
Thanks for your reply. Good luck with that technique. I hope it will work for you.
Just found an old thread on this topic: Tape reading and forex? Not sure if you’ve read that one.
Hey thank U!! =]]
It was a pretty short one but Clint always provides real thoughtful and detailed responses.