GDoetting Started with Forex
Understand the Basics
TO “BUY” a pair means to buy the first trade in the pair and sell the second. This is sometimes called going Long.
So to BUY or go Long on XAGUSD, I would be looking for XAG (silver) to get stronger and USD (Us Dollar to get weaker).
To “SELL” a pair means to sell the first trade in the pair and buy the second or go SHORT. So if I am selling XAGUSD, I am looking for silver to get weaker and the dollar (USD) to get stronger.
STOP LOSS is a point you mark in a trade to protect your margin, this means if the pair goes the wrong way it will not wipe out your account – you’ll make a loss, but you won’t lose your account.
TAKE PROFIT (TP) is a mark you make in the trade so the trade will close and you will collect profits at that point. If it’s too high, you may find the trade turns against you even if it was in profit.
MARGIN – be careful not to use all your margin, some brokers will close all your trades (even if they are winning) if you over expose your account. So stick to one trade at once until you know what you are doing.
LEVERAGE – As tempting as it is to trade 1:500, if you lose it will wipe your account out fast. So I would suggest sticking to 1:1 trades to start with.
Use a good platform.
Personally I really like MetaTrader 4, although some brokers have good web-based offerings (BelforFX have both and you can use both with one account). Meta Trader 4 takes some getting used to, but it’s worth it.
You need a good trading system
1. You need to understand HOW the markets work.
2. You need to answer the following questions
a. When is a good time to trade, is it NOW?
b. What should be the direction of my trade?
c. What is my stop loss?
d. What is my take profit?
e. Can I afford to lose the risk I am placing on this trade?
f. Is the Risk to Reward Ratio right for this trade?
If you cannot answer these questions then you are a gambler not a trader.
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3. You need to understand how news affects the markets. T
Half the Battle is with Your EMOTIONS
Psychology is so important to trading. If you hate losing you will hate trading. Losing trades is part of trading. If you are losing too many trades. There is something wrong with your trading system (you DO have a trading system don’t you?)
Do not Listen to the Prophets of the Forex, Work it out yourself
I am very wary of Anyone saying “oh the market is going to do this”, how do they know? The truth is NO ONE KNOWS where the markets are going, we can only look for setups where we win more than we lose, be real with yourself about trading, minimise your losses and maximise your profits!
Don’t Give Up
“I’m gonna work this thing till it works!”
Change and Adjust
Change and adjust your trading style to make it better, NEVER stop learning, I’m always looking at new trading systems for ideas even though I have developed my own system!
Treat this like a business, don’t trade Buying dollars because you like dollars, that is not a reason to trade.
STROBOT doesn’t require you to do anything except watch he is completely automated.