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» Beginners ForumThinking you might want to try trading? Want to ask a question but worried about saying something silly on the main boards? This is the place where you can take the first few steps in safety.
I'm very new to this, so new in fact that I don't even know the basics behind this madness.
I am trying to learn the system and practice on a demo account until two things happen for me: (a) I am in a financial position where I have some excess of money that I can use at my leisure, and (b) after I play around with virtual equity long enough to develop the skills required for success in the market.
I was interested in the stock market and other methods which "let your money work for you" throughout the later years of my highschool "career". I discovered currency trading through an aquaintence and from what he told me I think this would be a suitable method to make some spare change at the side (until I obtain the skills to make it full time ).
These are some questions that are very basic (my understanding of this system, or economics in general, is very poor):
Currency USD/CAD, what am I buying exactly? US dollars, which I'm playing against CAD? What do I do if I think the CAD will go up? I didn't see any CAD/USD options in the platform I'm using (demo acct), so I assume my understanding of how this works is off entirely. Could you clear this up for me?
I went to www.rbc.com to see what they forecast for trading overnight. They predict a "corrective phase for USD/CAD"..."support between 1.2035/1.1990 is expected to attract buying pressure overnight in this regard, projecting a move toward resistance at 1.2121/62." So without quite knowing what this meant I invested 100k of fake money in the USD/CAD. If someone could help me out that would be great.
There will undoubtly be more questions as I learn more, but in the mean time this is all I have. Any advice, comments, warnings, lectures, or help directly related to the content of my posting or just in general would be greatly appreciated. Thanks in advance.
Being in your position a few years ago, it's best that you read as much info on forex that you can find. Books I found of great knowledge was "A Forex Primer" by Shani Shamah and "How charts can help you in the stock market" by William L. Jiler. Both were great. Of course though, you will ultimately learn when you are trading hands on, losing money is the best teacher in the world.
Answering your question about the USD/CAD, if you believe the USD will climb you click buy. If you think the CAD will climb you click sell, this will short the USD. This is a VERY basic explaination and looking around will give you more indepth sights into the currency pairs etc. A good link is www.forex.com, go to the "basics" area, I think it might be called Forex 101 (?) and also www.forexnews.com, listen to the audio commentary, great to learn about the effects of things on the currency markets and upcoming releases and moves.
It took me about a year till I traded live and before that I traded shares. My shares knowledge assisted me with a few things in the forex world but I still find forex more stimulating and exciting, being on an international level and involving geopolitical situations etc. Love it.
As I said, read, read, read and... read! Money doesn't come out of thin air, though sometimes it seems that way. Be prepared to learn as much as you can. Trade less and be patient, having under 4 trades a week doesn't make you any less a trader, if each trade works, it makes you a profitable one! You seem to be on the right track by mentioning trading money you won't need. Another thing you must remember is to be unemotionally attached to your trade, this is the hardest thing you will EVER encounter in trading! You won't understand this now, you'll only understand what I mean (and others will agree) when you start with real money on a live account. Enter with a plan and stick with it. Always use a stop loss! Anyway enough of my rantings, I tried to start this post with a structured look but it seems to have gotten rather scattered lol, see what happens when you watching the markets... you don't go to sleep!
I'll go to the library soon and look for some books (including the ones you recommended).
I think I understand what you mean by the emotion involved . I can see myself waiting a little too long for that sour trade to turn around, or doing the exact opposite. Ah the many woes of greed and egotism... I plan on having a strong plan which I will follow methodically before I start each trade. Of course that's easier said than done, but I hope to develop the discipline required as I go along.
And your reply was structured just fine , thanks again, see ya around.
(P.S. - that blind trade I mentioned in my original post made me 250+ in virtual money )
Re: A brief introduction and a few basic questions.
Quote:
Originally posted by highpitched I'm very new to this, so new in fact that I don't even know the basics behind this madness.
I am trying to learn the system and practice on a demo account until two things happen for me: (a) I am in a financial position where I have some excess of money that I can use at my leisure, and (b) after I play around with virtual equity long enough to develop the skills required for success in the market.
I was interested in the stock market and other methods which "let your money work for you" throughout the later years of my highschool "career". I discovered currency trading through an aquaintence and from what he told me I think this would be a suitable method to make some spare change at the side (until I obtain the skills to make it full time ).
These are some questions that are very basic (my understanding of this system, or economics in general, is very poor):
Currency USD/CAD, what am I buying exactly? US dollars, which I'm playing against CAD? What do I do if I think the CAD will go up? I didn't see any CAD/USD options in the platform I'm using (demo acct), so I assume my understanding of how this works is off entirely. Could you clear this up for me?
I went to www.rbc.com to see what they forecast for trading overnight. They predict a "corrective phase for USD/CAD"..."support between 1.2035/1.1990 is expected to attract buying pressure overnight in this regard, projecting a move toward resistance at 1.2121/62." So without quite knowing what this meant I invested 100k of fake money in the USD/CAD. If someone could help me out that would be great.
There will undoubtly be more questions as I learn more, but in the mean time this is all I have. Any advice, comments, warnings, lectures, or help directly related to the content of my posting or just in general would be greatly appreciated. Thanks in advance.
Hey highpitched
You *should* consider trading forex for a career in itself.
That is, if you want to get rich.
"I don't even know the basics behind this madness."
That's no problem. One thing you need to know now though and never forget.
It is not that it is "madness" most the time, it is "speculation" or, trades based on speculation. These trades can move the market into your favor or away from you... 100s of points.
Learn about and master your knowledge of speculation and you will be able to advance your trading.
"Currency USD/CAD, what am I buying exactly? US dollars, which I'm playing against CAD? What do I do if I think the CAD will go up? I didn't see any CAD/USD options in the platform I'm using (demo acct), so I assume my understanding of how this works is off entirely. Could you clear this up for me?"
What has been said in relation to your question in previous posts is correct.
However another way of looking at it, which is especially true since in forex you work on margin, is that you are borrowing from a "bank" a certain amount of a currency, which you immediately lend to another "bank" in a second currency. When you "close" your trade, you effectively call you loan to one bank to repay the other, in the process benefitting (if you make a profit) from the relative movement of value between the two currencies. Should the movement go against you, you need make up the shortfall when "repaying" the original lender and that is you loss.
I let you workout which of the two currencies you are "borrowing" and which you are "lending". If you get that one right, you will probably never forget and you will have a good understanding of the fundamental mechanism of forex trading.
Re: A brief introduction and a few basic questions.
Some very good advice in this thread. When I first began trading on my demo account through fxcm.com, I would open 30 positions a day and because of one piece of information I had wrong I lost money on almost every trade. I misread instructions on using the RSI and waited for the RSI to move north of 70 to buy and south of 30 to sell. Well, it is the complete opposite and I learned to pay attention to details. Details and virtual trading are a must if you want to cut down on your losing trades. I currently use the MAC/D, RSI, Stochastic slow, ADX, Bollinger bands and the Parabolic SAR along with Japanese candlesticks to confirm whether or not to open a position. I have learned that it will take many hours into the early morning hours to get a grip on such a huge amount of information. Recently my wife asked me why I am studying the charts when the market is closed, and the charts are not moving in real time. So, as you can see you must become infected with the desire to learn this exciting and financially rewarding business. It is a business, so treat it as it is your own. Try to develop a strategy and use it the same way every time you trade. For motivation I think about what my wife goes through every day at her job. When we first married in 1991 I made a lot of promises to her, I had a lot of things going for me. To see her up and down on ladders every day, her hands raw from handling boxes, limping up the stairs to our apartment because her feet hurt so much. This is my motivation to study my as* off and saturate myself with Forex, Forex, Forex. Sure, she could find another job, but the way the economy is right now it is best to hold on to something bad than not have a paycheck. I have given up nearly everything to study this market and have only touched the surface. I am paying down my debt and at the same time becoming an intelligent trader. Letting the market come to me. So, work hard and the rewards will follow. Do not get frustrated when most of your trades early on go sour. It happens, deal with it and move on. Best of luck to you and everyone else in this forum. EJM
Last edited by FOREXFORKAREN; 05-06-2005 at 11:09.
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. I can see myself waiting a little too long for that sour trade to turn around, or doing the exact opposite. Ah the many woes of greed and egotism... I plan on having a strong plan which I will follow methodically before I start each trade. Of course that's easier said than done, but I hope to develop the discipline required as I go along.
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