Fresh on the scene

[thundertrader 10]

Hello everyone

I am very new to forex trading (trading in general) and trying to find my way around

I have been trading on a demo account dealbook 360; I have not made any live trades as yet.

I am trying to read material in hope of educating my self

 

I bought "Trading in the Zone by Mark Douglas" does anybody recommend this book, will it help me to become a great trader?

 

Which technical indicator goes well with the MACD?

 

I can trade for 3 hours a day, which time frame is best for me? and remember I have no real trading knowledge so I Know nothing about fundamental trading and next to nothing about technical analysis

 

I appreciate whatever feedback I get

[torero 10]

Hi Thunder,

 

Mark Douglas book is a great education, well worth the money. The book gives you steps to test the profitability of the system tying with your psychological conflict, in addition to understanding and dealing with the mental aspects of trading.

 

MACD is a trend-following indicators. It's usually recommended to use with an oscillator indicators such as RSI, Stochastics, and Momentum and among others. Test them out thoroughly.

 

As for timeframes, verify how much risk you're taking each trade (loss in $), then measure that with the range of the size of range from high to low (from pivot high to pivots low). Say if you're trading 60 min, the bar is 1.3300 low to 1.3400 high, your risk is 100 pips. If you can afford to lose that per trade, then that timeframe might be it. But this is an example. I use several bars combine to make the high/low range to measure my risk and timeframe. Remember that the higher the timeframe, the more reliable the signals and less likely for you to overtrade. Good luck. Ask away if you have more questions.

[PYenner 10]

Hi Thunder

 

Tried Dealbook360 demo platform and did not like it.

Also did not like the fact that the company won an award for having 100% profit increases for 6 years running, that used to be their customers money.

 

Much prefer MTB4 platform. Two places with unlimited MTB4 demos are LLC and Alpari. Not recommending either. LLC drops market feed and Alpari recently has frequent requotes.

 

Oanda used to be a better place to start trading, more flexible "lot" sizes.

Their charts are not good compared to MTB4 though.

 

Increasingly people seem to be recommending avoiding traditional "bucketshops" and going for Direct Access ECN where there is no dealing desk to play dirty tricks on you and no conflict of interest.

Bucketshops win when you lose, that makes them dangerous.

 

There are not many ECNs yet, EFx is one.

Do check them out and find one with a demo platform.

 

I rely on the charts on an MBT4 demo platform regardless of which account I am trading (because I use many charts).

 

Don't be in a hurry to trade live, there is a lot to learn, make your mistakes with play money first.

 

London start onwards seems to offer best trading, 0800GMT to 1600, sometimes 2000.

[waveslider 10]

Find a simulator, practice, practice, practice. Then trade really really small. You are beginning an education that can take longer than becoming a doctor, and not at all guaranteed. You may not make a profit for years. Sure you wouldn't rather be a doctor?

[Guest cooter]

Hi Thunder

 

Tried Dealbook360 demo platform and did not like it.

Also did not like the fact that the company won an award for having 100% profit increases for 6 years running, that used to be their customers money.

 

Much prefer MTB4 platform. Two places with unlimited MTB4 demos are LLC and Alpari. Not recommending either. LLC drops market feed and Alpari recently has frequent requotes.

 

Oanda used to be a better place to start trading, more flexible "lot" sizes.

Their charts are not good compared to MTB4 though.

 

Increasingly people seem to be recommending avoiding traditional "bucketshops" and going for Direct Access ECN where there is no dealing desk to play dirty tricks on you and no conflict of interest.

Bucketshops win when you lose, that makes them dangerous.

 

There are not many ECNs yet, EFx is one.

Do check them out and find one with a demo platform.

 

I rely on the charts on an MBT4 demo platform regardless of which account I am trading (because I use many charts).

 

Don't be in a hurry to trade live, there is a lot to learn, make your mistakes with play money first.

 

London start onwards seems to offer best trading, 0800GMT to 1600, sometimes 2000.

 

PYenner,

In your posts you keep talking about this MTB4 or MBT4 platform that we've never heard of before. (Sort of like your PY shorthand for GBPJPY).

 

A Google search yields nothing related to Forex as well.

 

Just so that we all understand your unique lingo... Are you actually talking about the MetaTrader4 platform for forex/CFD bucketshops?

[Dogpile 10]

I heard Market Wizard Linda Rashke say recently that for an experienced pit trader, it takes 18 months of full-time trading before most make much money in front of their screens trading electronically. I would tend to agree. Trade small for the first 2 years if you have no experience. After 18 months to 2 years, you will look back and realize how little you really knew after your first 12 months.

[Soultrader 12]

I heard Market Wizard Linda Rashke say recently that for an experienced pit trader, it takes 18 months of full-time trading before most make much money in front of their screens trading electronically. I would tend to agree. Trade small for the first 2 years if you have no experience. After 18 months to 2 years, you will look back and realize how little you really knew after your first 12 months.

 

I completely agree. 2 years should be the minimum educational period for trading. If you can look back after 2 years and laugh at all your stupid mistakes, youre on the right track. If youre still using same methods from day one... then you may have to think of a new career.

 

Btw, welcome aboard thundertrader. It says you are from Jamaica. Very nice!

[cowpip 10]

Great responses guys! There's not much left to add.

 

Don't rush into going with cash. That's where most new people make their biggest mistakes. They get attracted to the profit potential, make a few dozen trades that work out real well for them on a demo (demo trading is what we call "paper trading"), convince themselves that they can make big bucks, load their account with a good chunk of their savings, then discover that they didn't really know how to trade after all and end up with very little in their account over the next 6 months or less.

 

This is a BUSINESS just like any other business. It involves risk, expense (losses), and profit (wins). Until you can prove that you can employ sensible strategies that will PRESERVE YOUR CAPITAL, you have no business starting this particular business. It is a heartless and (for most people) difficult journey, but is well worth the effort (and then some) if you succeed.

 

I was always taught by some very wise people who have been trading for decades, that there are really only two things a good trader needs to master: PATIENCE and DISCIPLINE!!! Patience to take only the highest quality trades (with the lowest risk and best reward ratio) and ignore the rest without grieving that you missed the boat. And Discipline to follow your own individually proven strategy (which requires time and patience to develop) with built-in money-management that will help you to PRESERVE YOUR CAPITAL.

 

For those starting out, aside from the end-goal of achieving Patience and Discipline, the #1 MOST IMPORTANT thing you can do is to PRESERVE YOUR CAPITAL!!! Do everything in your power to PRESERVE YOUR CAPITAL, or you will very quickly and absolutely (without question) become one of the many in the world who will claim that it is not possible to make a profit trading.

 

You will probably at first rely on others to help you develop a trading strategy. You will likely discover that many of those strategies don't seem to work for you (and it may frustrate you). In time, you will learn that successful trading is something that can't be shared easily. The best mentors will tell you that you have to find your own groove... your own set of trading criteria that fits your own personality and your own personal risk-profile. What is good for one person is not necessarily good for you (and in this case, most likely is not). But it is important to listen to everyone - and at first, even try other peoples strategies, keeping in mind that the SIMPLEST STRATEGIES ARE OFTEN THE MOST SUCCESSFUL!

Take your time... consider this a longer-term education. As odd as it sounds, you will discover that YOU are your own worst enemy. In the process of learning this business, you will learn a great deal about yourself, and about how your brain works against you. Mark Douglas's book is a great book - but I think it has greater meaning and worth to those who have already established themselves as mediocre or better traders. You may think what he says is a bunch of hogwash - but it isn't. It really isn't. If you don't find the book that good right now, hold onto it and read it again next year once you have had more experience in this business. I think you'll find that gold grows on its pages as you continue to gain more experience.

 

Best of luck to you!

[TheBramble 10]

thunder, I'm with waveslider on this. Practise - absolutely. Small stakes - no, not for 6 months. If you have absolutely no FA or TA and you're picking FX which has no Volume you're going to be stretching - big time.

 

Work on a couple of setups and perfect them in demo mode. If you can do that without resorting to 'needing' to use real money for 6 months you're probably made of real trader stuff rathen than just dumb gambler material.

 

Then, start real small using the same setups and the same execution patterns. Do not deviate. Stay at that same level of staking for another 6 months using just the two or so setups you have perfected.

 

If after a year you're in consistent profit and sticking to your rules - THEN and only then do you go for your max stake, which in my book would be no more than 1% of max cap per trade at risk.

 

The biggest problem will not be finding the setups that match you style and trading capability (3 hours/day) - it'll be not putting real money on the line for 6 months. And not uping the ante when you do. You think you can do it, but most can't.

 

Good luck.

[pipMonster 10]

I have to agree with both Cowpip and Bramble. Without a doubt patience, discipline, practice and solid money management skills are cornerstones of successful trading.

 

One thing I believe needs to be mentioned and that is trading through a trustworthy broker. A broker is not expected be your friend, but they shouldn't be thought of as another trap for inexperienced traders. There are stories too numerous to mention regarding duplicitous brokers who trade against you or subtly add/subtract a few pips near levels where they know many of their clients have placed stops. There are other brokers who will balance their lopsided books by severely widening the spread, sometimes to 25 pips, just before important data releases thus triggering any nearby stops and knocking the trader out of what might normally have been a profitable position. I would recommend using an ECN broker. The only drawback I've found to using an ECN broker is the trader needs to be keenly aware of over trading. Because ECN's charge a commission and not a spread, the commissions can eat your account quickly.

 

Cowpip has it right that keeping your strategy simple is the way to go. Too many indicators and lines clutter up your screen and your mind leading to analysis paralysis, or indecision. Try starting off with the tried and true: Fib levels, Round numbers(50 & 00), Daily & Weekly pivots, candle patterns that give clues to the momentum of price. The best trades start as failures of price to continue through a strong level of support or resistance. Always use a top down analysis which means to start at the wider time frames and move in when doing your Technical Analysis.

 

Good trading to you!

[BlowFish 10]

Your ahead of the game finding your way here. There are many BS forums around with all sorts of hucksters and snake oil salesmen waiting to snare the unwary.

 

In some ways I am envious, must be great to be starting off with a blank slate. Of course as others have pointed out the flipside is you have a lot of work ahead of you. The thing to do is to get a solid set of beliefs (preferably before you damage yourself in the markets). Some say that the damage is all part of the process, I dont think that is the case. Douglas tackles a couple of important beliefs. Reminisances of a Stock operator will stand you in good stead too. Thats probably one to read a dozen times.

 

There is lot of good imformation about but there is a lot of dubious stuff too. Again until you have a good grasp of market 'reality' and a solid belief system to protect you there is a distinct possibility you may get sidelined by some of this stuff. At best it will simply waste some time at worse it may plant seeds that are not based on market 'reality'. Be really careful about which paths you take - of course this is a bit of a catch 22 as just starting out are in no position to judge.

 

On the subject of indicators understand exactly how they are calculated, exactly what they are designed to show and hence how they 'work'. I'm loathe to give specific advice but indicators are simply tools. Decide what you want to achieve then pick the indicator. I threw all mine out years ago so probably am not the best to comment. I would say that most are derivatives of price so I decided to focus on that (price) instead. You might want to learn some of the fundamentals of 'price action' I think I can safely say that would not be time wasted.

 

There are several key elements to trading the 'technicals' are probably least important ...but Im all typed out for now.

 

Cheers.

[Guest cooter]

Your ahead of the game finding your way here. There are many BS forums around with all sorts of hucksters and snake oil salesmen waiting to snare the unwary.

There's at least one of those already here on this forum, so be warned.

 

That's all I'll say on the subject, although I probably could go on to infinnity!

[PYenner 10]

Cooter

 

Yes, MetaTrader4 for bucketshops.

There is some hope that this may become a defacto standard platform,

or at least provide newcomers with something common to judge inhouse platforms against and perhaps encourage "top" outfits like Dell and CMC to improve their user-unfriendly and far from "transparent" trading platforms.

 

Anything that slows the sharks down gets my vote.

 

I use 2 letter codes for the major pairs because I am trading all 10 at a time in demo, just makes no sense to use 6 letter codes when 4 of the letters are redundant within the majors. There is some method in the madness ok?

[MidKnight 12]

There are not many ECNs yet, EFx is one.

Do check them out and find one with a demo platform.

 

IB have a great ECN style offering. I personally will stay well clear of MBTrading after reading a thread on ET with which the president of MBTrading (at least he said he was the president) was replying to posts. IB have had an ECN model for over 2 years now. I highly recommend them.

 

Best regards,

MK

[jperl 11]

thundertrader,

I believe in shock therapy for learning how to trade. First, ignore everything you've read on this thread. Second don't bother reading Mark Douglas' book. Third, you should start trading immediately with real money using whatever method suits your fancy.

After about a year, if you are profitable, keep it up. However, if you are like most traders you will have lost half your capital. At that point, if you still believe that you can become a profitable trader, then come back and carefully reread this thread and start reading Mark Douglas' book.

 

JERRY

[BlowFish 10]

I'm not sure I can buy into that Jerry. Depending on your beliefs, attachments to money and a variety of other things you could do pretty serious damage to the psyche. There are not many endeavours that don't benefit from a little bit of basic instruction before jumping in. There are many that are likely to end up fatal. When you 'come back' do you think it is easier having wiped out?

 

There's an old adage about a person not being a great horesewoman until they have been thrown (thrown as opposed to falling off). Getting up without any instruction and trying to get yourself thrown will not make you a great rider when you get back in the saddle again - that's if you even summon up the courage.

 

Cheers.

[PYenner 10]

It made me smile.

There is some truth in it, a demo account does not prepare you for the real thing. There is a whole lot of new psycho stuff goes on when you first trade live. It is so easy to spook yourself and feel like the world is turning upside down. Reliance on a tested plan can be the only solid ground you can find to stand on. It can be a lonely and testing experience. Thats where forums like this can be a sanity saver.

[jperl 11]

You need to read my post between the lines blowfish. Of course I don't believe in shock therapy; but no matter how many times you will tell newbies to practice before they leap and that they are going to lose half their capital otherwise, it's not likely they will listen. The lure of the markets are like the sirens on the rocky coast.

JERRY

[BlowFish 10]

Hi jerry,

 

I did have an inkling where you where coming from . Actually there are certainly a whole bunch of ducks that must line up before making it. Dealing with losing trades and equity draw down is perhaps one of the toughest 'ducks'.

 

In support of your view it is surprising how many of the market wizards reported wiping out before making it (Schwager). Actually what is more surprising (and kind of scary) is how many have subsequently wiped out (since the books where published).

 

Cheers.

[Reaver 10]

I completely agree. 2 years should be the minimum educational period for trading. If you can look back after 2 years and laugh at all your stupid mistakes, youre on the right track. If youre still using same methods from day one... then you may have to think of a new career.

 

Btw, welcome aboard thundertrader. It says you are from Jamaica. Very nice!

 

 

James is right. Some people get it (or at least think they do) after 6 months to a year...but really just like in anything there is no replacing experience. Two years is a good minimum for building the intuition and self-knowledge that is required. Like Soul said- it's always amusing to look back on stupid mistakes and laugh at yourself and realize how much you have learned since then.

 

Also, FWIW I would recommend trading on daily charts. But there may be better ideas from others. I just think that having three hours a day would alow for some very good research on dailies without having to be glued to the screen...

 

Even if you want to day trade one day I would still recommend starting on dailies to get a grip on the manner of the markets. Just like we used to say in the military when transitioning from running drills dry to going hot...slow is smooth, smooth is fast. Remember that.