Forex trading for a beginner
Discussion
robinessex said:
Shaoxter said:
FX is the most macro of all the markets, meaning that you need to keep up to date with all the news and data releases. Even then a random political event or war could throw your strategy out of the window.
Your friend was just day trading, yes some people do make money out of it but for every one of those people there's 2 people who've lost all their money.
You're better off trying your luck at online poker to be honest.
I can't bloody play poker either !!!!Your friend was just day trading, yes some people do make money out of it but for every one of those people there's 2 people who've lost all their money.
You're better off trying your luck at online poker to be honest.
robinessex said:
The reason I ask, is some years age I sat next to a guy where I was working who did Forex trading on his laptop during the day. He ONLY traded the dollar against the pound. He certainly made a steady profit, as he showed me his account. He started with £25k. Had £85k a year later. His 'system' was simple. Log on at about 9pm, and watch the £/$ trades for about an hour. If/when he was 'happy', he'd buy as appropriate. If the rate was moving pretty steadily in any direction, he'd gear himself quite high. If the market was bouncy, gear low. Then watch. If he was making a profit, wait for a while, then sell. Don't get greedy or ambitious. If he was loosing, sell quick. Start again tomorrow.
Try this. Sit down tomorrow, and find a live-ish USD/GBP currency feed. Take a guess at where it will be at the end of the day. Now work out why you guessed as you did.
Then watch the movement over the day. Were you right or wrong? If you were right, were you right for the reasons that you came up with at the end of the day.
Right for the right reasons = well done.
Right for the wrong reasons = lucky guess. You might as well try heads or tails.
Wrong = potentially expensive day.
Your mate, if he was actually doing what he said he was doing, was simply watching and reacting - one step behind the market, not trying to anticipate it - and assuming that currency movements have the agility of an ocean going cruise liner. First sharp adverse currency movement and he'd have been burnt.
robinessex said:
I seem to remember that he said he could set a 'loss limit' so if the market went against him, he postion was shut down. That way he knew he couldn't take a big hit.
You only get to close out at the stop loss level if the market trades at the level while going against him. If the market gaps then the losses can go well above the limit. Hence the disclaimer "you can potentially lose more than your deposit" on spread betting sites.A great example today: EUR/USD gapped a huge amount when the ECB unexpectedly announced they cut rates. If you were long EUR/USD and set a close stop loss expecting only a small loss at worst, you would have been well and truly burnt.
Shaoxter said:
FX is the most macro of all the markets, meaning that you need to keep up to date with all the news and data releases. Even then a random political event or war could throw your strategy out of the window.
Even non-random events (Fed/BoE/ECB etc) have the potential to hurt someone with no knowledge of the markets if they don't know when they take place and/or what wider expectations are.Oh, and (if you're "up") don't trust your demo account performance. Your decision making *will* be affected by the fact that you've got no skin in the game.
If you follow any sports - how about sports betting? At least this could be an area you know/enjoy?
Personally, nothing makes a football match more exciting than having a few quid on it, and if I make some money while doing it all the better. I ended last season with a £1.5k profit from bets not larger than £20, I do spend a fair amount of time researching though, team news, injuries, potential lineups (picture the ladbrokes tv advert with the couple sat in a cafe, woman talking, guy not listening thinking about odds/stats etc - my OH doesn't always find this amusing
)
Personally, nothing makes a football match more exciting than having a few quid on it, and if I make some money while doing it all the better. I ended last season with a £1.5k profit from bets not larger than £20, I do spend a fair amount of time researching though, team news, injuries, potential lineups (picture the ladbrokes tv advert with the couple sat in a cafe, woman talking, guy not listening thinking about odds/stats etc - my OH doesn't always find this amusing
)
k things up just like when you trade FX.The two people I have met that have been successul traders were both a bit "aspergers". As in quite insular and awkward around people.
One is in Forex the other runs a hugeley succesful hedge fund, one of the top in the world.
So unless you are a bit challenged like that I wouldn't bother!
One is in Forex the other runs a hugeley succesful hedge fund, one of the top in the world.
So unless you are a bit challenged like that I wouldn't bother!
You can trade chart forms if that side interest you. You dont necessarily need to know the fundamentals and once you've learnt to read charts you can trade pretty much anything which is liquid enough. Never think its easy, or infallible though, a chart can only give you an idea of what might happen, not what will happen.
robinessex said:
Guys. Can the ‘man in the street’, (that’s me), without any knowledge of the financial markets (that’s me again) make (some) money from Forex trading ? I’ve seen these on the net, and obviously they ALL imply you can make money. My mate in the pub (we all have one, don’t we ) reckons that if you keep it simple, say only speculate with the pound, dollar and euro, so one doesn’t get to confused, stop when/if you make a small profit each day, and shut shop and go (back) down the pub if you make a loss, you can come out smiling. Comments from the PH’ers who actually do this for a living would be appreciated. Oh, nearly forgot. The target is to make enough to buy a Lamborghini Aventador after a year !!!! Go to have an objective !!
At least you have a target (a Lambo) most people don't even have that.However, to earn that much profit you need to start off with quite a hefty sum and risk a fair amount of it as well.
To enter into any endevour with, as you put it, "without any knowledge" is off the wall crazy, but of course this is PH
This year there have been wild swings in the Dollar/Sterling/Euro relationships which is why I guess you have given this some thought.
I suppose you could buy Roubles
(and hope our xxxxxxx President forgets about Ukraine whilst struggling with ISIS)
Edited by jeff m2 on Wednesday 10th September 18:06
Well, I just had to get a trading demo, and have a go
https://trade.plus500.com/Trade
I decided I was only interested, in the £ against the $ and the €. I sat for few days, just watching the rates changing against each other, and made 2 observations. If you follow the long term trend, over a few days, the + & - balance out, so basically, you can make a profit, but it ain't going to be a big one. Just steady. At the other end, trading over very short time scale, say as short as 1 minute, much larger changes would happen. The down side is, they are virtually unpredictable, and obviously don't correspond to the long term changes. So it's a gamble. I had £20,000 in my dummy demo account, and I traded with £500,000. I started actually trading with my demo account yesterday morning ( Wed 24th Sept). I only did the £ against the $. I obviously did a few more risky moves that I’d probably not do if it was real money, but that’s what a demo account is for. Anyway, as at the moment 14:13 on Thurs 25, I’m £1,844 UP. I’m under no illusion that by tonight, I could be negative, but I’m trying to develop a system or method. Here’s hoping !!!
Guys, am I doing anything wrong ?
https://trade.plus500.com/Trade
I decided I was only interested, in the £ against the $ and the €. I sat for few days, just watching the rates changing against each other, and made 2 observations. If you follow the long term trend, over a few days, the + & - balance out, so basically, you can make a profit, but it ain't going to be a big one. Just steady. At the other end, trading over very short time scale, say as short as 1 minute, much larger changes would happen. The down side is, they are virtually unpredictable, and obviously don't correspond to the long term changes. So it's a gamble. I had £20,000 in my dummy demo account, and I traded with £500,000. I started actually trading with my demo account yesterday morning ( Wed 24th Sept). I only did the £ against the $. I obviously did a few more risky moves that I’d probably not do if it was real money, but that’s what a demo account is for. Anyway, as at the moment 14:13 on Thurs 25, I’m £1,844 UP. I’m under no illusion that by tonight, I could be negative, but I’m trying to develop a system or method. Here’s hoping !!!
Guys, am I doing anything wrong ?
Dan_1981 said:
What's your profit as a % of your stake?
If you scale it down to what you'll actually be playing with - is it worth it?
4.5% per day. If/when I do it for real, my investment will be circa £1000. Don't tell the wife tho'........... She thinks I'm on the computer looking at porn !!!!!!!!!!!If you scale it down to what you'll actually be playing with - is it worth it?
Edited by robinessex on Thursday 25th September 14:42
Where did you get the 4.5% profit figure from?
The average daily change on Forex is around 0.5%.
So if you invested/risked £1000, which would mean around 0.06£ per point only(!) for GBP/USD, you would on AVERAGE be up/down by £5 with just 1 trade.
You practically need some leverage, but beware this could wipe you if it's too large.
The average daily change on Forex is around 0.5%.
So if you invested/risked £1000, which would mean around 0.06£ per point only(!) for GBP/USD, you would on AVERAGE be up/down by £5 with just 1 trade.
You practically need some leverage, but beware this could wipe you if it's too large.
Edited by chris7676 on 26/09
Edited by chris7676 on Friday 26th September 10:09
robinessex said:
Dan_1981 said:
What's your profit as a % of your stake?
If you scale it down to what you'll actually be playing with - is it worth it?
4.5% per day. If/when I do it for real, my investment will be circa £1000. Don't tell the wife tho'........... She thinks I'm on the computer looking at porn !!!!!!!!!!!If you scale it down to what you'll actually be playing with - is it worth it?
Gassing Station | Finance | Top of Page | What's New | My Stuff