Advice for beginners

GFSignals

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:idea: We've forced the traders, working at our service, to give some advice for newbies at Forex market. Every trader wrote some tips, whcih he consider to be main for the beginners. We are very glad to post that there in order to help all people, who only start their way at Forex market. Today we post only advice given by only 2 traders, but we'll add some posts in the nearest future. Here's a piece of advice by the author of trading system "Jolly11":

"Of course, one of the main things is learning to do money management, which will help you to avoid losing your deposit and keep you in a good mood for continuation of trading. The next thing you need to do is working out your own trading system based on positive mathematical expectation. It is said: "If you can't predict, how the market is going to move, your prediction is completely wrong". The trading system should be accurate and consistent. Always use stop-loss and take-profit in order not to lose big money and to exit the market with profit. Notice, that it's useless to put stop-loss smaller than 50 pips, because it will be eaten by the trend's movement very soon and you'll be quite disappointed (you see, I use higher stop-loss in my Forex signals).You are also to use all you analyst's skills to find out, when this or that tendency gonna begin. But never open a position in passed wave with the hope of earning some pips. You'd better analyze the market and find out the beginning of a new wave. And don't forget to follow the rules of your trading system, which is very important. Good luck!"

And there you read some advice by one of the traders passing testing period at our service at the moment:

"Firstly, find out, what currency pair "suits" you. Don't try to trade with big amount of pairs - 2 or 3 is enough. Otherwise you'll be lost among different news, parameters and so on. Secondly, don't lose your temper in case of loss. Sometimes you need to close a position with a loss in order not to lose the whole deposit. Thirdly, never take important decisions in a hurry! Fluctuation of the market will always take place, but being hurried can really damage your capital. Also don't forget to take a rest. If you had a loss, it's better to relax for a while and improve your trading system than start trading in a bad mood. And never retreat from your strategy rules. Try not to use more than 5% of your deposit for trading. Remember, that trading with big part of your deposit can easily lead to complete loss of your funds (such mistake is very often done by beginners.). So, keep trading and good luck!"

If you have some common advice for newbies too, you are welcome to post it there. That will be quite convenient and useful for all forum-users.:clap:
 
Say you've got the Dollar and you want to go long, look at all the dollar fx pairs (maybe 20-30) and work out which one the $ is strongest against, then buy that. Same for shorting.
 
Notice, that it's useless to put stop-loss smaller than 50 pips, because it will be eaten by the trend's movement very soon

Eh? Actually I've noticed the opposite. That sometimes it is very useful to have a stop-loss less than 50 pips. And it sounds like this line is saying you should trade against the trend with a large stop-loss. That sounds like pretty dangerous advice for a beginner. These statements need to be qualified, otherwise they are just dangerous.

I believe that there are many people that can trade profitably, but very few who have mastered it and have the experience to give good advice that won't send traders down perilous roads. From what I just read in your advice to beginners, aside from the money management part, those traders don't appear to have developed sufficient skill. One you even say is on a testing period? Neither seem suitable to dispense gems of advice. But everyone is allowed an opinion.

Here is my advice for a beginner:

Verify everything for yourself, and don't trust what other traders who claim success say, as if it is gospel truth. That said, keep your mind open and learn as much as you can. So look at charts, read everything you can, look at the charts again, and develop a trading plan. It doesn't matter that you are a beginner, and you're not sure what is a good plan, your trading plan will change as you develop. But you should still write one. Then go and demo trade it for 1 month, perhaps longer. This will help to give you the skills to act appropriately with your plan, and teach you some important money management principles. Your trading plan ideas may have changed significantly at the end of the month. You will have better ideas for entry and/or exit and will want to incorporate these. Repeat the above, demo trade the new plan for 1 month exactly as you planned it. Repeat this until you have a plan that you are confident in, and that you can actually trade. Then once you show yourself to be profitable on demo, you can start trading for real money (but keep the stakes very low in the beginning), because next you will be facing the psychological aspects, and depending on your mindset, possibly dealing with those for some time. All the time, keep taking note of what you are doing and why. What went wrong and why. What went right and why. Try to improve every area of your trading, this includes risk management, psychology, entry and exit timing, stop loss positioning, and anything else that has an outright effect on your trading, because it will not be easy. Give yourself every chance.
 
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