Eight important questions

[epic767]

As a newbie, I have eight questions about Forex and it would really help to get those answered and I will definately help you as best as I can in the future and you dont have to answer all questions, Im happy if you can just answer one:

1Do anyone know a good atomized system or preferably an independent site that audit different systems, and compare them like www.collective2.com? and what do you think about the forex systems at that site.

2Do you have any experience with any system and did it work?

3Do anyone know a good Forex simulator and where can I find it( or is that what a demo account is).

4How many pips do you on average make each month?

5Is there any free currency screener available

6Which are the best software tools, and by how much can you increase your accurateness employing them.

7 Is it possible for me who live in australia to trade with EURO/USD or is it only possible to trade Aud with other currencies, or is it just that you have to take into consideration a third currency,thus making it more complex.

8 What percentage make and lose money and is the return on average greater for investors than investors trading in other instruments, taking into account the risk factor and that you can leverage 200 times.

Thank you spending your time reading this message.

 

[tommog]

HI,

1/ No, unfortunately I have very little faith in systems that you "buy", this is one of the many aspects of trading you will learn, but you can give two traders the same system and they will get different results. Trading is only partly about finding entries, in fact that is the easiest part of trading. You dont need to buy a system to find a good system. The reason why different traders get different result is because psychology plays a major factor. You can have a set of trading rules in front of you but it is only a very experienced trader that can stick to them 100%. Sometimes you are correct to override your own system when expereince tells you to, trading is anything but black and white, and automated systems are a very black or white approach. You cant afford to be inflexible when trading.

2/ I have never bought a system, but most traders have tried backtesting systems as have I. Sometimes the backtest looks to give fantasic results but when you actually trade it the results are very poor. Again there are a few reasons why this happens but the key reason is outlined above. Your best bet is to learn about what make the market ticks, understand price movements and psychology of the market and then every trade draw on your knowledge and treat every situation as unique.

3/ Thats what a demo account is, best bet is open a demo with the broker you are planning to go with, you will get familiar with the platform etc

4/ How many pips is a very hard question to answer, most traders talk in terms of % rather than pips because 2000 pips per month sounds fantastic but if you're only trading mini lots your return is still pretty modest. Where as you could be trading multimillion dollar positions and average 100 pips a month and be making a small fortune.
However as a ball park figure, an experienced trader that is consistent week in week out will probably be looking for about 400 pips a month. But some people will disagree, however all my expereince with trading at a professional level worked to about this target.

5/ Not sure what you mean by currency screener, if you mean a price feed then a demo account will supply this.

6/ Metatrader is an excellent free piece of charting software, the FXCM news feed is also very informative. Dont believe the hype about fancy expensive charts etc, provided your software shows live prices and has a few basic indicators (should you need them, personally I dont) then its all you need. You dont need lots of squiggley lines and studies on your charts to be a profitable trader, the less studies you can have on your chart the clearer your decision will be, and the more likely it wil be actually based on price movement rather than an abstract study.

7/ You can trade any currency, living is AUS doenst mean you only have to trade AUS pairs

8/ As for percentage winners/losers you will hear the figure 95% lose churned out from a lot of people. Many people say this figure but im pretty certain they have never analysed millions of transactions and worked out a percentage win/loss ration, if only 5% of traders made money i really dont think people/banks/countries would be risking billions of dollars a day in the market.
However it is fair to say the number of losers does significantly outweigh the winners, like anything in life that offers good rewards the failure rate is high. The 95% winners figure I personally believe to be utter rubbish amoung expereinced/pro traders, however it probably isnt an unreasonable figure for new traders. As for Forex as an instrument to trade, personally I believe if you can trade one market you can trade most markets, (accept maybe commodities where you need a more fundamental approach). 200:1 leverage is a trap that means new traders trade position sizes too large for them, but remember just because you have the option to leverage x200 doesnt mean you should use it.

Tom

 

[zuke]

As a newbie, I have eight questions about Forex and it would really help to get those answered and I will definately help you as best as I can in the future and you dont have to answer all questions, Im happy if you can just answer one:

1Do anyone know a good atomized system or preferably an independent site that audit different systems, and compare them like www.collective2.com? and what do you think about the forex systems at that site.

2Do you have any experience with any system and did it work?

3Do anyone know a good Forex simulator and where can I find it( or is that what a demo account is).

4How many pips do you on average make each month?

5Is there any free currency screener available

6Which are the best software tools, and by how much can you increase your accurateness employing them.

7 Is it possible for me who live in australia to trade with EURO/USD or is it only possible to trade Aud with other currencies, or is it just that you have to take into consideration a third currency,thus making it more complex.

8 What percentage make and lose money and is the return on average greater for investors than investors trading in other instruments, taking into account the risk factor and that you can leverage 200 times.

Thank you spending your time reading this message.

A good response by Tommog above, the only thing I would add is..DONT WORRY ABOUT INDICATORS YET!!

Imo, insecure traders needs lots of bells and whistles to make them feel as if they know what they are doing. You should focus on PRICE and of course support and resistance. Good luck!

 

[Directional]

dont look for a trading solution to be handed to you on a plate. There are no quick fixes in trading and the solutions that DO work are not going to be available from a website for £3000, though there are plenty of vendors that will happily alleviate you from your money with promises they can't guarantee to fulfil.

 

[888]

Take care. Try to learn trading and analysis yourself, without reliance on so called systems. Once you have gained the knowledge and confidence you do not need any system.
As long as reliance is placed on gurus , systems and automation , no self reliance is possible.
Every priest prays for himself.
So much b/s is thrown around about FX trading.
About the 95%........who really knows, no census has been carried out, it would be impossible to do so anyway.
Problem is that many are seduced into assumed easy money and quick returns.......and then cannot stay the pace due to losses and discouragement.
It takes time to learn trading, analysis, and most importantly to learn about yourself , your emotions and what type of trading suits you.
Once you have mastered the art of trading and emotional self control you are on the way to being a succssful trader.
Then trading becomes a profitable pleasure.

 

[888]

Regarding collective.com. Yes, they are a meeting place between "analysts" and unsure traders who lack knowledge and confidence.
Just think, if an analyst was so good , would he bother to peddle his advice for UDS 60 to 160 per month?
He could make far, far more trading himself.

 

[888]

How many pips each month? .............how long is a piece of string.
The pips depend on how many lots are traded , the frequency of trades and the win/loss ratio .
You will come accross many ego inflating pip tales...........disbelieve them all.
As a newcomer , try to work on 2 trades a day with a 4 pip profit per trade.
After that is working for 30 days , go for 2 trades a day at 8 pips per trade.
After 30 days of that, go for 1 trade a day for 30 to 80 pips per trade.......................

 

[YachtFund]

RE the pips, if you have 10k in your account and make 20 pips a day and that 20 pips profit is the equivilant of 2% of your fund in 200 trading days you should have over 500k. That seems like a good target.

 

[epic767]

Tommog:

1,2,: I agree with you that you should do this yourself, and learn to control your emotions, because I can imagine that you get more satisfaction from understanding what you are doing ,and thus how you are making your money ,rather than being dependent on a system, and not knowing the outcome, or if they will shut of the service.

3: yes, I opened 6 demo accounts. With 2000 dollar on each and using, 200:1 leverage on every one.

My criteria was to only buy currency pairs that are volatile, and then I added together all positive price trend increases for 1 month (using 1 hour interval), and then I divided the sum of all pips made by the number of positive price trends, to get the average increase every time it increases, so I know when I should liquidate my position, before the price trend levels off and begin to decrease.

The result:

I lost all my money on 4 of the accounts.

the remaining two accounts, one of the accounts currency pairs(aud/euro) increased from 0.622 to 0.625, before i liquidated, which is a 0.48% increase, but since i used 200 in leverage, it is a 96% increase.

however, the profit I made when it had reached 10%(with leverage) is 200 dollar, which i then reinvested into it, and using 200:1 leverage on, so I bought yet again currency worth 400 0dollar. And on the next 10 percent increase I made it resulted in a 220 dollar profit.

2000,2200,2420,2662,2928,3221,3543+3897+4714 and then 6% on 4714= 4996, however, I got 7852 because reinvested more frequently.

The other one, was nzd/gbp and it increased from 0.393 to 0.398= 1.27% and with 200 leverage=254%, and by reinvesting I got 46360 dollar.

Summary:

4 loser, with 2000= 8000 losses, and one winners 7852+46360=54212

Net profit= 54212-8000=46212

Which is 461212/12000=3.851 And I’m quite happy getting that during 40 hours.

No, idea, but I might just, have been lucky. However, I will try this with 10 000 dollar soon and see, because I don’t want to stay awake for 40 hours again, with just virtual money.

4 But if people get 400 pips every month, wouldnt they become millionaires pretty soon?

5 By currency screener I mean, a screener or a filter, where I can put in certain variables, such that the currency has to have increased by 1% the last weak, by 3% the last 4% weeks, and its shap ratio has to be more than 2, and so on. And then it finds a currency that fits your criteria.

6 Ok, i wil look more inte metatrader.

So this is partly why Im not interested any more in those systems =)

 

[tommog]

Epic 767,

Good luck with working on your approach to trading, its good that you understand systems are a waste of money, even if they are accurate calls you are not growing as a trader.
I must say that the way you approach the markets is quite complicated, it is very possible (if not a whole lot easier) to concentrate on learning one pair inside out. I think you will find it far more profitable to trade pairs that are a little more predictable and that abide by market rules a little more. You will see every pair has their own personality and when you focus your time learning one pair you will become master of it. Also by trading volatile pairs the spreads you are paying to get in and out of your positions will be far far greater than the liquid pairs. YOur trading costs will be astronomical over the long term and this is a business, if you had a shop would you want to buy in goods with a profit margin of 200% or a profit magin of 10%?

" 4 But if people get 400 pips every month, wouldnt they become millionaires pretty soon?"

Not quite, think about it, you could be a millionaire averaging 10 pips a month, depends on your account size and the leverage you use.
Money management is vital, if you are risking more than 2% of your total account on a trade you are heading for a nasty shock because you will almost certainly lose most if not all of your account if you go through a bad patch (which we all do at some point). So say you open an account with $10,000 dollars you should never be in a position to lose more than $200 on one trade. So you see, you would need a pretty huge account to average 400 pips a month and be a millionaire in no time. If you are getting more than a 50% profit on your account a year you are outplaying most professional hedgefunds. Forex is a fantastic way to make money and there is the potential to make fortunes, however like anything in life it takes a lot of money to make a lot of money and its when people open small accounts and risk 20% of their account on a trade in order to get a decent return that things go horribly wrong. Im sure you wil be successful but start very very slowly, $10,000 is peanuts in the scale of the market and there are plenty of experienced people out there that would be more than happy to relieve you of that money in a very short space of time. You should be looking to be profitable on a demo account for AT LEAST 3 months before you put a penny in the real market. Sorry if this sounds over conservative but its a fact and im sure most expereinced traders will agree with me

Good luck!




Tom

 

[Akuma99]

Nice post epic767, and all interesting questions. I would be perhaps 6 months further down the track than you, and if there was one thing I would say, it is develop your own system, don't think there is a solution ready for you out of the box, what works for one does not always work for another. Your greatest threat will not be the market, nor other traders, but instead your emotions, but it sounds like you have your head screwed on right so you will be ok.

The biggest investment you can make is in yourself, so get reading, find what your brain processes best and take small steps. Personally I traded virtual for 5 months, making good "virtual profits" for the last 3 months, but I made a pact early in the piece to do things the right way and take it slow. I have now moved to live trading and I have found the transition to be smoother because of it.

I am also in Australia, and the biggest challenge we have is that the Asian session tends to be quiet during our "business hours", with things picking up on Europe's open around 6pm (EST). My experience shows the USD/JPY as being the best pair to trade during this time, but you will find your favourite.

If you want an insight into how things went along the way for me, check out my blog (http://akuma99.blogspot.com) where I list my thoughts as things went along. Best of luck, and great to see another Aussie here .