New to Forex Trading – Eager to Learn and Seeking Guidance

[Silas Li]

Hi everyone,

I am a newcomer to the world of Forex trading and have recently joined this community. I’m fascinated by the markets, but I also realize how steep the learning curve can be.

I have started with some basic self-study, but I strongly believe that having a mentor or learning from experienced traders can make a world of difference. I am hardworking, disciplined, and eager to put in the time required to understand the charts and strategies.

If anyone is willing to share some insights, recommend study materials, or even offer a bit of mentorship, I would be incredibly grateful. I’m here to listen, learn, and grow.

Looking forward to connecting with you all!

Best regards,

 

[aotegaoteg]

As a beginner, your forces should be on learning by doing and putting in the screen time, there are many free materials online that can be used as a starting point, they will provide you with the fundamentals, i suppose this is where you should start. after gaining an understanding of the basics and fundamentals, its time to put the gained knowledge to use, by backtesting.

Back testing allows you to test the knowledge you have gained and all the trading strategies that you came across during the fundamentals, using historical market data, It also allows you to validate the claims and strategies made that you came across and allows you to evaluate your potential profitability, your risks appetite, and your success as a day trader, All without risking any of your capital. There are platforms, which provide access to 20+ years of historical back testing data,

and by following these approach, you will be able to gain valuable knowledge and experiences and use it as a foundation to
build your own day trading strategy and improve on it just by learning by doing and putting in the screen, also do keep in mind, that this process takes years to master, good luck

 

[thebrownsv]

Here's a natural comment:
Welcome! The fact that you're already aware of the learning curve puts you ahead of most beginners who jump in thinking it's easy
Most new traders lose money jumping between setups and pairs looking for the "best" one. Consistency beats complexity every time.

Feel free to ask questions anytime, happy to help where I can.

 

["D"]

You will never do as well as you could without some understanding of fundamentals. Buy yourself an introductory book to macroeconomics, study it. You do not need to do the math in the book. You just need to develop a basic understanding of how money moves and the relationships between different markets. Don’t over think it. You do not need to be an economist.

If you pull up a chart observing a technical indicator. The indicator goes “negative”. It has no effect on any financial market. Does not matter what indicator, what timeframe, or how many indicators with negative readings are observed. No affect. Technicals cannot move the markets. Non Farm payroll is a fundamental indicator in the United States. If a “good” reading is expected and a “good” number is released then it is generally business as usual in the financial markets. Now if a “good” number is expected with a “negative” number being released. And that negative number falls outside the normal range and is a complete surprise, key word being surprise, you will see an instant dramatic reaction throughout the United States financial markets. Not only that but the reaction will affect all the global financial markets. You will see notable moves on the charts worldwide. One reading, from one fundamental indicator, from one country can cause this. The take away here is fundamentals are very powerful. Fundamentals move all the markets. You cannot ignore fundamentals if you are going to be involved in the financial markets.

Interest rates are the primary driver of currencies. Important indicators are those related to inflation, employment/unemployment, GDP and jobs data. This should get you started. Don’t overwhelm yourself with volumes of economic data which will only paralyze your decision making. Focus on the most important economic indicators that drive currencies.

Analysis of currencies should start with fundamentals. Many believe that fundamentals are best used as a guide for trading decisions over a period of the next 3 to 6 months, that fundamentals have little shorter term advantages. Fundamentals are successfully used to trade the shorter timeframes. If you look at the thread “A Professional Approach to Trading Futures”. Fundamentals are used to trade the one and three minute timeframes. It is a thread worth reviewing.

You should know what you are going to trade, why and in what direction before you open a chart. If you know what direction to trade in, it is a huge advantage. As a new trader always trade in the direction of the fundamentals. You will significantly increase your win rate. Once you learn to trade with fundamentals you will never consider trading without them.

Technical analysis has its place. Many fundamental traders trade a technical strategy, myself included. Fundamentals determine what you are going to do and why. Technicals are used to get you in and out of the trade and manage it while the trade is in progress. Fundamentals and technicals compliment each other well.

 

["D"]

Big problem with a lot of new traders is learning the language of the business. Different disciplines have their own nomenclature. Medicine, engineering, law. What you read and understand may be very different from what someone in the industry understands. They can read the the exact same thing as you coming to a very different conclusion. This is because words may have specialized definitions within a specific field of study that are unrelated to common definitions in general use. You must learn the language.

Get a subscription to Bloomberg and/or other similar publications. Read the relevant articles relating to currencies. See what is said. Different publications may offer different opinions. Look at Central Bank statements. Use a specialized dictionary while going through all this. Look up the words as they are used in their specialized context. Studying until you understand what is really being said, not what you think is being said. You need to have a correct understanding to make good decisions.

You must learn to determine what a currency is worth. And I am not referring to mindless technical indicators here. If you cannot determine what it is worth you will never be able to determine when a currency is expensive or cheap. You won’t be able to determine what is a bargain missing a lot of great buys. Or you will pay way more for something than what it is worth taking losses. If the EUR is expensive and the USD is cheap, buying the dollar against the Euro is a lower risk trade with a higher likelihood of success. Buying when a currency is expensive expecting it increase in value is not a sustainable strategy. Buying currencies to some degree is no different than going shopping. If you get a great price on pants you may buy a few extra pairs. If they are expensive you wait until you get a better price. If someone offers you double what your car is worth you sell it. Learn to be a good shopper.