Don't give up your original Plan
Hi guys, a few questions.
I have read a few books and opened a demo account with Oanda (can anyone recommend a better free unlimited demo?), which I plan to use for 12 months or so before getting into the real thing. Anyway, I will be trading intraday, but only after I get home from work, which is about 7pm GMT. So I have two questions:
1) I am planning on only focusing on one currency pair, getting to know it and apply some strategies. Is this common, i.e. to only trade one pair?
2) Which pair has the highest volatility during these hours (7pm-12am GMT)
Thanks and regards.
Hi John999
Your plan to trade intra-day is sound, and even more so, given that you plan to become familiar with the workings of one pair at a time.
In my view, you need to look at liquidity, spread and volatility as opposed to volatility alone. A highly volatile currency pair can gap clear past your entry/exit without giving you a fill, but at the same time, deliver you a nasty loss. To avoid this situation, you need high liquidity - see the 3 pairs below.
In order to compromise between the three of these pillars, you could focus on one of these:
USDJPY
EURUSD
GBPUSD
The GBPUSD would be my recommendation for you, because it is your home currency pair, and has nice Daily Range, as well as being highly liquid, with low spread. It's called "cable" because of the Atlantic Telecommunications Cable linking USA with GB. When this pair moves, it's "look out" because the moves can be fast and spectacular.
Many forums have threads dedicated to this pair, and discuss the idiosyncracies of it.
The EURUSD would be my second pick. It is more reliable in trending, but equally prone to sentimental reversals lately - succumbing to the whims of the market when the Fundamantals seemingly support trending in the opposite direction. In this sense, trading the EURUSD is better suited to strictly Technical Analysis methodology right now - forget the Fundamentals. The pair is the most liquid, but has a lesser daily range (ATR) normally than cable.
USDJPY also has a nice daily range, but I am sure whichever pair you choose, you will discover things that will help you with an edge, and lead to higher probability of success.
Now, if I may throw 2p of advice into the ring ...
When starting out trading, try to trade the longer Time Frame charts, such as the daily or weekly. I realise that because your working hours prohibit your participation in the daily chart trades, you are aiming for intra-day trading.
Thats' OK - but at least look at the Daily/Weekly background trends before considering placing your trades. If I were in your place, I would be looking at the 4H charts to trade from. These take longer to develop, and have far less "noise" than the scalping time-frames. I have had 5 years trading experience, and still can not scalp successfully - the action is too hard and fast at times, and even when I seem to be doing well, a series of stopped out trades will undo all my good work!!
Not for me I'm afraid.
Regarding a demo trading account: I think MT4 is probably the best for learner-drivers!
I have used MT4 from IBFX - FXPro - ODLSecurities - and North Finance. It really matters little - you don't have to give accurate details except for your email address, and gmail is accepted. I think my phone number was a digit short of the truth too. I still use MT4, and place my live trades with another online broker.
Most of the platforms say they are for 30 days, but if you are actively using them, they do not expire. If they do expire on you, you just click on "File" then "Open an Account" and simply reopen a new one on the same platform. You get to keep the same indicators and templates, because these are created and stored on your own computer files in "Programmes".
A good feature with MT4 is the ability to trade 1/10th lots (minis) as well as micro's (1/100th of a lot. Each pip in a mini a/c is worth $1 and for a micro, 10 cents.
Hope that helps, and good luck with it all. Don't stop asking questions, and try to find other traders in your own locality. Any trader would gladly share with you whatever pitfalls they have discovered, as well as useful tips.
It's a fortunate trader indeed who finds a mentor early in his trading career.
Best wishes
Ivan
