What is your best advice to someone just starting out in forex?

[tarzantrader]

Hi,

I am interested in starting trading Forex. I am a complete beginner and have no idea where to start.

There appear to be tons of get rich quick schemes claiming to be the best thing ever.

I'm looking for something to make some extra money - obviously the more the better - but I don't want to get scammed or ripped off.

Please advise the best way to start off for someone like myself - how to learn about Forex, brokers, any good trading system or whether I should use a trading "robot".

Thanks for your time.

[Julie Hawk]

What is your best advice to someone just starting out in forex?

Answer from Jay and Julie Hawk:

Well, to start with, volumes have already been written about how to get started off on the right foot as a forex trader, so to keep our answer brief and within the scope of this forum, we’re going to focus on how important having a good mindset as a trader is to the long-term success of your trading business.

Basically, the majority of the trading pitfalls that forex trading beginners commonly face are due to having their trading mentality overwhelmed by the common and entirely normal human emotions of greed, hope and fear. Greed will often make traders fail to take profits at appropriate times, sometimes even to the point of turning what could have been a winning position into a losing one. Then again, succumbing to the emotion of hope might make traders turn a losing trade into a long-term “investment” as they fail to take losses suitably. Finally, fear might cause a novice trader to fail to enter what would ultimately have been a profitable trade as they get stuck in the pitfall of “analysis paralysis”.

Accordingly, most successful traders aim to keep their emotions firmly in check by having and following an objective trading plan that gives them trade set ups, tells them how to size positions appropriately for their risk tolerance and portfolio size, and provides clearly-defined trade entry and exit points. Following such a trade plan in a disciplined manner tends to remove the emotional element from trading so that the trader only has to focus on executing transactions and placing orders according to their system’s signals and position size recommendations.

We therefore strongly advise that those new to trading take the time to first put such a trade plan together and then to paper trade it, fully taking into account market spreads and commissions, in order to ascertain responsibly whether or not the trade plan will be profitable over the long run. They will also want to assess how deep any draw downs might be, because periods of severe losses could easily put them out of business as a trader, even if the system is eventually profitable.

If the trade plan doesn’t work out satisfactorily once subjected to paper testing, that would then be the time to adjust its trade signals, change its parameters, or just scrap it entirely and head back to the proverbial drawing board. New traders need to remember to be patient when going through this testing process, since properly performing this vital step can easily make or break their trading business.

Sometimes, more sophisticated traders who either have a background in computer programming (or the money to hire an experienced programmer) code their successful forex trade plans into a so-called expert advisor or EA. This EA program then works automatically within a trading platform like MetaTrader 4 to identify trading opportunities, take properly-sized positions, and then enter any resulting closing orders for the trader’s account. This was probably how many popular forex robots like Megadroid have evolved that share what their vendors claim are profitable forex trade plans with the public for a price. Manual forex trading plan packages like Forex Powerband Dominator are also available for anyone who wants to see for themselves how various forex experts make their trading decisions.

Those traders who do decide to try one of these packages as an off-the-shelf shortcut to developing their own disciplined forex trading plan, should patiently subject it to the same testing process that they would use to evaluate a forex trade plan they had developed on their own. Not only will doing this testing be educational for any novice forex trader, but it will also provide them with a suitable degree of confidence in any forex trading package they choose to test.

[baboon]

Hi Julie,

Good advice.

It is a mine field out there and the marketing machine is frankly not helping anyone.

There is such a thing as "traders help traders". Telling a newbie they can make $5,000 a week via the latest Holy Grail promotion is not helping anyone.

Personally, I am experienced enough to know how to create my own trading systems. I have mastered my emotions and am lucky enough to say that I have made far more money than I have lost in Forex.

I don't have time to pour over charts all day, so I spent significant time and effort in looking at signal services.

95% are junk and I would say that knowledge is required to know what to take and what to leave. However, using this approach has certainly made me a successful trader.

If you treat trading as a pure business proposition, this makes sense. I can outsource my lead generation in business, but that does not mean I will do business with every lead. If the prospect looks like they want to commit fraud, or are asking for credit which I sense will never be paid back, then I won't sell them anything.

The same is true for Forex. If you blindly follow someone else's signals, you only have yourself to blame if you lose. But if you can couple a decent knowledge with a decent signal service, I think it's a match made in heaven.

If you disagree with this, then perhaps you really want to become a full time trader. However, as I know very well from talking to successful traders, trading can become a JOB like any other, and many are now spending substantial time and effort to automate their systems so they don't have to put in the screen time.

Day trading sounds like a glamorous, exciting, perhaps even romantic proposition. But it''s lonely, time consuming, can get boring and what do you do if you have a "bad day at the office"?

These are obviously just my opinions, but sitting in front of a screen all day looking at charts just isn't as much fun as it used to be.

Simon.

[pharoh777]

Three Words: FOREX MENTOR PRO!

1) I would not be here to be able to discuss ANYTHING forex with any confidence without the education I received from these guys!! They helped me so much I am now happy to spend some time here in this forum trying to help others avoid some of the pitfalls and wasting money that I wasted

2) I WASTED THOUSANDS OF $$$$$ and HUNDREDS OF HOURS losing and not not understanding forex and getting frustrated and angry and feeling stupid before I discovered the honesty at FMP. It is a TINY, TINY amount to pay for being able to learn from real pros who care about the people they teach. You can drop $200 on an EA that may or may not get you any money in your account, or you can get a membership and learn to fill your own account (although I still use EAs too, and I'm much better at using them now that I understand forex better).

3) Remember "Give a trader a pip, feed their account for a day. Teach a trader to catch their own pips, feed their account for a lifetime!!!" Other places give you "systems" or "EAs" that promise to make you money. FMP teaches you to make it on your own.

That's my thoughts. I know you may think I'm biased and I am! I would not have the fortune of having a bias had I not learned the real deal about forex from Marc Walton & Co. There are some of the brightest, most caring and friendliest to novice traders you can find ANYWHERE in FMP. Their goal is success because if we succeed, then they succeed!


Oh and if you're interested in Expert Advisors (EAs) also known as robots, then please come join the fun my corner of the forum!! I would love to see you there!! We have lots of good stuff going on there and many of our followers are brand new to forex. Here is the link Forex Robot Tests


Kindest Regards,
Omar Eltoukhy