FX for beginners

[Juggernaut]

Hi everyone,

Im new here, I am wanting to get into FX trading and only know the basics at the moment, from reading this thread you all seem very clued up on the in's and out's of FX trading

Would someone be able to run through some basics on getting into fx trading, ie: common terminolgy and its meaning, basic TA signals, what to look for, what TA charting software is best, how much is fundamental analysis used and where to access this info,

I have access to a trading platform already and basic knowlege of TA - moving averages, fibonacci retracements, RSI, and some signals (H&S, morning star etc), but thats about it,

Any replys would be much appreciated

[dumbass]

hi juggernaut and welcome to the forex corner

you have asked a detailed question so here goes.

There are many technical disciplines used in forex trading all having there advantages and disadvantages and there is certainly no one system that works all the time.
I have tried to develop a basic understanding of a few and wait for multiple confirmation to enter and exit trades. it sounds a little complex but once you have put the time in to learn, it becomes quite automatic.
The way i learnt was to focus on the individual areas for a few months see what i liked and didnt like and then take that information and move on to the next discipline.
I think the best place to start is to develop some basic techical skills eg trendlines , patterns (triangles, wedges ,head and shoulders etc) , indicators , moving averages.Lots of info on the net and some biblical textbooks.

Fibonacci is worth a good look

Once you are up to speed i would study harmonic patterns. the main posters on this site use these set ups frequently, so you can see lots of real examples posted and excuted very successfully.This link is a start
http://harmonictrader.com/price_patterns.htm

Next i would spend some time studying candlestick patterns , they are a vital part of trading and again simple to learn and understand.
Now you should be getting to a stage where you could be thinking about starting trading,
so its now time to learn the least covered but most important area MONEY MANAGEMENT
skip this at your peril !

I would then have a dummy run on demo mode , where you can download a trading platform and develop your trading skills
ONLY when you can trade consistently proftably should you risk your own money
if you are flat in your first year you probably have got what it takes to trade for a living !

There are many other areas you may develop as your skills improve Elliot , Gann etc but in my eyes these are a little more advanced and will come in good time.
If i had followed this blue print i would have saved myself a lot of expensive lessons but lessons i have learnt none the less.
Hope this helps a bit and make sure you post lots here because the guys are knowledgable and patient.

[arco]

Welcome Juggernaut

I think DB has covered your question well.

There is always something to learn in this game.....I've been
trading for many years and I'm still learning.

Looking forward to your participation.

rgds - arco

[AMR]

Arco, peat, dumbass,
I'd be pretty interested in how your trading styles evolved over the years you have traded forex.

Cheers
AMR

[arco]

AMR

1984 Bought first IPO (British Telecom)....made $13,000.
Bought many more IPO's, and started buying other UK shares.

1988ish Started buying commodities. First contract in Deutschmark
- made $2000 overnight. (My first FX trade).
Then bought Coffee - got very lucky as
there was a frost overnight in Brazil....made $60,000

I guess you could say at that point I was really hooked on trading.

Bought first TA book in the 80's - couldn't understand what
is was all about......persevered, and probably have well over 100
trading books now.

1994. Moved to NZ - started buying Aussie and NZ shares.
Purchased my first charting program - Metastock, and started
checking the SP currency charts.

2000ish - moved more over onto FX trading.

arco - still learning

[Juggernaut]

Thanks for the welcome guys, and thanks for the reply dumbass, you have been a great help, I have got a lot to learn by the looks of it, that website on harmonic patterns looks very interesting, I hope to contribute to these message boards as much as I can

[dumbass]

hi juggernaut , no problem at all

i think the harmonic pattern set up is a good example of what i believe to be a good approach to trading.
i bought the book and passed it around to arco and peat.
The author (name escapes me for the moment ) sold it as an all encompassing trading system with different variations to the two basic patterns of the Gartley and Butterfly.
When a pattern presented he recommended trading it.
From our personal experience trading it, it wasnt so reliable and all the add on patterns were complex to find eg Bat , Crab , etc

so we came to the conclusion there are two set ups to look for

d wave completion at 78.6 with a b wave at anything from 23.6, 38.2 50 and 61.8 retracement and called it a Gartley

d wave complation at 127 with a b wave at most lkely 61.8 and 78.6
and called it a Butterfly

when this set up links with a trendline or divergent indicator or candlestick confirmation or elliot count its much more successful.

so we took a system simplified it and applied it to other disciplines.

its worth having a good look at the patterns but i much prefer our simplified system

[Juggernaut]

hi dumbass, very interesting post, thanks for that, I have spent a good portion of the day today scouring the net, reading and learning about TA and harmonic patterns, it was a very productive day and i am feeling confident with TA now. With harmonic patterns I am going to focus on gartley and butterfly patterns as you say, as there are to many to learn all at once!,

Quick question about harmonic patterns, in your last post you were quoting numbers such as 23.6, 38.2 50 and 61.8, these are the angles of the sides of the waves, how do you measure these on charting software?, or is it just a general 'angle formation looks close enough to a gartley', kind of method used? on my charting software (latitude FX) I cant seem to find a function to calculate angles,

cheers

[AMR]

Those are fibonacci retracements. To add them on latitude fx charts, it's the button to the left of the "T" and just to the right above the timeframe selection. My understanding of it is you connect up the ultimate high and the ultimate low and fibonacci gives support/resistance levels.

Didn't realise there were others here with latitude fx. Perhaps we should start a thread on the platform sometime.

[dumbass]

hi juggernaut,

i have labelled usdchf a little clearer

this is a potential bearish gartley

1 wave down labelled XA

3 wave retracement labelled A B C

its not a classic gartley in that B wave retraced at 50% rather than 61.8% of XA

however its respecting the fibonacci retracement levels of wave XA

eg B nailed the 50 % and C Wave the 23.6 %

so this set up provided an area to have a look for a reversal eg D wave at 78.6 % marked

by the box.

i then followed the hourly and 10 min charts to wait for confirmation and enter short

so far looks ok, 2 positions 100+ and 110 +

hope this makes it a bit clearer