- Forex concepts in the book and in life
- Broker selection and demo account
- Trading terminal
- Exchange terms
- Technical analysis base
- Choosing a trading system
- Three main tips for a beginner
- Video – How to start the path of a trader
The difference between the concept of forex in the book and in life
What is Forex in terms of scientific.
When you search the Internet for the word “Forex”, you will find many definitions. Their main point is that this is a legal and legitimate market in which the main players are large banks, but traders and various financial organizations that are interested in exchanging currencies can also participate.
What is really …
Talking about the market in human language, I consider it necessary to answer the basic first questions of beginners that come to mind to people who hear about the FOREX financial market. “Forex is a scam”? At first, most people are skeptical about the market, thinking that this is a scam, a scam and a casino. Where do the legs of such thoughts come from? The thing is that: a) there were funny cases on the market with bankruptcies of such “Forex companies” as ForexTrend, MMCIS, etc. These companies were built on the principle of financial pyramids, where profit from investments was paid out of new deposits. And no one thought much about bringing clients to the market. b) the existence on the market of the so-called “boiler” forex brokers. A boiler company is a company that will lead you in every way to a quick replenishment of your account, and, by the way, that’s all. They are not interested in your earnings and your “profit withdrawal”. So where to start a newbie in forex?
5 steps for a beginner to forex
In this section, we will look at how to make money in Forex from scratch, that is, we will tell you a step-by-step algorithm of actions, after reading and following which you can successfully start your career as a trader in the foreign exchange market.
Step 1 Choosing a broker and opening a Demo account
Almost any dealing center (DC) is suitable for this step, the main thing is not to go to the “boiler room”. I recommend opening an account with large companies, since along with a demo account you will receive additional customer service. The site also has a page of promotions for traders from well-known brokerage companies, there is a comparative description and an overview of the companies. This material will help you decide which company you are more interested in starting to cooperate with. So from words to deeds, we open a demo account.
Many consultants of brokerage companies give advice on opening a demo account of the size of a future real account. This, perhaps, is partly correct. At the first stage, you don’t have to bother with this, open a demo account for a large amount, and play as much as possible with opening and closing positions without risking your own money.
Step 2 Trading terminal
Today there are many terminals for trading, I recommend staying on the most common – these are MetaTrader 4 and MetaTrader 5. Both terminals are very interesting, the most popular at the moment is MetaTrader 4, but the metaquotes company itself is now actively promoting MetaTrader 5, there there are indeed a lot of cool features. So if you are just getting acquainted with Forex, then I recommend that you start with MT5 and get used to it right away.
Important! Customize the terminal for yourself to make it easier for you to perceive the chart. There are different color schemes, for example, I am impressed by black candles on a white background. This allows me to see the graph as clearly as possible.
Step 3 Understand stock terms
To make it easy for you to communicate with the broker on the forums in the future, and to understand the account readings, consider basic terms such as:
- Trading lot
- Buy Limit / Sell Limit, etc.
Some of these terms can be found in the trader’s dictionary, which is presented on the site. The rest, more specific, are already, by necessity, on the Internet. I recommend that you do not bother too much, you will not need all of them anyway.
Step 4 Master the base of technical analysis
An effective start for a beginner trader is almost impossible without mastering the technical analysis base. This step is very interesting and important, as it will allow you to lay the foundation for successful trading. Of course, it is difficult for a beginner to figure out what to read and what not to read, there are a lot of books, and it will take a lot of time to process the information, if the most important is not selected. Now I will try to put forward those directions that you should look at, specifically from the book. We will study the book by Jack Schwager “Technical Analysis”
IT IS BETTER TO TRY AND REGRET THAN TO REGRET THAT YOU HAVE NOT Tried …
In my opinion, the book is quite large, with over 700 pages of information. In practice, you only need some of the knowledge from this book.
Which in my opinion is worth reading:
1) Part 3, from page 44 “Trends”
This section will help you understand how to determine the trend in Forex using a price-based chart. This is very important, because knowing how to correctly determine the mid-term direction of the market, you can already make money.
2) Part 5 p. 85 “Support and resistance”
This is the second and most important aspect in trading, which will allow you to determine when to enter the market and when it is better to “sit on the fence”, that is, outside the market. You should be aware that the price of most financial instruments, and especially a foreign exchange asset, moves within a range.
If you look at the zones of “support and resistance” from the fundamental side, then, in short, these zones can be designated as the zone of superiority of market players’ forces. Support is formed in the place where the bears are no longer willing to sell the asset, and resistance is in the place where the bulls are no longer interested in buying a trading asset. Read more on the pages of the described book.
This knowledge will be quite enough to start trading in financial markets, whether it be the foreign exchange market, the cryptocurrency market, or the stock market for goods, and so on.
Step 5 Choose a trading system
Most of the sites that you will visit or have visited say that you need to have a trading system. Of course, having a trading system is important.
At the moment, a lot of systems have already been developed, so I recommend you not to “reinvent the wheel”, but to use ready-made trading systems of the TS.
Start with automatic trading systems (ATS), these are the same trading systems, simply written in the form of a code, which can be run in the strategy tester and, if successful, run in trading. It is easy and convenient and, most importantly, it will show you that consistency is profitable in the market.
One of these trading systems, in the form of a robot advisor, you can get on this site for free.
Here is the online monitoring of this advisor –
To test trading strategies, as I mentioned earlier, learn what a strategy tester is in the MetaTrader 4 terminal.
Master the strategy tester. This will allow you to make another successful contribution to a successful start in Forex for a beginner.
It is believed that this knowledge is enough to understand where to start in Forex and, more importantly, how to correctly start your path as a trader in the financial markets.
Forex beginner tips
Tip # 1! – Do not rush, at the beginning of the path you can break a lot of firewood. First, spend at least a couple of weeks researching this topic. Next, start training on a demo cent account!
Council number 2! – Explore the trading terminal! First, you need to master the terminal, as you need to know how the device with which you will earn money works!
While practicing on a demo, consider all possible types of orders. Place pending buy / sell stop orders, buy / sell limit. Learn how to set a stop loss.
Tip # 3! -Distribute the risks, this advice, if properly handled 100%, will allow you to increase your capital!
The point is not to put eggs in one basket, because neither manual trading nor a trading robot will give you 100% reliability. It is better to distribute your capital to many sources, for example, 10 trading advisors and several manual accounts for trading. As a result, if manual trading or one of the advisors fails, you will still be able to come out “in + plus”.
That’s all, trade systematically, earn money, until we meet again.