Tuesday, April 24, 2012

Currency Trading Guide For Beginners

September 29, 2011 by  
Filed under Forex Tips


As a new trader, I bet most of you have a lot of question marks in your mind. As I am once a new trader myself, I totally understand the feel of loss when looking at a chart.

When I first started trading, I remember that I log into my trading platform and do not even know which time frame to go into. Even if I randomly select a time frame, I do not even know what to look for in a sea of blue and red candles.

Therefore I decided to write this post on currency trading guide for beginners to help new traders who are reading my blog to continue in their journey of forex trading.

1) Time Frame Selection – In order to know which time frame to use or look at, you have to first decide what type of trader you want to be.

If you want to be a day trader who enter and exit your position within hours, I will recommend you to use the 15 minutes and hourly chart.

If you want to be a scalper who enter and exit your position within minutes, I will recommend you to trade with the 1 and 5 minutes charts.

If you want to be a position trader who enter and exit your position for days or even weeks, you should be looking at the daily and weekly chart.

2) What To Look For – Once you have decided on the time frame to use, you will now decide what to look at on your chart. The most important thing for new traders to learn to see in their chart is support and resistance.

You should start to play around with your Fibonacci indicator and the pivot point as these are important level of support and resistance.

The reason why I say that support and resistance is important is because these are what actually causes the price to move. Once you have a good understanding of the support and resistance, you will understand why the price moves in a particular way.

3) Which Indicator To Use – After you have mastered how to look for support and resistance, you will need to decide on the indicator to use.

Personally my favourite indicators are MACD indicator and Stochastic. However different indicators are used in different strategies. So first of all, try to play around with different indicators so that you have a better feel of it.

4) What Strategy To Use – Now it is time to make an important decision, you will need to decide on the forex strategy you are going to use.

For new trader, I will suggest you to pick up a good trading course and then learn the strategy taught in the course. After learning, you should spend at least 3 months on demo account to make sure that you are able to execute the strategy with ease.

Once you are able to produce consecutive profitable months with the strategy, you are ready to rock and you can now move on to a real account.

The above are the things that you have to go through as a beginner before you are able to trade professionally. I hope that these information will be useful for you and eventually make you a profitable trader.

Other Related Posts:

  1. Forex Trading Tips For Beginners
  2. Forex Technical Analysis – A Guide to Successful Trading
  3. 4 Currency Trading Basics Tips For The New Traders
  4. How To Trade Currency For A Living

Comments

2 Responses to “Currency Trading Guide For Beginners”
  1. Edward says:

    I am learning how to trade currencies. I have read that the EUR/USA pair is
    the better way to go due to the smaller spread. Do you think this is the pair to start with? Also, if a person lives in the USA, and wants to close out the trade at the end of the day, when is the best time to begin trading?

    Thanks

    • Kelvin says:

      Hi Edward

      The EURUSD pair is suitable for new trader as the volatility is just nice, not too much and not too little.

      As for the best time, it will be around London and New York Open and Close time. For the timing, you can take a look at this post that I have written

      Important forex trading hours

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