Forex trading for beginners

I was first introduced to the forex currency trading after suffering huge losses on the commodity market. At that time, I traded on the coffee market with New York Commodity Exchange (NYCE) using an offshore brokerage firm located somewhere in the British Virgin Island. Being a beginner in forex and never been exposed to secrets of trading before, what I really aware was, the basic concept for forex is just like any other trading markets, that is, we buy when we anticipated for an upward trend of the price and we sell when we anticipated for a downtrend. Trading in the forex market also refreshed me on the basic terms of trading. When we placed a buy in an anticipation of the upward trend, we are said to go long with the market. The upward trend itself is known as the bull market. On the other hand, when we placed a sell on a downward market, we are known to go short and the falling market is known as the bear market. The ability to do the sell first, buy later in a falling market is one of the successful feature I used to promote the forex market to my potential clients. Since the people were not exposed of such feature back then, plus not much exposure of neither trading tips nor online video tutorials, I managed to secure a few big trading accounts, only by placing much emphasize on short selling on the falling market.

I was never concern on the term forex broker that time. As far as I was concern, for as long as there is no problem for the customers to make withdrawals when they made profit (if any) in forex trading, that should be good enough for me. No further questions shall be asked. The transactions were all based on trust. What I knew was that, the broker played the role as an intermediate between the exchange and the traders like me. What I didn’t really realize was that, there could possibly a syndicate running the scam on forex trading to cheat peoples’ money. This was done in the sense of quoting a very wide spread on the bid and ask price. When a lot of the investors (including mine)lost their capital on the forex market back then, it was one of the worst moment of my life. I felt depressed.

I realized that what was lacking on my trading years was risk management in the forex market. My former boss (who was former trader of the commodity market on the local bourses) never place much emphasize on risk management in the forex market. As we were absolutely sales oriented company, the objective was to garner as much investments as we could at any particular month and hence, what we were being taught was to influence and persuade the potential investors to pump in as much capital as they could afford (even beyond their means) so that we could earn handsomely on the commissions for bringing new forex trading accounts. I know it is unethical. I was too young to think of business ethics back then. What maters were the pay that we took home every month. We were brainwashed to blindly believe that “money rules” that time. Pathetic.

Looking at bright side, forex currency trading has taught me so much in the sense of valuable knowledge and experience. My basic knowledge on technical analysis of the forex market started when I realize that I would not survive if I was too dependant on my former boss as the chief trader. Initially, he has this so called forecast figure to predict the market movements for the day. ‘The figure’ as we called it, was actually a combination of various technical indicators being placed together in single piece to predict the market movement for the day. It worked one day but not for the rest of the week. Thus, in knowing the secrets after doing some research on my own by reading substantial reading on forex market, I came acquaintance with the Relative Strength Index (RSI), the Moving Average Convergence Divergence (MACD), the Stochastics, the Candlesticks, the Point and Figure, the Bar Chart etc. I even plotted a huge candlestick graph to reflect the market price in yearly basis (which came really handy to my colleague who made tones of profits that time). My approached for the technical analysis of forex is by looking at the bigger trend (yearly) and then zoom it to a narrower period (monthly, weekly, hourly, 30 minutes and 15 minutes). My theory that time was, if I could identify the general trend of the price movements, I could identify the entry and exit points of forex trading because the general believe is that ‘history will repeat itself’. It did made sense as the charts and the analysis did give some help to my fellow traders (not many of us though) in their tradings.

Becoming a forex trader nowadays, in this country, has changed a lot. Even a 15 year kid (seriously) can initiate a trade with the help of automated forex trading software. It is widely available on the internet for everyone to try. The software calculates the odds and even of placing any buy and sell over the forex market price and the position (buy or sell) is initiated with just a click of mouse. Voila! You have become a forex trader, as simple as that. The only catch is the money the forex trader is willing to spend to buy the software and of course, the money being invested is the money that you are willing to lose over the trade.lol. No experience is required. No forex expert advisor in forex is needed as they have mutated and turned into software and for sure, the newbie in forex don’t have to give a damn on forex currency pairs. Just follow what the robot says and you are now part of the market. Risk management is the least that the forex software or forex robot cares of. Anyway, it’s not their money being traded though.lol. Moreover, what is the point of paying huge fees for the forex expert advisor and understanding the basic of the forex market since the forex robot can do the job in the blink of an eye.

Why do learning the forex basics are very important for the beginners?
Let us find the answer by taking the example of learning to play a sport, say golf. In golf, there are various levels that we need to cover before we could even begin to play on the green. I am a total beginner in golf of which I am still improving my shots on the driving range. But even before that, I had to learn what golf is all about. Golf is a game that needs to be played with passion. We have to be passionate with every single aspects of golf before we even hold a golf club. When I was a teenager, the sport that I love most is snooker. I am an ardent fan of the world’s top snooker players like Jimmy White and Stephen Hendry. My very first encounter with snooker was when I was 15. My best friend used to hang out at the snooker arcade so one day, I followed him just out of curiosity why snooker has caught much of his attention to the extent that he spent more at the arcade than at home. My first game was not a bad one as I managed to pot few balls after learning the basic techniques from my friend.

From then on, I fell in love with snooker. I bought snooker tutorials video (back then it was on tape, CD players were alien to me) to learn from the basics of snooker to the stage of the art of snooker. I have personal collections of the video tutorials hosted by various top snooker players at that time. I learned from the basic to the complete rules of the game, how to pot the ball correctly, how apply positioning play the make the best break (highest point earned in a single series of continous potting) in a game and since sbooker is a gentlemen game, I also learned the ethics of playing snooker. Over the years, I gained experience especially in dealing with pressures because the way we play is controlled in a way or another by the way we control our emotions. Those precious knowledge of managing the emotions has helped me a lot in dealing with pressures in everything I do in life so far.

There are clear fallacies and misconceptions that the beginners in forex being exposed to in relying so much on forex robots to do the trading. Yeah, don’t bother on the losses if you inherited the capital from your darn rich Uncle Joe or if the money used to trade is not yours, but do care on your trades if you really want to make money with forex for the long run . Always bear in mind that the capital we invested in the forex market is actually a very small chunk of the market as a whole. If say we invested in a very minimal capital, say USD 250, and we failed to put priority on risk control in forex market, the possibility of the capital to be swept away by the market in the very first trade is almost 90 &prcnt,. Therefore, the share of experience of forex trading for beginners above could give some insights to the beginners.

Good luck to the newbies.