Vital Information You need Before You Start
Since BabyPips is mainly a trading community for traders in training, I thought I would do a series of posts, over the coming weeks, covering some basic stuff. So let's gets started by finding a good source of Forex education. In this article, I will explain as a new trader, what information you need, where to get it and how to use it.
A new trader needs quite a bit of information before they delve too deeply into trading. Even if you plan to start with just a demo account, you should know what you're doing before trading the demo. If you don't the second you start trading you will begin to develop bad habits. So let's break down what new traders need as they're starting:
1. Basic Forex Education
Basic education is the first essential step in starting your trading career. You would be surprised how many new traders skip this vital step, or approach it half heartedly. Your best source for basic Forex education is 'The School of Pipsology' right here on BabyPips.
Learning the basics gives you a great foundation on which to build on. So before you open a demo account, or a live account, eat up all the basic information you can.
Also, when you start a new job you are generally given training. Without this training it is unlikely you would be able to do the job well. Why do people think that trading is any different??
2. Forex Economic Release Dates
Every day there are scheduled economic figures released by various countries. These news events can really move the Forex market in unexpected ways and the moves can come as a shock, if you're not anticipating these news releases. The news is released precisely at the scheduled time as shown on the events calender on Forex Factory. Remember, when news is released if the anticipated figures deviate enough from the expected figures the market can react wildly, and unpredictably.
The best free economic releases calendar can be found on Forex Factory. The calendar is really simple to use. At the top of the page, you will see a little clock with the time beside it. Click on it and set the clock to your own local time. Once you do that all the reports released on the calendar page will be shown in your local time.
There are generally three different types of news folder; red, orange and yellow. They generally are like traffic lights. The red reports indicate that the report could have a significant impact on the market. Orange indicates the possibility of a minor impact while yellow usually means the report is insignificant. So, when a red folder is due to be released I tend not to trade. If I'm already in a trade then I try to tighten my stops or try to get out before the news is due to be released. As a new trader it is so easy to lose your account because of movements caused by the release of news.
This information is essential for when you start trading. Imagine you enter a trade ten minutes before a red report is scheduled to be released, and you didn't know it was supposed to be released because you don't know about the calendar. You could have entered a fantastic trade but it could completely turn on you depending on how the report comes out. So knowing what's coming and when it's coming is a major asset to you.
When I first started trading I noticed that around 9 p.m. Aussie time the market would move really fast in a certain direction, for no apparent reason. I thought to myself "Wow if I could learn to catch these moves I'll be rich". Those big moves were just your run of the mill economic releases. Even though I had no idea what economic release were, when I was starting my trading career. I am still surprised when I am in my chatroom, talking about NFP, and ten traders ask "What's NFP?" Do you know what NFP is?
3. Finding Other Traders
Finding a good group of traders to share ideas, and to learn from, can help you advance in leaps and bounds as opposed to baby steps. There are a few places to find other traders; one of which being the forum right here on BabyPips. The BabyPips forum has a great group of people in it. You should also check out the Forex4Noobs chatroom, which is free, and never closes.
Word of warning! Personally, I would not go to a large forum, such as the one on Forex Factory. This is because you tend to get a lot of fake traders dishing out advice because they need their egos stroked, and they are looking to eventually get money out of your pocket.
Finding other traders can allow you to grow faster as a trader because you can learn what works and doesn't work, from others who have tried it before you. You can also bounce ideas off more experienced traders and listen to their advice.
Knowing other traders have been successful makes your road to success less daunting. It's like having a friend along the way, holding your hand, providing guidance and perhaps support. I think we all know it's sometimes better to have at least someone in this industry, that understands what you're doing, because family and friends may not always be as supportive as you would expect.
If you do these three things before you open your first demo account you will find you are a few steps ahead of most new traders.
Hope this article helps you. Keep an eye out for my next article, in which I will discuss how to choose the best trading platform for you.
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