New trader, old questions ...

March 15th, 2014, 06:51 AM

Hello,

Although I have been following a couple of shares, I am a relatively new trader.

I started a couple of years ago with a small account (1200€) and the idea of just getting a feel for trading.

I traded maybe a couple of dozen times and 'won' more times than I lost but ended up about 80€ down!

I have drawn a number of conclusions (all standard I am sure and all seen before) :

1. I did not have a a real strategy for the trades
- I would wait for the trend to be generally up (using the mk1 eyeball)
- I would set a profit taking value - based upon a 0.5% gain.
- I would set a stop loss at a rounded value
2. I did not stick to my "plan":
- profitable trades lost because my profit take point did not take into account rounded numbers e.g. I set to take a profit at 21.03 and the share pulled back at 21.01 where most other people had put take profit orders (i suppose) thus changing to a sell momentum and pushing the price back down.
- The trades I lost - I lost heavily as I did believed (hoped) the direction would change and expected a bounce back.
- Having been stopped out once I saw the market turn back up and quickly jumped back in to get back what I had lost - only to see the market turn down again! Basically it was a downward trend day and the mk1 eyeball had failed (I am shortsighted).
3. Over time I realise that there is no such thing as a holy grail.
4. I am my own worst enemy!
5. I am not helped by the web trading interface of the broker. It is slow and does not autofill fields. I have spent time developing (I am a java developer by day) an interface to help me monitor shares, add indicators and back test ideas - but the size of the job is huge and I want to trade for profit and not develop!

The other day I got an email from markets.com and thought what the heck and so I signed up for the demo account. I now have a bucket load of questions:

1. Meta Trader 4 seems to be the platform that I was trying to create, but everyone says it is best for forex and not for stocks. How is this so can anyone explain this to me?
2. Do I have to use leverage? Whilst I am learning I am not yet ready to risk huge amounts of money that I can see I would risk leveraging the trades. It seems to be based upon the greed of people to gamble money they do not have to win bigger amounts. But there is always the flip side where we can lose bigger! Is it just that I am not "ready" and therefore not ready to "step up" to "real" trading?
3. I have seen mixed reviews of markets.com but they are the only MT4 broker I have found which offers trading in stocks - albeit with CFDs. Is this so and also what do others here think of Markets.com
4. Everyone (exaggeration I am sure) seems to be into forex and us markets? Why and am I ill advised to trade shares in france?

I Live in France - near Thionville and I work in Luxembourg. If anyone out there is in this neck of the woods and would like to meet up and chat I would be delighted! Je parle francais aussi, donc n'hesite pas a me contacter

!!

Thanks for any comments / feedback.

I am an elite member and hope to continue my learning with help from this site (which is the only trading forum I frequent).

Rob

March 24th, 2014, 10:21 PM

Here's my quick take on your questions:

1. MT4 is a very good for charting purposes, and it was designed originally for forex. This is why it's best known in forex. Keep in mind that while it's a good charting software, it's not the best for order executions. As for stocks & indexes, other platforms such as Ninjatrader & Tradestation dominate. Both are charting & execution software rolled into one. If you are a longer term trader, these differences might not matter so much. However, for daytraders, speed of execution & minimum slippage are very important.

2. For traders just starting out (or any trader who is not yet consistently profitable), minimum leverage (or no leverage at all) is of utmost importance. This is easy to do in forex, where you can trade in mini & micro lots. That's why forex is the perfect place to start learning for most beginners with small capital (anything less than $10,000). Basically you want to trade as small as possible (but with real money, not demo) while learning the ropes; until you gain enough experience and wisdom to have a solid profitable trading method. Then, and only then, should you ramp up the leverage. Warning: this usually takes years (no less than the time it takes to complete a college degree).

3. Sorry, can't help you there, since I'm in North America. Learning how to trade via forex by going with a reputable MT4 broker is certainly not a bad way to start your journey. Once you know how to trade profitably, you can pretty much trade any market profitably. There's no rush. Take your time and build a solid foundation first. At your stage, the broker/platform matters much less than the time and effort you put into your education.

Good luck and good trading!

April 5th, 2014, 12:30 AM

i would definitely advise using leverage, i think its way too dangerous. wait to build your account with successful trades.

New trader, old questions ...

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New trader, old questions ...