Monthly Archives: May 2016

I did not write this article, but I like it so much that I have to post it on the My First Pips blog. These 5 phases are true and if you have been trading for a while you will identify with these phases. If you are new to trading, these phases will give you an idea of what’s ahead. Step One: Unconscious Incompetence. This is the first step you take when starting to look into trading. You know that it’s a good way of making money because you’ve heard so many things about it and heard of so many millionaires. Unfortunately, just like when you first desire to drive […]

One of the advantages we have trading Forex on the internet is the access to so many different trading systems and so many different indicators. There are over 1000 indicators to choose from and there are more systems than there are traders! We have access to many of these systems both freely and commercially. What a great advantage we have as traders! Or is it an advantage? What if we lived in a world where, if we wanted to trade the Forex market, we were given only 1 system? This system was worked on only 1 timeframe and included 2 indicators and a couple of moving averages. We learned about […]

There is a wide range of timeframes to choose from when you are going trade the Forex markets. What determines the timeframe you choose often has to do with what kind of time you can devote to trading on a daily basis, or what your appetite for market “action” is. If you have several hours a day to devote to trading, you may choose to trade the 15 minute or the 1 hour charts. If you have only a few minutes a day, the daily charts might be better suited to you. Perhaps you are a buy individual but can tear away to check your charts once in a while, […]

You’ve decided that you want to trade Forex. Why? This may sound like a weird question, but the answer to this can literally make or break you. It’s the “why” that can make you successful. Of course you are trading to make money, but depending on what that money is for can make all the difference. If you want to become a successful, superstar trader, it’s time to decide what the final goal of your trading is. Here are some examples of why other successful traders are trading. 1. To fund a retirement account 2. To earn enough to go on a vacation of a lifetime 3. To make enough […]

There are different ways to trade the market, specifically, there are different lengths of time to hold onto a trade. You could call these different trading styles. Some traders like to be in and out in a few minutes capturing 3 – 10 pips, while others like to hang onto a trade for days, weeks even. There is a good fit for every trader, but that fit is different from trader to trader. Here are the 4 different kinds of traders with a brief explanation. Scalper: A scalper is looking to make a lot of small trades during their trading session. These small trades are aiming for 3 – 15 […]

This is a topic that is very confusing for 99% of all traders. The spread itself is very straight forward, but when you get ask about the Bid and Ask of it, you will get a blank stare. Depending on whom you talk to, the definition of Bid and Ask change, so I will explain how each work and you can make the call yourself. You will understand what I am talking about in a few minutes. The first thing you will hear is the broker you are using will make their money from the spread. What this is is a few pips they take off the top when you […]

Just like there are orders that get you into a trade, there are orders that can get you out of a trade. There are 2 kinds of exit orders, they are: 1. Stop Loss order 2. Take Profit order Each of these orders will take you out when you are in a position, and each are something you can change as you are in the trade. Stop Loss order: This is an order that goes behind you in the market. That is to say if you are buying, going up, the Stop Loss order (SL) will be placed under your current position. If you are selling and want the price […]

An order is how you get into a trade and there are 2 ways to place an order to enter the market with your Forex broker. You can place an order that gets you in the market instantly or there is an order that gets you in when the market gets to a specific price that is not the price it is at currently. It’s important to know the difference between these orders as it will save you a lot of frustrations and time when you go to place an order. There are the Forex traders’ generic terms and there are the MT4 terms, I will give you both. An […]

Margin goes hand in hand with leverage. Leverage is the amount you can magnify your position, margin is the amount of money you have to put up to trade a position. Currently in the US, brokers can offer you 50:1 leverage and that equates to 2% margin. With 50:1 leverage you can trade $1000 by putting up $20 of your own money. $20 times the 50:1 leverage equals the $1000 you can trade. The $20 that you have put up is the margin required to hold the $1000 position. $20 out of the $1000 equals 2%, so the margin is 2%. 50:1 leverage = 2% margin 100:1 leverage = 1% […]

One of the biggest attractions to the Forex markets is the leverage FX brokers are able to provide. Traders are leaving Stocks and Futures to trade Forex because the leverage is so attractive. So what is leverage? Leverage is a magnifier. It takes the money you want to put up to trade and magnifies its value. Trading currencies means you are buying and selling with the expectation that the exchange rate changes in your favour. These changes are 100ths of a cent so they don’t amount to much, but with the power of leverage you can make a small change magnify into a larger change. Right now in the US, […]