WHERE TO BEGIN WITH THIS QUESTION ????
For a newb, the best trading system would fall into the realm of "swing" trader, a term from the world of equities and simply meaning one who holds a currency for a number of days (which can turn into years and then you are called an "investor") and based on the simple concept of moving average crossovers.
MA crossovers are best in a "trending" market, which is a market that is moving strongly in an upside or downside movement and are not very good in a "ranging" market, where the price is just fumbling around, showing no clear picture of moving up or down. This is often referred to as a "consolidating" market or a "congested" market and each has a different look and feel, but I do not have the time or space to go into that lesson here !
SO, for the best results, we work with a trend following system, where trend is determined by the DAILY charts (they going UP or they going DOWN -- that determines your trend. When I see the WEEKLY and DAILY chart both agree that the currency is going up, I feel secure in placing a longer term LONG trade. (yes, I know you dont yet know how to see if up is up or sideways or down or anything, but that shall come !)
Having placed our trade, you now sit back and witness a HORRIBLE situation --- your currency price is DROPPING like flies at a DDT party ! (AND THIS IS WHAT SEPERATES THE TRADERS FROM THE WANNABEES !)
Understand that each day, every day, constantly ---- the price reverses at fairly uniform times on ANY currency UNLESS there is such strong momentum that this action is prevented, at least until 5pm, est in the US !
Using a variety of methods, a trader can usually pinpoint where the currency will drop to and has prepared for the drop which we call DRAWDOWNS !
WHAT WILL KILL YOUR ACCOUNT GRAVEYARD DEAD is if the price of the currency hits your stop loss point, which will then take all the money youve lost out of your account, hand it to the daughter of the owner of the brokerage and help her buy her new Maserati !
Of course, if you have never met this princess, you just might not want to buy her a new car without her giving you something back, but i leave that to your own desires and imaginations !
But, if you desire not to buy her a new car, you could have approached this situation in a manner UNHEARD OF by you at any time in your trading life ---- DONT USE A STOP LOSS !
How often have you been stopped out of a position, only to watch that position shoot up later in the day or tomorrow, pass your purchase price and provide a very decent profit (IF ONLY you had held on !!!!!!)
This technique requires TWO important considerations ---- FIRST is that you trade with the TREND and SECOND, that you rigorously watch your money management techniques, so as not to strain your margin on the most certain drawdowns.
NOW DO NOT GO OUT AND TRY THIS AT HOME, at least not until Ive finished teaching how it is done which should begin this weekend (maybe friday)
Ive been trading for 36 years and am still alive and well and wish to simply show a bit of what I refer to as "reality trading" which is nothing more than trading the REALITIES of the forex market, not what YOU WANT, but what REALLY EXISTS !!! I'm a MANUAL trader, so ive got no new EA's for you to glomm onto, but I can show you what the banks are doing and how they do it, which should give you one step up in the contest !
enjoy and trade well
mp