YOU ARE HERE—As you work on the mechanics of trading with your demo accounts, I begin to fill in the blanks so that when you have those under control, you will be ready to do some trading—with play money only for now, please!
FOREX is a very big trading space. It attracts an amazing array of traders, styles, techniques, systems, and methods. Perhaps most importantly, it is composed of traders focused on a wide range of price action and time frames, entering orders from a 1,000 lot to a 10,000,000 lot. The market accommodates full-time very sophisticated computer systems executing trades in a duration of seconds or even a fraction thereof. These systems may be hunting only two or three pips. It also accommodates the small part-time discretionary trader watching 1-day charts and seeking 300-to-500-pip long-term profits while he toils at a day job. And, it accommodates everyone in between.
This chapter is intended to start you thinking about where your own trading space may be located in this vast continuum.
Tip: Find a trading space that fits and drill down deep. While it may take some moving around to get comfortable, one of the biggest mistakes new traders make is shifting from one space to another; trading 5-minute bars today and 4-hour bars tomorrow.
Charts, Bars, and Trading Spaces
I will assume at this point you have decided to be a technical trader, using news as your fundamental analysis component to gauge the long-term trend and the ...