Easiest/Hardest Instruments for Beginners

[Nowler]

Hey folks,

What in your opinion would be the easiest and the hardest markets for a beginner to learn to trade?

For example, where would the majors of FX rank compared to Oil and Gas of the commodities?

Thanks

 

[options-george]

Hey folks,

What in your opinion would be the easiest and the hardest markets for a beginner to learn to trade?

For example, where would the majors of FX rank compared to Oil and Gas of the commodities?

Thanks

This depends on the type of style/strategy that you are looking to use.

Likely more important is that you should focus on higher timeframes, as opposed to lower timeframes, when you are starting to trade. It will then feel as if the market is moving more slowly and this is how you want to start reading the charts, as opposed to watching a lot of candles being completed every 5 minutes and taking a whole lot of trades.

Which instruments are good kind of depends on how the markets 'behave' and move - avoid choppy one and look for ones that make nice clean moves. Thus, at this point in time, instruments to look at would be the US indices which have been trending nicely on 4H/D/W, you can also look at Gold and Oil on 4H where they look relatively clean.

It's also important that you have a basic grasp of what key fundamental factors drive each market.

Hope that helps.

 

[timsk]

. . . What in your opinion would be the easiest and the hardest markets for a beginner to learn to trade? . . .

Hi Nowler,
Top drawer answer from George; I concur 100% with his post. I would add the following . . .

The idea that one market is easier to trade than another is a false one. If this mythical market existed, then everyone would naturally gravitate towards it in search of easy profits. After all, only trading masochists would deliberately seek out treacherous markets that are notoriously difficult to trade! The misunderstanding arises because it’s not uncommon for traders to post that one market is indeed ‘easier’ to trade than another. However, what they really mean by this (but seldom state) is that for them personally, one market is easier to trade than another. Remember: this is their reality - your reality may be very different!

More generally, there are two common errors that new traders tend to make when setting about deciding which market(s) to trade. The first is to overlook it completely and avoid making a choice at all, trading indices one day, forex the next and commodities like coffee, pork bellies and oil the day after that. Big mistake: don’t do it! There is enough to learn as it is, without having to get one's head around all the characteristics, influences and nuances of lots of different markets. By all means look at different markets and understand how they are correlated and impact one another. That’s highly recommended; just don’t trade them all! Only trade one market or, at a pinch, two at the most.

The second common error is to jump on the latest band wagon, without first exploring all the alternatives. As of today, that band wagon is forex. Like moths to a flame, newbies flock towards forex. When asked why, they give answers they’ve been fed by the very people who have a vested interest in them trading forex. The combined weight of the entire retail trading industry is focused on driving newbies towards forex. New traders would do well to reflect on this and answer this question: who benefits the most from all of this - me or them?
Tim.

 

[Tytus_Barnowl]

Easiest?, join up with a social trading crowd on facebook or similar and follow the inspired guruesque leader having a hoot of a time on the way.
Hardest? Pick 4 different assets, back test manually their daily /weekly moves, find a price action broker with guaranteed spreads, develop a strategy to enter and exit the markets having researched the indicators you intend to use in full, then according to your written trading plan start trading the chosen market.
Do you want to have an easy fun time or make money by hard effort?

 

[timsk]

. . .Do you want to have an easy fun time or make money by hard effort?

Hi T_B,
What's your experience of the "easy fun time" social/copy trading route? Does it work for you and, if so, how long have you been doing it for and what are your tips for success?
Tim.
PS. T_B - if you're planning to reply, rather than doing so here on Nowler's thread, I've started a bespoke thread on this topic - so please post there instead: Social / Mirror / Copy Trading: what are your experiences and views?
Thanks.

 

[korthdoesit]

Forex didnt move much since 2008 - no Volatility, very hard to make money these days.

Stock-Markets are so bullish - at the moment very easy to trade.

 

[Nowler]

Thanks for the answers folks!

I realise that what might be good for the goose may not also be good for the gander. I just like to get different perspectives on things as it helps me form a better understanding.

I've been finding this month very difficult and it's made me reconsider where I am, where I am going and what I'm doing. There was a sweet spot about 3 months ago that I felt I was in but now I am after confusing myself with stuff I have been learning in the meantime and my trading results show it.

It's funny one of you mentioned to move back out to the higher TF's because that's where I was feeling good about trading. Then I started paying more attention to fundamentals and soon after I began moving down the TF's, down to 1-5min.

If I can't pull myself out of this rut by the end of the month then I am going to take a week or 2 out from trading. Just to recalibrate. As of now such a break would still see me doing some reading, but I am not looking at charts until my mind settles a bit.

Maybe I am trying to keep on top of too many economies... but I see others here able to just swan in and out of a similar amount of markets and I thought I could do it too. I was trading anything and everything! But the thing is, it was all technical! I dropped down in the number of markets significantly but I increased my workload as a result of trying to understand the fundamental drivers behind these.

As of late I predominately trade AUD, CAD, EUR, GBP, JPY, NZD, and USD crossover's. Before I would also trade the likes of CHF, SGD, HKD, CHN, etc... but as I said before, back then my analysis was basically all technical analysis and as well as searching through charts for opportunities, I would also have a Market scanner identifying 80+% opportunities for me also. Kinda like a personal assistant.

I took a break before for about 8-9 days and when I came back I was refreshed. So perhaps I can do the same again.

 

[options-george]

Thanks for the answers folks!
....

Great detailed reply.
You shared a lot of insights there.

Based on this info, I'd suggest to stop trading as of today - the markets have already decreased in volatility and volume and will only do more so as they head into xmas.

The central bank decisions today and tomorrow are the last remaining key risk events and after that it will likely be quite flat. Trading conditions can easily kill trading records regardless of timeframe.

The higher the timeframe, the more markets you should be able to watch comfortably. If you are doing 5min then you should probably do 3-4 max, no more.

It sounds like you were comfortable with the higher timeframes and with the technical approach that you developed - that's where you hit your sweet spot. Keep what works - there's no need to go down to lower timeframes (other than to succumb to natural human desires for lots of activity) and you probably don't need to understand the fundamentals to the degree that you have studied them.

You could spend between now and the start of 2018 testing your strategy in ForexTester (or some other simulator) and review your trades and recap. That's probably a much better investment of time than actually putting on trades during this time.

Good luck out there.

 

[Nowler]

Great detailed reply.
You shared a lot of insights there.

Based on this info, I'd suggest to stop trading as of today - the markets have already decreased in volatility and volume and will only do more so as they head into xmas.

The central bank decisions today and tomorrow are the last remaining key risk events and after that it will likely be quite flat. Trading conditions can easily kill trading records regardless of timeframe.

The higher the timeframe, the more markets you should be able to watch comfortably. If you are doing 5min then you should probably do 3-4 max, no more.

It sounds like you were comfortable with the higher timeframes and with the technical approach that you developed - that's where you hit your sweet spot. Keep what works - there's no need to go down to lower timeframes (other than to succumb to natural human desires for lots of activity) and you probably don't need to understand the fundamentals to the degree that you have studied them.

You could spend between now and the start of 2018 testing your strategy in ForexTester (or some other simulator) and review your trades and recap. That's probably a much better investment of time than actually putting on trades during this time.

Good luck out there.

Thanks mate!
Some very helpful advice in there and you've just provoked a thought...

Is there something I can read to understand even just crude market cycles in volatility and volume on a yearly basis (such as a Christmas slow-down). Perhaps there's certain cycles that happen on a weekly or monthly basis perhaps?

This is my first December trading, so all this holiday related activity is all new to me.

FYI, this question is in regards to FX and Oil/Nat Gas but if anyone can expand it to other markets then I would be immensely grateful!

PS: If the trading conditions are only going to get more difficult between now and '18 then I probably should just give trade executions a break for a while...it fits in with the 2 week or so break that I feel I may need anyway.

 

[options-george]

Thanks mate!
Some very helpful advice in there and you've just provoked a thought...

Is there something I can read to understand even just crude market cycles in volatility and volume on a yearly basis (such as a Christmas slow-down). Perhaps there's certain cycles that happen on a weekly or monthly basis perhaps?

This is my first December trading, so all this holiday related activity is all new to me.

FYI, this question is in regards to FX and Oil/Nat Gas but if anyone can expand it to other markets then I would be immensely grateful!

PS: If the trading conditions are only going to get more difficult between now and '18 then I probably should just give trade executions a break for a while...it fits in with the 2 week or so break that I feel I may need anyway.

You are very welcome. Hope it's helpful.
Yes, heading into xmas tends to, on average, be tighter and choppy markets so good to stay away from them.

So, yes, a break would be a really good idea

I can't point you in the direction of reading re crude markets - however, rather than seek to understand why certain cycles occur re volatility and volume, it might be more useful (and easier and more fun) to complete your own research as to average volatility levels and volume levels given time of the year. You could look at ATR & volume as a starting point, and also look at ADX (a trend strength indicator) to get idea of typical levels depending on month. You could do this for a quite a few markets in the space of a couple of weeks.

I'd also suggest to think about typical transactions costs in your trading, and how they compare to the volatility levels and also how they change proportionally depending on the timeframe that you are trading.

I have blogged quite a bit about the role of transactions on my blog - so might be some simple reading to get you started.

 

[Nowler]

You are very welcome. Hope it's helpful.
Yes, heading into xmas tends to, on average, be tighter and choppy markets so good to stay away from them.

So, yes, a break would be a really good idea

I can't point you in the direction of reading re crude markets - however, rather than seek to understand why certain cycles occur re volatility and volume, it might be more useful (and easier and more fun) to complete your own research as to average volatility levels and volume levels given time of the year. You could look at ATR & volume as a starting point, and also look at ADX (a trend strength indicator) to get idea of typical levels depending on month. You could do this for a quite a few markets in the space of a couple of weeks.

I'd also suggest to think about typical transactions costs in your trading, and how they compare to the volatility levels and also how they change proportionally depending on the timeframe that you are trading.

I have blogged quite a bit about the role of transactions on my blog - so might be some simple reading to get you started.

Cheers mate.

I think I will cut right back on my trading for the next few weeks and just map out a few things. As you mentioned, ATR, Volume etc...
I have been going almost constantly since May, the break might be good in more ways than I'm aware of.

I'll check out the blogs too, I'm always looking for more information.

 

[NVP]

Hey folks,

What in your opinion would be the easiest and the hardest markets for a beginner to learn to trade?

For example, where would the majors of FX rank compared to Oil and Gas of the commodities?

Thanks

they are all equally hard to the inexperienced and new trader

 

[NVP]

Easiest?, join up with a social trading crowd on facebook or similar and follow the inspired guruesque leader having a hoot of a time on the way.
Hardest? Pick 4 different assets, back test manually their daily /weekly moves, find a price action broker with guaranteed spreads, develop a strategy to enter and exit the markets having researched the indicators you intend to use in full, then according to your written trading plan start trading the chosen market.
Do you want to have an easy fun time or make money by hard effort?

social trading ? ............having a hoot ?

my advice on those sites is join and have a laugh....... but dont take them seriously ......and leave real trading to professionals

N

 

[tomorton]

Forex didnt move much since 2008 - no Volatility, very hard to make money these days.

Stock-Markets are so bullish - at the moment very easy to trade.

Agree with your second statement.
But your first one makes me wonder what has been your experience to support such a radical conclusion.

 

[korthdoesit]

Agree with your second statement.
But your first one makes me wonder what has been your experience to support such a radical conclusion.

I was never much of a Forex Trader but I know some people who are and they told me. Just by looking at the currency charts of the last 15 years and the VIX I can easily support this €/USD for example has been a good ride between 2002-2009, but since then its been way harder to make money trading these.

 

[tomorton]

I was never much of a Forex Trader but I know some people who are and they told me. Just by looking at the currency charts of the last 15 years and the VIX I can easily support this €/USD for example has been a good ride between 2002-2009, but since then its been way harder to make money trading these.

Hard to believe making money from trading forex has ever been easy. Blaming reduced VIX for reduced gains doesn't seem like the full picture - like blaming the dry weather for the lack of rain. Unless they were trading the VIX.

 

[mpups]

The higher the timeframe, the more markets you should be able to watch comfortably...

this is a good point Mr George, thank you for your post