Forex help needed

[fahad]

Hi,

I am new to forex trading. Currently I am practicing in MT4 demo account. I have a few questions.

1. When we place an order, a new window opens. On its left side, two lines are moving - one red and other blue. I have figured out which one is for buy order and which one for sell order. But I am confused about the price movements (moving average, candlesticks) shown on the main currency pair chart. What do these movements represent? the quote currency buying pattern, the selling pattern or the simple average of buy and sell prices? Try to explain them in the context of before & after placing an order and when closing the open position.

2. No matter if I am placing a buy order or sell order, my open position shows a loss right after placing an order and it doesn't seem to turn into profit, rather the gap keeps on widening. I get confused from this as to whether the qoute currency is appreciating or depreciating against the base currency. What am I doing wrong here?

3. In demo account of MT4, after placing an order, when i try to modify it, the pips adjustment cells are active, but the main button for applying the stop loss, take profit and trailing stop is always disabled/inactive. Hence, I dont see the results of these three functions. What to do about this?

4. How do I know when is the right time to place a buy or sell order i.e. what is the simplest and best way to spot an uptrend or downtrend?

5. How do I identify a ranging/volatile market condition from reading the chart? Are there any tools available in MT4 for this?

I will appreciate help of more experienced traders here.

 

[Enivid]

1. Candlesticks represent the price movements of the currency pair during a period. They show the price level when period opened, its highest point, the lowest point and the closing level. Moving averages (if applied to close levels) shows the moving average of the close candlesticks' close levels over certain number of candlesticks.

2. The initial loss is from spread. As you buy at Ask, you can only sell at Bid and there is always a Bid/Ask spread, which results in that initial loss. If the loss increases, it means that you did not guess the direction of the price movement.

3. The "Modify" button becomes enabled when you enter some correct values in the SL/TP fields. Some brokers do not allow setting SL/TP too close to entry price.

4. That is a million dollar question .

5. It is very easy to tell if the chart is ranging or trending without any tools. Just look at the chart. If it is clearly going up or down, it is trending. If it is mostly horizontal, it is ranging.

 

[fahad]

thanks for your help, but something more about my first question. I converted the chart into a line chart and removed the moving average indicator. Now which prices does this line represents - the ASK price variations or the BID price variations or the Average or bid-ask prices for the currency pair?

 

[Easy Trader]

MT4 you are looking at the BID price. You can change it to see the ASK price also. (cursor in middle of chart)(right click on mouse)(properties)(common)(show ask price). I would suggest to use candle or bar charts, those charts have alot more information then just a line chart and will most likely get you closer to figuring out your #4 question.

 

[Enivid]

thanks for your help, but something more about my first question. I converted the chart into a line chart and removed the moving average indicator. Now which prices does this line represents - the ASK price variations or the BID price variations or the Average or bid-ask prices for the currency pair?

The line chart is drawn on Close prices of the given periods. If you are looking at Daily chart, the line is drawn through daily Close levels.

 

[Fxpipper]

You may also want to check out baby pips school of pipsology, it has all the info you need and much more. And yes, second enivid's reply - close quotes for that specific point in time.

 

[krecex]

Youtube also can teach you from the basic.

 

[ituglobal]

Don’t despise the days of your little beginning. Though your beginning may be small, your latter end shall greatly increase. Your background may be humble. What you’ve now may be very insignificant, but it’s very imperative that you concentrate on being the best trader you can be, then your latter end shall be increased greatly. Your potential in trading is limitless and can’t be determined by opinions of others.

 

[Rambo35]

Don’t despise the days of your little beginning. Though your beginning may be small, your latter end shall greatly increase. Your background may be humble. What you’ve now may be very insignificant, but it’s very imperative that you concentrate on being the best trader you can be, then your latter end shall be increased greatly. Your potential in trading is limitless and can’t be determined by opinions of others.

I am not sure how this answered the OP question, but at least you gave something of a motivational speech.

 

[Fxpipper]

Well, when it comes to one's potential as a trader, that is rarely determined by the opinion of others - rather your win/loss determines whether you are a great trader or not..but yes, nice motivational reply.

 

[mumuy]

you can try using support and resistance strategy, your previous day high will be your resistance and your previous low will be your support.

 

[Rambo35]

you can try using support and resistance strategy, your previous day high will be your resistance and your previous low will be your support.

This rarely works and will not be profitable in the long-run.

 

[KenMacLennan]

Hi,

I am new to forex trading. Currently I am practicing in MT4 demo account. I have a few questions.

1. When we place an order, a new window opens. On its left side, two lines are moving - one red and other blue. I have figured out which one is for buy order and which one for sell order. But I am confused about the price movements (moving average, candlesticks) shown on the main currency pair chart. What do these movements represent? the quote currency buying pattern, the selling pattern or the simple average of buy and sell prices? Try to explain them in the context of before & after placing an order and when closing the open position.

2. No matter if I am placing a buy order or sell order, my open position shows a loss right after placing an order and it doesn't seem to turn into profit, rather the gap keeps on widening. I get confused from this as to whether the qoute currency is appreciating or depreciating against the base currency. What am I doing wrong here?

3. In demo account of MT4, after placing an order, when i try to modify it, the pips adjustment cells are active, but the main button for applying the stop loss, take profit and trailing stop is always disabled/inactive. Hence, I dont see the results of these three functions. What to do about this?

4. How do I know when is the right time to place a buy or sell order i.e. what is the simplest and best way to spot an uptrend or downtrend?

5. How do I identify a ranging/volatile market condition from reading the chart? Are there any tools available in MT4 for this?

I will appreciate help of more experienced traders here.

Fahad, You sincerely need to take a beginner course in understanding the charts, (plenty are available) as the questions you are asking are the fundamentals. Just to get you started, the red and blue tick chart lines are the bid price and ask price, ask is always higher than the bid

 

[chongjasmine83]

Before you trade live, practise with demo account until you make a profit and know how to use the trading platform well.

 

[fargana]

Before you trade live, practise with demo account until you make a profit and know how to use the trading platform well.

Yeah it should remove all such silly questions, lol

 

[Alexzander]

Welcome to Forex trading! Here’s a quick rundown to help you out:

- Price Movements: The chart shows the price movements of the currency pair. Candlesticks represent the opening, closing, high, and low prices within a specific time frame. These reflect the buying and selling pressures in the market.

- Immediate Losses: The initial loss is due to the spread—the difference between the buy (ask) and sell (bid) prices. The market needs to move in your favor by at least the spread for your trade to become profitable.

- Stop Loss/Take Profit: In MT4, make sure you set the stop loss and take profit levels far enough from the current price. The button might be inactive if your settings don’t meet the platform’s requirements.

- Spotting Trends: Look for higher highs and higher lows for an uptrend, and lower highs and lower lows for a downtrend. Simple moving averages (SMA) can also help identify trends.

- Ranging Markets: A ranging market occurs when prices move sideways within a range. Bollinger Bands or the Relative Strength Index (RSI) can help spot these conditions.

Hope this helps! Feel free to ask more questions as you progress.

 

[Zerologic]

Every open entry sees a loss of position is normal, the broker takes profit from the spread, the difference between bid and ask. But maybe it could happen after the open trader sees that the floating profit and loss is 0 if the timely execution of the order gets zero spread.

 

[Amy4]

Every open entry sees a loss of position is normal, the broker takes profit from the spread, the difference between bid and ask. But maybe it could happen after the open trader sees that the floating profit and loss is 0 if the timely execution of the order gets zero spread.

Yep, totally normal due to the spread. Some brokers offer zero spreads or fixed ones—ever tried those? They might help minimize the initial loss.

 

[Zerologic]

Yep, totally normal due to the spread. Some brokers offer zero spreads or fixed ones—ever tried those? They might help minimize the initial loss.

Brokers who offer fixed spreads usually have a higher spread value, for example, in EURUSD it is 3, while brokers with variable spreads are usually ECN or STP brokers, ECN brokers tend to have tighter spreads depending on market liquidity. I think both have advantages and disadvantages, depending on which trader chooses. I use a variable spread broker, and trading in the busiest sessions such as the London session usually gets tighter spreads.