Forex n00b questions

Discussion in 'Chit Chat' started by mikefitz, Dec 19, 2006.

  1. mikefitz


    Hello, I am posting this in the Chit Chat forum so I do not bother our career investors who spend time in their respective forums.

    I am a young guy looking at playing around with Forex; I have no formal education in economics/investing but I do have some free time between semesters with nothing better to do at my internship. What I would like to do is learn how to anticipate to some (small) degree the increased or decreased value of an investment based soley on currency movements. I would like to understand the mechanics behind the buying of one currency and selling of another.

    Now, I am not foolish enough to drop $1k into a FX account without learning the ins and outs of the market. What I've done is setup a Free Demo Account at cms (only free demo with no time constraints) and downloaded their visual trading software to get a feel of how shit works. I would like clarification on a few things, however:

    1. pips - how are these calculated? I understand they differ from currency to currency...
    2. candlestick chart type - is a bar that shows trading range for the day, opening/closing prices. Are there better chart types?
    3. i need a good strategy, or some structure to follow. obviously, buy as much as possible when an upward trend is detected. set a stop loss -1%. Assumption here is that more often than not the trend will continue for a short period of time, netting me a healthy profit. Good idea?

    Basically I'm just looking for ways to mess around with this demo software and learn a thing or two over christmas break. Look forward to your responses!
  2. mikefitz