Automatic Forex Trading Software

Mark McRae, interviewed by the trader David Jenyns outlines how he thinks a beginner should start his professional trading career and set trading goals.

Mark: My first market was a Forex market, and I was taught how to trade a five-minute chart. And I think that was totally wrong. Now, and also with indicators — and I think that, number one, I don’t think anybody should trade very small time frames, unless they are very experienced, or they are that way inclined, because if you trade — and I am thinking of myself now, and I am thinking of virtually every single person I know of who has sat down at a screen — the Forex market during the week is 24 hours, so you can sit there as a five-minute trader and be there 24 hours.

And true enough — it becomes ridiculous — you can be there for 24 hours solid, or just roll it over, — you begin to see things in a five-minute chart that aren’t actually there, because you’re so close to the market. And also because you are on the hard-right edge, you have to be able to step away from it. So my advice for beginners is to start with much larger time frames — daily charts, weekly charts. I don’t think monthly charts are practical, but nothing lower than a four-hour chart, because it gives you time.

Also, it’s fantastic, you are trading five-minute charts. You sit there for hours on end, waiting for a setup or whatever, and then when it happens, you feel rushed. All of a sudden, the elastic band has hit. I think it is very practical and good for your traders, especially when they are beginning their professional trading, to be able to move away from the market and make a decision, make a trade, and then step back without any pressure of time.

Also they must allow the market to tell them what is happening, because nothing will beat your eyes. There is no indicator, if you are going to be in the technical side of the market and not the fundamental side, is price-driven, so the price will determine, and tell you everything you need to know about the market. The indicators follow — or every system you do will follow that, so it’s all supply and demand. You have to keep it as simple as possible, particularly when you start.

David: I love hearing these common themes. It really echoes a lot of what I talk about, those core themes that you have. Keeping it simple, the time frames and having a trading plan.

Mark: I think also in terms of price, if you think of price actions for professional trading, it takes a while to become familiar to recognize a good setup.