Trading Lesson: Introduction

One of the subjects I am learning about is how to read charts.  Patterns form on a stock or currency's chart that can help give you an indication of what direction the price might be heading.  Knowing where the price MIGHT be heading is not enough, however, if you don't know how to trade it.  That is what Trading Lessons will cover.

I am currently using the School on BabyPips.com to do my research.  This is where the majority of my pictures and information will come from.  The school takes you through all levels of trading, from the basics to more advanced levels.  As I find interesting articles about trading, I will write about them.  The goal is to not only become great at charting, but also at trading, which will help me make money instead of losing it.

Many books and articles will lead you to believe that there is one way to trade.  You place a fixed amount of your money on a trade, set your stops at a specific place, and your sell order at another.  For professional traders who make their money by making a lot of trades and hoping for a specific return at a specific rate, this probably works.  This is not what I'm trying to accomplish, however.  I am not the type of person who could trade professionally, so my type of trading is different.  As of right now, I do not have the time to carefully watch charts all day to find the best possible entry, execute, and then wait for the best possible exit.  What I can do is look at charts periodically, find patterns setting up, and enter at a reasonable time.  I like to think of it as more of a hobby since it is actually entertaining for me.  Like my other hobbies, this one can make me money if I do it properly.

Trading as a hobby is still no excuse to lose money.  Hobbies should be fun, and making money is fun.  I would like to approach this hobby in the same way that geniuses approach their areas of expertise, by thinking outside the box.  Trading is an art, not a science, so I would like to do it my way.  This does not mean just the opposite of what conventional wisdom says a pattern means, but adapt all of the things I learn and treat each situation differently.  In order to adapt, however, I must first learn the basics and go from there.  My future posts will go in order from the BabyPips.com school's lessons.  Once basics are learned, I will then be able to practice trades in many different forms, and figure out what best works for me.