What should a beginner learn to trade first?

What should a beginner learn to trade first?
What would you recommend that a beginner learn to trade first and why?

I have some previous options experience, but not a lot. I am considering starting with E-mini's: specifically ES or maybe NQ. Or would Forex be the place to start? I figured that trying to learn too many different things at once would be counter productive.


Thanks for the help.


Steve

Hi Steve,

welcome abord, here is a thread where u can start to look for some beginner advice https://futures.io/beginners-introdu...endations.html

Personally I think you should learn how to trade the emini S&P 500. The reason being is that it's relatively cheap to trade in terms of commissons, it has tons of liquidity meaning you can easily trade at any price and there's no problem trading size once you get good. It also has good volatility, not to slow and not too fast.

Stay away from markets like crude oil until you're very experienced. Other markets such as t-notes, and the bund in Europe are very slow markets. They can be like watching paint dry, but if that's your thing then have a look at them too. Different strokes for different folks so to day.

Reply With Quote

I suggest E-minies too.

Forex is not regulated, the forex brokers are not interconected, so the claim that the forex market is the biggest in the world is not true. A forex broker can change you positions, not pay you the money, change the spread at will during news releases or night periods etc..

Do not start with leveraged instruments
I do not think that it is realistic for a beginner to trade E-Minis. E-Minis is one of the most competitive market places in the world, and as a beginner you can only lose out between the number of well-trained professionals. Also the leverage available for futures will magnify every mistake and your account will be wiped out quickly.

In the beginning, I would suggest not to use leveraged instruments, but to start with liquid stocks or exchange traded funds (ETF). It gives you the same feel for the market and the same technical rules apply.

Once you can profitably trade a non-leveraged ETF, it is time to switch to futures, which means increasing leverage. I would suggest to start with YM, TF or 6E. As a small trader you do not need the deep liquidity of ES, but will fare better the smaller brothers, as they show a better trending behaviour and are more suited for smaller traders -> also see Comparing Index Futures thread.

So in my opinion, to start with E-Minis means deliberately asking for trouble.

Last edited by Fat Tails; October 31st, 2010 at 01:03 PM.