Beat the odds in forex trading – igor toshchakov. part i. chapter 1

PART I
Recommendations
To Novice Traders
Before conducting his first transaction on the real FOREX market,
Novice traders should spend some time familiarizing themselves
With this business, learning and also psychologically preparing for
Participation in real trading. This initial stage can be divided into five
Steps:
1. Theoretical preparation and learning.
2. Choosing and acquiring the charting and analytical software, and
Sources of current market information (data vendors).
3. Developing practical skills and using acquired theoretical knowledge; de-
Veloping trading techniques and skills as well as trading strategies and
Systems, on the virtual trading account under real market conditions.
4. Choosing the dealer or the broker company.
5. Defining the size of the investment capital and opening a trading
Account.
You should understand that the learning process could be more effec-
Tive and mutually enjoyable if you accept some of my preliminary advice
And recommendations. These tips are related to the preliminary self-training
That you have to conduct so you can better absorb the learning material.
Therefore, the first part of the book is focused on general recommendations
For novice traders.3
CHAPTER 1
How to
Get Started
T
He largest part of the theoretical materials regarding the FOREX mar-
Ket – including the main aspects of the theory of fundamental and
Technical analysis and also the general information – is not included
In this book. The theory of speculative currency trading can be studied us-
Ing the existing special literature. Before starting to study my trading
Method, you must familiarize yourself with basic issues of the business in
Which you are attempting to participate or are already participating. Be-
Cause my trading method is

different from the others that I call traditional
Ones, the theoretical preparation for my students has to have a specific
Character. For preliminary preparation on the trade theory, I recommend
Studying the following four issues:
1. History and development of the FOREX market.
2. Currency market participants, their roles and mutual relationships in
The process of trade.
3. Technology and terminology of speculative currency trade.
4. General principles of fundamental and technical analysis.
The main efforts should be focused on studying the technical analysis
Key issues. The main focus should be on the following two subjects: Support
And Resistance Theory and Retracement Theories (Dow and Fibonacci). My
Method uses only a relatively small part of the general theory of technical
Analysis and virtually does not employ fundamental analysis at all. However,
I do not think it will hurt you to gain some knowledge of subjects that you
Ccc_beat_003-006_ch01.qxd 6/8/06 2:31 PM Page 3will most likely not need in the future. On the contrary, this knowledge
Should help you not just with better understanding of the offered method but
Internal market tendencies as well.
INFORMATION, DATA FEED, AND TECHNICAL SUPPORT
I don’t have any special or particular requirements for computer software,
Charting programs, or data sources of real time and delayed market
Quotes and other data. Moreover, my trade method requires only minimal
Data means. That’s why any service (even the cheapest one) delivering
Real-time market data might be sufficient. It has to have the ability to cre-
Ate charts, a set of main technical indicators, and a minimum set of
Graphic tools for drawing trend lines, support, and resistance lines. As far


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Beat the odds in forex trading – igor toshchakov. part i. chapter 1