Forex

Each trader needs to start with a historical database and update it daily. In the
old days, both had to be created manually. Now historical data for any given
market costs less than a dollar per month, and updates are cheap. It takes less
than a minute to update a dozen markets by modem, using your regular
phone line. There are many reliable databases offering a variety of stock,
currency, futures, and options data.
Some traders collect their data around the clock. They use satellite dishes,
FM receivers, and dedicated phone lines. Real-time data is necessary for
day-trading, but not for position trading.
Position traders enter and exit positions within days or weeks. Day-traders
enter and exit trades within a few hours if not minutes. You need to become a
competent position trader before you can day-trade. You can compare position
trading and day-trading to playing a video game at level one or level nine. You
run the same mazes and dodge the same monsters, but the pace of the game is
so fast that at level nine your reactions must be almost automatic. If you stop
to think, you are dead. Learn to analyze the markets and trade at level onelearn
to be a position trader before attempting to day-trade.
When you buy historical data, it pays to cover two bull markets and two
bear markets. Starting to analyze a new market, I usually review a monthly
chartbook covering 20 years of trading to see whether the market is historically
high or low. I buy three to five years' worth of weekly data and one
year of daily data.
When you begin using a computer, focus on six or fewer markets and add
more later. For example, you may follow Treasury Bonds, Standard & Poor's
500, gold, and Japanese Yen or the German Mark. Change this list if you
want to follow agricultural or industrial markets. Choose a few technical
indicators, and run them daily on each market. After you learn them well,
add new ones. I use a battery of 10 or 12 indicators at any given time, plus
one new indicator. I watch it for several months and compare its signals to
others. If it proves useful, I add it to the standard package.