Enter the email address you signed up with and we'll email you a reset link. Need an account? Click here to sign up. Download Free PDF. Forex for Beginners: How to Make Money in Forex Trading Currency Trading Strategies. Rajiswaran Muniandi. Continue Reading Download Free PDF. Related Papers. How To Trade Dollar. Download Free PDF View PDF. All rights reserved. Table of Contents 1. Making Money in Forex Trading 2. What is Forex Trading 3. How to Control Losses with "Stop Loss" 4.

How to Use Forex for Hedging 5. Advantages of Forex Over Other Investment Assets 6. The Basic Forex Trading Strategy 7. Forex Trading Risk Management 8. What You Need to Succeed in Forex 9. Technical Analysis As a Tool for Forex Trading Success Developing a Forex Strategy and Entry and Exit Signals Thousands of people, all over the world, are trading Forex and making tons of money. Why not you? All you need to start trading Forex is a computer and an Internet connection.

You can do it from the comfort of your home, in your spare time without leaving your day job. And you don't need a large sum of money to start, you can trade initially with a minimal sum, or better off, you can start practicing with a demo account without the need to deposit any money.

Once you consider to start Forex trading, one of the first things you need to do is choose a broker, choosing a reliable broker is the single most critical factor to Forex success. There are dozens of online brokers out there but your best bet is to go with one of the leaders.

Here are 2 online brokers that are reputable and are most suitable for beginners and pros alike: 1. Forex Inc - The best broker for US residents If the link doesn't work, copy and paste the following URL into a browser: www. eToro - accepts worldwide traders except US residents If the link doesn't work, copy and paste the following URL into a browser: www.

Now I would strongly encourage you to go and visit these broker's sites right now even if you are not yet decided whether you want to go into Forex trading. because each provides tons of free education materials, videos and best of all a demo account that allows you to practice Forex trading for free without the need to deposit any money. Simply go to each of these brokers, register for a free demo account and start "trading" - by actually practicing and experiencing it firsthand you'll be able to decide whether Forex trading is for you.

In any case, before starting to trade for real, it is advisable that you practice with a demo account. Once you build some skill and feel more comfortable with the system you can start trading gradually for real money. Now which of the two brokers you should choose? while both are reputable and reliable they do have some differences.

For starter if you are a US resident you should choose Forex Inc, as eToro does not accept US residents. Here is a summary of the specific advantages of each of them. Choose based on your personal preferences: Forex Inc www. It has several different account levels that make it easy for anyone to open an account. Forex Inc is an excellent broker suitable for beginners and pros alike.

eToro www. You can also communicate with other traders including the top traders. What is Forex Trading Foreign exchange, popularly known as 'Forex' or 'FX', is the trade of a single currency for another at a decided trade price on the over-the-counter OTC marketplace. In essence, Forex currency trading is the act of simultaneously purchasing one foreign currency whilst selling another, mainly for the purpose of speculation.

Foreign currency values increase appreciate and drop depreciate towards one another as a result of variety of factors such as economics and geopolitics. The normal objective of FX traders is to make money from these types of changes in the value of one foreign currency against another by actively speculating on which way foreign exchange rates are likely to turn in the future.

In contrast to the majority of financial markets, the OTC over-the-counter currency markets does not have any physical place or main exchange and trades hours every day via a worldwide system of companies, financial institutions and individuals.

Because of this, currency rates are continuously rising and falling in value towards one another, providing numerous trading choices. One of the important elements regarding Forex's popularity is the fact that currency trading markets usually are available hours a day from Sunday evening right through to Friday night.

Buying and selling follows the clock, beginning on Monday morning in Wellington, New Zealand, moving on to Asian trade spearheaded from Tokyo and Singapore, ahead of going to London and concluding on Friday evening in New York. The fact that prices are available to deal hours daily makes certain that price gapping whenever a price leaps from one level to another with no trading between is less and makes sure that traders could take a position each time they desire, irrespective of time, even though in reality there are particular 'lull' occasions when volumes tend to be below their daily average which could widen market spreads.

Forex is a leveraged or margined item, which means that you are simply required to put in a small percentage of the full value of your position to set a foreign exchange trade. Because of this, the chance of profit, or loss, from your primary money outlay is considerably greater than in conventional trading. Currencies are designated by three letter symbols. The first currency is the base currency and the second currency is the quote currency.

The price, or rate, that is quoted is the amount of the second currency required to purchase one unit of the first currency. As we see, the US dollar is represented in all currency pairs, thus, if a currency pair contains the US dollar, this pair is considered a major currency pair.

Pairs which do not include the US dollar are called cross currency pairs, or cross rates. One of the most interesting movements in the Forex market involving the British pound took place in the September 16, That day is known as Black Wednesday with the British Pound posting its biggest fall.

the US dollar currency pairs. The general reasons for this "sterling crisis" are said to be the participation of Great Britain in the European currency system with fixed exchange rate corridors; recently passed parliamentary elections; a reduction in the British industrial output; the Bank of England efforts to hold the parity rate for the Deutschemark, as well as a dramatic outflow of investors.

At the same time, due to a profitability slant, the German currency market became more attractive than the British one.

All in all, the speculators were rushing to sell pounds for Deutschemarks and for US dollars. As a result, the pound returned to a floating exchange rate. Another intriguing currency pair is the US dollar vs. It is traded most actively during sessions in Asia.

From the mid 80's the Yen ratings started rising actively versus the US Dollar. In the early 90's a prosperous economic development turned into a standstill in Japan, the unemployment increased; earnings and wages slid as well as the living standards of the Japanese population. And from the beginning of the year , this caused bankruptcies of numerous financial organizations in Japan.

As a consequence, the quotes on the Tokyo Stock Exchange collapsed, a Yen devaluation took place, thereafter, a new wave of bankruptcies among manufacturing companies began. The above started an Asian crisis in the years that led a Yen crash. It resulted in a tumble of the Yen-US dollar pair from Yens for one US dollar to The global economic crisis touched almost all fields of human activities.

Forex currency market was no exception. Though, Forex participants central banks, commercial banks, investment banks, brokers and dealers, pension funds, insurance companies and transnational companies were in a difficult position, the Forex market continues to function successfully, it is a stable and profitable as never before.

The financial crisis of has led to drastic changes in the world's currencies values. During the crisis, the Yen strengthened most of all against all other currencies.

Neither the US dollar, nor the euro, but the Yen proved to be the most reliable currency instrument for traders. One of the reasons for such strengthening can be attributed to the fact that traders needed to find a sanctuary amid a monetary chaos. Ask and Bid When traders want to place an order on the Forex market they should be aware of the currency pair as well as the price of this pair. A Forex market price of a currency pair is denoted by two symbols, Ask and Bid, which have specific digital notations.

Consequently, a trader sells the currency standing second. Bid price is the lowest price in the quotation of the currency pair, at which a trader sells the currency standing first in the abbreviation of the currency pair. Respectively, a trader buys the currency standing second. Seem complicated? This means that you can buy 1 euro for 1. The difference between the Bid price and the Ask price is called spread.

The spread is actually the commission of the broker. The Spreads in Forex trading are actually very small compared to currency spreads at banks. A pip is the smallest price movement of a traded currency. It is very important that you understand what a pip is in the Forex trading because you will be using pips in calculating your profits and losses.. For most currencies a pip is 0. When a currency moves from a value of 1.

There is an exception for quotations for Japanese Yen against other currencies. For currencies in relation to Japanese Yen a pip is 0.

A lot is the minimal traded amount for each currency transaction. For regular accounts one lot equals , units of the base currency. However you can also open mini and micro accounts that allow trading in smaller lots. Understanding the Pip Spread - The spread is closely associated with the pip and has a major importance for you as a trader.

As mentioned above, It is the difference between the selling and the buying price of a currency pair. It is the difference in the bid and ask price.

The ask is the price at which you buy and the bid is the price at which you sell. In this case the spread is 3 pips. The pip spread is your cost of doing business here. In the case above it means you sustain a paper loss equal to 3 pips at the moment you enter the trade.

Your contract has to appreciate by 3 pips before you break even. The lower the pip spread the easier is it for you to profit. Generally the more active and bigger the market, the lower the pip spread. Smaller and more exotic markets tend to have a higher spread. Smaller accounts will generally have higher spreads than bigger regular accounts.

From the profitability point of view it is important to find a broker offering a lower pip spread, however the low spread is not everything.

More important is to choose a reputable and reliable broker. Most brokers will allow leverage. This can heighten profits and losses and should be used wisely. How to Control Losses with "Stop Loss" Stop loss is a widely used order aiming mainly at limiting the possible losses in case of negative market movements.

Stop loss is used only with open positions. When the market conditions are not favorable for a trader and the price has reached the level of the "Stop loss", the deal is closed automatically. Therefore, Stop loss helps the trader to control losses and in case of failures to keep safe at least part of his deposit. If a trader does not use Stop loss orders, the position is closed by the broker when the sum of losses is equal to the sum of the deposit.

There are 3 types of Stop loss orders: fixed Stop loss, sliding Stop loss and combined Stop loss. Fixed Stop losses are set while opening positions. They cannot be changed until the deal is closed. Sliding stop losses, on the other hand, can be modified any time depending on the price movement. Another name for sliding Stop loss is Trailing stop, that can be modified either manually or automatically based on the traders' settings.

There are many discussions on whether it is necessary to use Stop losses or not. Some traders believe that Stop loss is essential in trading, emphasizing the ability of Stop losses to prevent the loss of the whole deposit. If the price is rapidly moving in a direction which does not correspond to the forecast, a deal that has not been closed in time can result in a significant loss. The opponents of Stop loss believe that this order can limit not only losses, but profits as well.

In this case the position is closed prematurely with a loss while it could develop into a profit later on. As a rule, the decision on whether to use Stop loss or not depends on the individual strategy and preferences of a particular trader. Trailing stop is an order which its major function is to act as an automatic maintenance of an open position with continually shifting of the stop loss level depending on the price movement. A trader may open a bullish position and sets the gap from the current price to trailing stop in pips.

When the price goes upwards, the trailing stop follows it automatically sticking to the set gap. In case that the price goes down, then the trailing stop quote remains on the spot. In this way, a trader using a trailing stop has an opportunity to derive maximal profit at an ascending price with no regard to the set Take Profit value.

Furthermore, a trailing stop is a loss limiter. Here is an example: a trader opens a buy position at the price of 1. In case that the price starts to move upwards and exceeds the mark of 1.

If the price turns down, the price does not change its position. As to a sell position opening, trailing stop behaves quite in the opposite. The trader sets it a few pips higher. At a price descending motion the trailing stop shifts according to the set size. With the up-going price, the trailing stop does not move. While applying a trailing stop in Forex operations a trader will have to remove stop loss orders manually in line with increases in the trade profit.

Trailing stop sets a stop loss level automatically at the value the trader needs. A trailing stop is mainly used by traders who run trend trading, but can't follow the price moves continually. Trailing stop usage is also feasible at intraday trades, when quick reaction to price change is required.

Please note that trailing stops work only when the trading terminal is open. Once the terminal is switched off the stop loss is fixed at its current spot. How to Use Forex for Hedging Hedging denotes safety and security.

Hedging means the protection of a client's funds from unfavorable currency rate fluctuations. Account funds are fixed at their current price through conducting trades on Forex. Thus, hedging helps to ease exposure to currency rate changes risks, which helps to prevent the risk of currency rate fluctuations.

As a matter of fact, hedging presupposes using one instrument in order to lower the risk related to unfavorable market factors impact on the price of another one directly associated with it.

Hedging can also be considered as a type of investment allowing to minimize price movements risks in the market. The hedging cost should be valued with regard to the possible losses in the event of not hedging. Here's a hedging example: a trader, who imports in a foreign currency, opens a buy trade with the currency of his trading account in advance, and when the real time of the currency purchase arrives to his bank, he closes the position.

And a trader, who exports in a foreign currency, opens a sell trade with the currency on his trading account beforehand, and at a the real moment of this currency purchase in his bank, he closes it. Advantages of Forex Over Other Investment Assets 1.

Simple to comprehend and master - In a Forex trade we deal with just a pair of currencies 2. Low Minimum Investment - The Forex market requires less capital to start trading than most other markets.

The initial investment could go very low, depending on the leverage offered by the broker. This is a great advantage since Forex traders are able to keep their risk investment to the lowest level.

Online Forex brokers offer "mini" and "micro" trading accounts with low minimum account deposit. We're not saying you should open an account with the bare minimum, but it does make Forex trading much more accessible to the average individual who doesn't have a lot of start-up trading capital. Trading starts when the markets open in Australia on Sunday evening, and ends after markets close in New York on Friday. High Liquidity - Liquidity is the ability of an asset to be converted into cash quickly and without any price discount.

In Forex this means we can move large amounts of money into and out of foreign currency with minimal price movement. Low Transaction Cost - In Forex, typically the cost of a transaction is built into the price. It is called the spread. The spread is the difference between the buying and selling price. Leverage - Forex Brokers allow traders to trade the market using leverage.

Leverage is the ability to trade more money on the market than what is actually in the trader's account. Profit Potential from Rising and Falling Prices - The Forex market has no restrictions for directional trading. This means, if you think a currency pair is going to increase in value; you can buy it, or go long. Similarly, if you think it could decrease in value you can sell it, or go short..

No one can corner the market - The foreign exchange market is so huge and has so many participants that no single entity can control the market price for an extended period of time. Such a huge amount of a daily volume allows for an excellent price stability in most market conditions. This means you likely will never have to worry about slippage as you would when trading stocks or commodities. The price you see quoted on your trading screen is the price you get.

Market transparency and Instant execution - Market transparency is much greater in Forex than in stocks or commodities, this means it is easier to analyze the inner workings of the market and figure out what is driving it.

Instantaneous order execution is another great advantage Forex has over other markets. Retail Forex trading is generally done over the internet on all electronic platforms. The Forex market has no central exchange and was designed to be this way to facilitate large banks and allow for instant execution of transactions, this means no delays for you and extreme ease of execution.

Price movements are highly predictable in the Forex market - Due to its highly speculative nature Forex price movements tend to over shoot and then correct back to the mean. This means there are a number of repetitive patterns that are easily recognizable to the trader who is trained in price action analysis.

Forex currency pairs generally spend more time in very strong up or down trends than other markets, this is also a huge advantage because it is generally much easier to trade a strongly trending market than a chaotic and consolidating market. Now, if you were holding a futures position over night it is entirely possible that your stop got gapped around, in which case you would get filled at the next best price, which often will be extremely damaging to your trading account.

Direct participation, difficult to manipulate or influence - Forex trading operates in a decentralized online electronic market for its participants: Banks, FCMs, hedge funds, governments, retail currency conversion houses and high worth net individuals. Investors can interact directly with the market maker for pricing on a currency pair. Access is quicker and costs are lower than in other markets.

Large market liquidity makes it very difficult for any one participant to manipulate or influence it. Easier market analysis - Countries are more often stable than companies making it easier to predict their economic direction.

Primary factors affecting demand and supply for Forex investment are interest rates and economic indicators such as GDP, trade balances and foreign investment. This and other economic data released regularly determines demand and supply for currency pairs. Technology frontiers and investing - Technology enables the retail investor the ability to make better investment decisions through ready access to economic and political news events, to technical charting software and electronic trading platforms.

They also have transparent and safe access to their investment funds in segregated accounts so that the safety of their funds is guaranteed. Limited Risk - Despite the common perception about Forex being risky, it is easy to limit and reduce the risk if a trader chooses the right strategy. In addition it should be mentioned that stops are much easier to control as well, that is why newbies have good chances to succeed even while doing their first steps as Forex investors and traders.

No fees or middlemen - There are no commissions when trading on the Forex market. The retail brokers in this market are compensated through the bid-ask spread. Businessmen can also spot currency trading which eliminates the middlemen and allows each person to trade directly with the market that is responsible for pricing on a certain currency pair. Not only does this expedite the process, it gives each trader more options and versatility. The Basic Forex Trading Strategy The basic Forex strategy that is used by many traders of all experience levels, is Trend Following.

This strategy is widely followed because of its simplicity to identify and trade and many times, strong trends can bail you out of an imperfect set of buy and sell rules.

Before we delve into the basics of Trend Following, it is important to first explain why trend trading is a popular strategy used by many new and experienced traders. Do you have the perfect Forex trading strategy? I have not found it. To me, a perfect strategy is the one that wins all of the time and has minimal trade drawdown. Therefore, learning how to trade in an imperfect world is very important.

Trend following is a simple way to cover up some strategy imperfections by identifying the strongest trends in the market. When you trade in the direction of the trend, the rest of your trading approach can fall right into place. This doesn't mean that all your trades will be winners. Too much US Dollar exposure can lead to all your trades heading in the same direc- tion, a big problem if that direction is against you.

THE "EXOTIC" currency pairs are less traded and so much more costly to buy or sell. Leverage in Forex trading is all about entering borrowed capital into transactions. The money is borrowed from a broker who acts like a bank that fronts you some cash to invest, which in this case is to buy currencies.

This shows that the higher your leverage, the higher your chance of a better ROI. The stop loss order lets your broker know to sell a currency when it hits a certain set price. These stops work around the clock in the forex market, therefore, protecting your position when you are logged out of the system.

In addition, the strategic stop caps the losses while also protecting the profits. While the Forex market is open 24 hours a day, five days a week, trading is not always active during this entire time.

So it is essential that you know the crucial hours and days of forex trading when traders are the most active. As a result, there are three active and in the afternoon overlaps with main forex trading sessions you should the opening of the New York or American be aware of; the Tokyo or Asian session, session, so there can be good opportuni- the London or Eurpoean session and fi- ties to trade forex and make a profit.

Seasoned traders considered 10am EST The busiest times are when these ses- to be the best time to trade forex markets sions overlap, for example, in the early as during this time, traders in London and hours of the morning in London, the trad- Europe are preparing to close their positions ing session in Tokyo is just winding down.

and traders are getting ready to make a European traders are getting to their move in the American session. As the focus desks and analyse and digest information shifts from Europe to the US, this often cre- from the Asian trading session, so early ates big swings in currency prices, opening 6am GMT is a great time to make trades up opportunities to profit.

These days generally show the biggest movements in currencies as major data releases relat- ed to the economy are usually released on these days. Fridays are busy as well, but only until 12am. During the second half of Friday, movements can often be unpredictable since major banks, hedge funds and financial institutions will close some of their positions for safety reasons over the weekend.

Share now 🙅🏻 When NOT to Trade Forex? Also, novice traders should be very careful with the Asion sessions. Let's look at the three most popular types of forex charts: line chart, bar chart, and candlestick chart.

It is created by simply connecting the data points depicting the closing prices of certain periods with a line. Therefore, they can track its closing prices accurately. They are also called the OHLC charts in reference to the Open, High, Low and Close values of the currency under consider- ation. These charts are similar to bar charts only that they present the price information in an aesthetically pleasing graphic format. It also con- centrates more on the opening and closing prices of the trading period.

Even if you don't have time to stare at charts all day long, you can spot great trading opportu- nities by simply viewing the news and economic calendar on a daily basis. In other words, by performing fundamental analysis. Basically, all fundamentals are indicators of where investors intend to put their money and which currencies will be influenced as a result.

All the drivers are divided in 4 major categories: central banks, state economics, political stabili- ty and natural disasters. Politics Economics Central Banks Natural Disasters 👉 Public Statements 👉 GDP, inflation, debt 👉 Finance Circulation 👉 Hurricanes 👉 Change of Officials 👉 Sales amounts 👉 👉 Stability of governments 👉 Interest from investors 👉 Mandatory Reserve Funds 👉👉 Earthquakes Interest Rates Floods 💸 In the chart below you can see how the British Pound dropped because of the Brexit related events.

This was a great opportunity to make money shorting betting that it would decline the British Pound. ative for the associated currency since the price level is relatively higher than Since people possess skills, knowledge and inflation in other countries, diluting its experience, this human capital can be used value.

Therefore, employment data ed, where a lower rate of inflation translates releases have a substantial effect on ex- to an improvement in purchasing power. change rates. of that currency. unemployment rate should act to depress A high inflation rate discourages investment, the currency in question.

reduces the purchasing power of consum- ers and makes planning for the future more The most important employment data re- difficult. lease in foreign exchange markets is the US Non-Farm Payroll figures. Some other Conversely, a low and stable inflation rate important data releases are the unemploy- encourages investment, increases the pur- ment rate, participation rate and other labour chasing power of consumers and business- market statistics, all of which have a moder- es can plan for the future more easily.

ate to high impact on exchange rates. Share now 3 Trade balance 4 Quantitative easing Trade with other countries is a major part Quantitative easing is an unconventional of most economies and therefore the trade monetary policy tool that is used to expand a balance can affect the value of a currency.

goods and services, this will increase the demand for that currency and hence Money supply and inflation are linked, where its price. However, if an economy in- a higher money supply should translate into creases its imports over time, this in- higher inflation and lower purchasing pow- creases the selling pressure on that er.

The USA, Eurozone, Japan and the UK currency and it should depreciate over have all engaged in quantitative easing, with time. Also, the timing of their quantitative easing The trade balance is simply the ratio of programs has differed. If exports are higher than imports, then the country is said to have a trade surplus - in- cies to make trades on the forex market.

geared up for more quantitative easing. Also, the US Federal Reserve has recently indicated that further quantitative easing As with other indicators, trade balance may be necessary. If this materializes, then data is usually released monthly and has it would be a good time to short a currency a moderate effect on exchange rates. A pair such as USD-ZAR or USD-MYR, since better than anticipated trade balance could South Africa and Malaysia are two fast-grow- be viewed positively for the currency and ing economies that have not needed to result in appreciation whereas a worse than implement quantitative easing.

expected trade balance will have the oppo- site effect. Share now 5 Country politics 6 Interest rates The political situation of a country can have a Interest rates are the most important tool significant effect on its economy. A new presi- central banks have and they are used to in- dent or prime minister might make radical fluence lending and savings and borrowing or changes to the economy.

example than Donald Trump in the US, who has been increasing protectionist measures A higher interest rate incentivizes investment by raising tariffs against other countries and and saving, since people will get more interest introducing more obstacles for trade.

on their deposits and receive more in interest payments when borrowing to others. If people do er to borrow money for that new car or house not feel like their money is safe in a coun- someone has always wanted. try, they will sell that currency and seek a safe haven in a different currency.

For instance, China has a one hundred are 2 percent while in Germany they are 5 year plan in place as it is a communist state, percent. People with savings in the bank whereas many Western countries change would move their money into German their leaders every four or five years. banks to get a higher rate of interest, in effect, selling their Pounds and buying The relative instability could have an adverse euros.

Therefore, changes in the interest effect on the economy, as problems from rate are high impact events for exchange the last administration are addressed but a rates. made regularly by the major central banks and if you think the interest rate will be lower or higher than expected, then you can trade that currency and take advantage of the vola- tility following these announcements. The support refers to the level where the price rarely falls below before turning around, and the number of buyers exceeds that of sellers hence causing the price to rise.

On the other hand, the resistance is the level where price rarely exceeds, and the number of sellers exceeds that of buys hence lowering the price down. In both cases, the price stops and turns around. It is also called Shooting Star, Hanging Man and Gammer. You may remember that Pinnochio's nose grew long when he was lying.

The same happens with this strategy: when the wick is longer than the body, this tells us that the market is deceiving us and that we should trade the opposite way.

A long wich indicated strong selling pressure; a long tail suggest intense buying power. The trade is planned on a 5-minute chart and is signaled when two bearish candles form fol- lowing a test of resistance.

How to protfit? Choose an asset and watch the market until you see the first red bar. Then wait for a second red bar. If the second red bar closes lower than the first red bar, then it's a jackpot.

Usually, what happens is that the third bar will go even lower than the second bar. This is the point where you should open a short position. If you are skilled in charting currencies, also known as technical analysis, then you are able to frequently predict the future movement of a currency pair or the development of price action with accuracy.

One of the things traders look for is the trend of an asset, where it can be trending upwards, downwards or sideways. An upward trend is when the currency pair is increasing and is characterised by higher highs and higher lows. A currency in an upward trend will display a peak, then falling to a low and dis- playing a trough, then go on to establish a higher peak and fall to a higher low, and so on. By tim- ing your trade to buy after a peak and when the currency is establishing a new low that is higher than the previous one, you can profit from the uptrend.

A downward trend is when the currency pair is decreasing and is characterised by lower highs and lower lows. A currency in a downward trend will make a low and display a trough, rise to a high, then go on to establish a lower low and rise to a lower low, and so on. By timing your trade to sell after a high and when the currency is establishing a new high that is low- er than the previous one, you can profit from the downtrend.

Peaks and troughs still occur but there is no discernible pattern such as higher highs, higher lows or lower highs and lower lows. If you are new to forex, it is best to avoid hori- zontal trends altogether as it is uncertain which direction the currency will eventually break out. By trading with the trend, you are going with the flow of the market and allowing the market to work for you. So when analysing a currency pair, look for higher highs and higher lows to find an uptrend.

Look for where the next higher low could be and buy in this region. Alternatively, to find a downtrend, look for lower highs and lower lows. Look for where the next lower high might be and sell in this region.

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Click here to sign up. Download Free PDF. Forex Trading For Beginners. Fikri Fathan. Abstract Ready to expert. Continue Reading Download Free PDF. FOREIGN EXCHANGE FOREX FOR BEGINNER TRADERS financeillustrated. com by financeillustrated. Majors represent f developed economies and are highly liquid with low spreads. They are stable I SELL BUY and predictable in relation to other 'V 7, As our journey progressed, it was immediately obvious that finding any 🏆 We compared losing rate, com- missions, social trading feature, customer useful trading advice for a beginner was almost impossible.

We went deep, so you won't have to. information was bad, but things got even worse when we needed to find specific an- swers related to forex. If you wanted to learn about leverage Google searches. We knew there had to be a better Instead, what this book offers is a safe way how to learn Forex Trading. So we built it. learning to trade currencies. More and more players are entering the forex market, allowing you to leverage your capital and make money from fluctua- tions in the forex market.

Work While Lying in a Hammock You can literally trade forex markets while sipping on a cool drink and lying in a hammock. All you need to get started is some capital to trade with, a computer, 📱 laptop or smartphone and an internet connection.

You decide when you want to trade and therefore your working hours. No crisis Even during a financial crisis, you can still make money trading forex markets. Any oscillation in the currency can be taken advantage of by going long 📉 or going short.

Whether a market is bullish or 📈 bearish, you can trade either way with forex unlike stocks or other financial instruments. Learn from Pros with social trading You can watch what professional traders are doing and observe their trades with 💸 Social Trading. With stocks, you 😴 have to analyse company reports and choose from thousands of companies to invest in. However, forex markets generally revolve around eight cur- rencies, known as the Majors. Social trading allows you to connect with experienced traders, see their performance statistics, discuss their trading ideas, learn from 👈 their mistakes and copy their successful strategies.

In essence, you make professionals work for you. View their past performance stats, read status updates on their strategies, analyze results and communicate with them.

Your task is to carefully analyze their results and learn as much as possible from their trades. The ultimate goal of social trading is to build a portfolio of the best traders. Moreover, leverage allows one to trade using more money than they have in their account.

Currency rates move very slowly. This makes small trades unfashionable as they only return small profits and losses for every pip rate changes. Therefore, leveraging helps one to trade in larger deals hence amplifying their potential profits and losses.

Typically, it is the fourth decimal point, although many brokers quote using the fifth decimal. However, the fifth decimal doesn't really affect the price as it changes really quick. Currency pairs that include the U. The bid is the price that a trader can sell the base currency while the ask is the price they can buy the base curren- cy.

Spread refers to the difference between the two prices. The spread is measured in pips. Most currency pairs- the base currency and quote curren- cy- have a pip value equal to 0. Find Out Here! Currencies are traded in pairs as their value is relative to one another. The first currency shown is the controlling one in terms of placing your order. MAJORS are widely traded by beginners and profes- sionals alike. This is because they have the most liquid- ity, lowest spreads and the broadest range of move- ments.

Unlike small currencies, majors are generally more stable. The economic and political institutions of these nations are generally long established and pre- dictable compared to other nations. Too much US Dollar exposure can lead to all your trades heading in the same direc- tion, a big problem if that direction is against you. THE "EXOTIC" currency pairs are less traded and so much more costly to buy or sell.

Leverage in Forex trading is all about entering borrowed capital into transactions. The money is borrowed from a broker who acts like a bank that fronts you some cash to invest, which in this case is to buy currencies. This shows that the higher your leverage, the higher your chance of a better ROI. The stop loss order lets your broker know to sell a currency when it hits a certain set price.

These stops work around the clock in the forex market, therefore, protecting your position when you are logged out of the system.

In addition, the strategic stop caps the losses while also protecting the profits. While the Forex market is open 24 hours a day, five days a week, trading is not always active during this entire time.

So it is essential that you know the crucial hours and days of forex trading when traders are the most active. As a result, there are three active and in the afternoon overlaps with main forex trading sessions you should the opening of the New York or American be aware of; the Tokyo or Asian session, session, so there can be good opportuni- the London or Eurpoean session and fi- ties to trade forex and make a profit.

Seasoned traders considered 10am EST The busiest times are when these ses- to be the best time to trade forex markets sions overlap, for example, in the early as during this time, traders in London and hours of the morning in London, the trad- Europe are preparing to close their positions ing session in Tokyo is just winding down. and traders are getting ready to make a European traders are getting to their move in the American session. As the focus desks and analyse and digest information shifts from Europe to the US, this often cre- from the Asian trading session, so early ates big swings in currency prices, opening 6am GMT is a great time to make trades up opportunities to profit.

These days generally show the biggest movements in currencies as major data releases relat- ed to the economy are usually released on these days. Fridays are busy as well, but only until 12am.

During the second half of Friday, movements can often be unpredictable since major banks, hedge funds and financial institutions will close some of their positions for safety reasons over the weekend. Share now 🙅🏻 When NOT to Trade Forex? Also, novice traders should be very careful with the Asion sessions. Let's look at the three most popular types of forex charts: line chart, bar chart, and candlestick chart. It is created by simply connecting the data points depicting the closing prices of certain periods with a line.

Therefore, they can track its closing prices accurately. They are also called the OHLC charts in reference to the Open, High, Low and Close values of the currency under consider- ation.

These charts are similar to bar charts only that they present the price information in an aesthetically pleasing graphic format. It also con- centrates more on the opening and closing prices of the trading period. Even if you don't have time to stare at charts all day long, you can spot great trading opportu- nities by simply viewing the news and economic calendar on a daily basis.

In other words, by performing fundamental analysis. Basically, all fundamentals are indicators of where investors intend to put their money and which currencies will be influenced as a result. All the drivers are divided in 4 major categories: central banks, state economics, political stabili- ty and natural disasters.

Politics Economics Central Banks Natural Disasters 👉 Public Statements 👉 GDP, inflation, debt 👉 Finance Circulation 👉 Hurricanes 👉 Change of Officials 👉 Sales amounts 👉 👉 Stability of governments 👉 Interest from investors 👉 Mandatory Reserve Funds 👉👉 Earthquakes Interest Rates Floods 💸 In the chart below you can see how the British Pound dropped because of the Brexit related events.

This was a great opportunity to make money shorting betting that it would decline the British Pound. ative for the associated currency since the price level is relatively higher than Since people possess skills, knowledge and inflation in other countries, diluting its experience, this human capital can be used value. Therefore, employment data ed, where a lower rate of inflation translates releases have a substantial effect on ex- to an improvement in purchasing power.

change rates. of that currency. unemployment rate should act to depress A high inflation rate discourages investment, the currency in question. reduces the purchasing power of consum- ers and makes planning for the future more The most important employment data re- difficult. lease in foreign exchange markets is the US Non-Farm Payroll figures.

Some other Conversely, a low and stable inflation rate important data releases are the unemploy- encourages investment, increases the pur- ment rate, participation rate and other labour chasing power of consumers and business- market statistics, all of which have a moder- es can plan for the future more easily.

ate to high impact on exchange rates. Share now 3 Trade balance 4 Quantitative easing Trade with other countries is a major part Quantitative easing is an unconventional of most economies and therefore the trade monetary policy tool that is used to expand a balance can affect the value of a currency.

The Bollinger Bands and Channels Strategy "Bollinger Bands" incorporate a moving average and two standard deviations, one above the moving average and one below. Actually, your ability to limit your losses is equally as critical or even more critical as your success in managing winning trades. Forex Brokers Australia. BrokerTested Awards Forex Trading for Beginners: How to Trade Forex and Find the Best Platform The broker offers two trading platforms MT4 and proprietary Next Generation Platform.

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