It is a great tool for looking at the bigger picture when it comes to trends. The line chart arranges the close prices at the end of that time frame; so in this case, at the end of the day, the line will connect the closing price of that day. In this section of our forex trading PDF, we are going to talk about the different ways in which you can sell and buy a forex position as well as things to look out for. When it comes to forex trading you can trade both short and long, but always make sure you have a good understanding of forex trading before embarking on trades.

After all, forex trading can be a bit complex to begin with, especially when mixing long and short trades. In a nutshell, going long is usually a term used for buying.

So, when traders expect the price of an asset to rise, they will go long. When forex traders expect the price of an asset to fall, they will go short. This means benefiting from buying at a lesser value. To achieve this, you simply need to place a sell order. The current exchange rate of a forex pair is always based on market forces. This will change on a second-by-second basis. As we noted earlier, you also need to take the spread into account, so there will always be a slight variation in pricing.

For instance, if you exchange 1 USD for 17 ZAR, the sale and purchase price offered by your forex broker will be either side of that figure. The currency pairs with the most notable supply and demand attached to them will be considered the most liquid in the forex market. The supply and demand aspect is thanks to the investment of importers, exporters, banks and traders — to name a few. The most liquid currency pairs are therefore the ones in high demand.

When you feel you are ready to take the plunge and begin live trading, you need to select a forex trading system. There is a vast amount of trading strategies for you to pick from. This is because investors, speculators, corporations and banks have been trading for decades. In this part of the forex trading PDF, we are going to explain a few of the strategies available to you.

If you want to buy and sell currency pairs from the comfort of your home or even via your mobile device , you will need to use a trading platform. Otherwise referred to as a forex broker, there are literally hundreds of trading platforms active in the online space. This makes it extremely difficult to know which broker to sign up with. In the below sections of our forex trading PDF, we explain some of the considerations that you need to make.

You should also look out for analysis tools available to you. In some cases, this might be embedded, while some offer tools such as technical analysis and fundamental analysis. This is because it will save you a lot of leg work having to move between different sites and sources of information. Some of the fastest and easiest trading platforms are MetaTrader 5 MT5 and MetaTrader 4 MT4. Crucially, both MT4 and MT5 are fast and receptive trading platforms, both providing live market data and access to sophisticated charts.

It is essential before you begin trading seriously that you fully trust the trading platform you intend on using. This is especially the case if you intend on using a scalping strategy, for example. However, if you like to trade, it is vital for your peace of mind and your finances that you are fully confident with the fast execution of data transfer.

This is also the case with the precision of quoted prices, and the speed of order processing. All of these things are going to help you to have a successful forex trading experience.

To enable you to make the most of new opportunities, the ideal forex broker will be available to you 24 hours a day and 7 days a week, in line with the forex market opening hours. To save you from having to request that your broker takes action for you, your forex broker should enable you to manage your account and your trades separately.

By doing this, you will be in a much better position to quickly react to any shifts in the market, and hopefully, make the most of potential opportunities. This will enable you to gain better control over any open positions as and when they arise.

It is important to ensure that your forex broker of choice is a reputable company, who will ensure that your personal information and trading funds are fully protected and backed up.

Segregation is frequently used amongst forex brokers as a way to separate your funds from the funds of the company i. their daily costs, debts and running costs.

So, no matter what happens to the forex broker, your money is safe and segregated. If you find that a forex broker is unable to do this, we would suggest you find a better broker as it is standard practice these days. All of the brokers listed towards the end of this forex trading PDF are regulated by at least one reputable licensing body. In terms of getting set up as an online forex trader, the steps remain constant regardless of which broker you decide to join.

Below we list some of the steps that you will need to take. In order to open an account, you will need to enter some personal information. Standard details requested by the broker will be things like your name, residential address, and contact details. Some brokers will also require your tax status and will ask you to provide more financial details such as employment status, net worth and any regular income.

In this instance, you will usually need to answer some multiple-choice questions based on your experience. This is usually a fairly simple process. Known as KYC in the industry Know Your Customer , this simply means that the forex broker is going to need you to prove who you are. Some brokers will verify this using scanned copies of documentation.

Now you need to select your payment method of choice usually from a drop-down list. Bear in mind that how long this takes to go into your trading account will largely depend on the payment method — so always check this before parting with your cash. Some brokers even support e-wallets like PayPal and Skrill.

After reading our forex trading PDF you should now be feeling confident enough to begin trading. However, we do recommend that you always try out a free forex trading demo first. This will allow you to test out your newly formed trading strategies before risking your own capital. In the next section of our forex trading PDF, we explore some of the more important technical indicators and market insights used by seasoned traders. First invented by Richard Donchian, the donchian channels can be adapted as you like, in terms of parameters.

Should you choose to view a day breakdown, for example, the indicator will be created by taking the lowest low, and the highest high of that period so in this example 30 periods. When observing the moving average on a donchian channel you can look at averages stretching from 25 days to the last days. The direction which is permitted is determined by the direction of the short-term moving average. With this in mind, you should think about opening one of the following two positions:.

You will need to sell your pair in order to exit your trade if you open a long position and visa-versa. This is another commonly used forex indicator.

The simple moving average aka SMA operates at a slower rate than the present market price known as a lagging indicator.

Furthermore, it uses a lot of historical price data. In fact, more so than most other strategies. A good indication that the latest price is higher than the older price is when the long-term moving average is below the short-term moving average. This could be considered a buy signal due to an upward trend in the market. In the opposite scenario when the long-term moving average is higher than the short-term moving average, this of course points towards a sell signal due to a downward trend.

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. For a more detailed and complex view of a curren- cy, you can analyse these various timeframes, with one popular combination being the weekly and daily charts. The weekly chart could be used to identify the trend, while the daily chart can be used to look for an entry into a trade and the planned price at which you will lock in your profits and exit the trade.

While the different timeframes can sometimes suggest conflicting things, you will often be able to combine the readings from them to form a detailed overview of the state of the market. So while a daily chart above might indicate the start of an upward trend if viewed in isolation, the weekly chart below might suggest a downward trend is in play.

Without consulting the weekly chart, you may have bought the currency and made a loss over the long run. While if you con- sidered the weekly chart, you might have concluded the daily chart was just show- ing a short-term fluctuation and sold the currency instead. In addition, tageous location. Logically, USA causes Japan is the fourth biggest consumer huge demand for Canadian dollar CAD country of Crude Oil, because it makes up when the price of Crude Oil increases. Because of their gold instruments, when all other factors are neu- stores, the Swiss franc increases in value.

amounts of money and to build your invest- That is why you should avoid playing against ment portfolio slowly. Besides, limit the num- the trend. Besides, in most cases, making ber of positions you open at a time. The more transactions against a trend results in losses. positions you have, the more difficult it will Analyze the trend and look for a beneficial be foryou to weigh them carefully, making it position before making your move!

easier for you to make losses. More- when they started out. Irrespective of your over, it is crucial to differentiate multiple time strategy, forgetting the Stop-Loss Order frames before making each trade.

TOP 6 market movers, that create the most significant opportunities for profits? The best times for trading Currencies online? Learn how to read charts? Tips and warnings when using leverage? Learn whats the difference between Fundamental and Technical Analysis?

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eliza salihu. Abstract Forexhero. Continue Reading Download Free PDF. You will not find long third upgraded edition. We received a lot of great watery essay type paragraphs here, just feedback about the first and second e-book actionable and easy-to-digest information. thank you! For this new edition we have rewritten This e-book will help you learn Forex trading everything from the ground up.

We are pretty skills in the fastest time possible! We made this ebook as the you have. Our program has shown interesting ultimate learning resource for ourselves and results: people with no previous financial hope you enjoy it too! market experience often delivered better performance than those with the experience!

If someone teaches you something and it this fact is confirmed as well. sounds really complex, they probably haven't taken the time to think through how to boil it down. Be careful with folks like that. There's a difference between being good at something and being good at teaching it. The currency pair price changes will generate your profits.

It is better to invest in the currency of a country that is growing faster and fund it with a currency of a country that is growing slower. When does it work The market is open 24 hours, 5. Read on to uncover deeper secrets about forex timing. Spread point The difference between the sell quote and the buy quote in pips.

The smaller the spread, the more liquid the currency! Section 01 Introduction and key concepts 5 advantages of forex Make money even in times of crisis While the stock market and commercial bank deposits are in deep depression during the crisis, Forex profits, because any change in currency can be used to make profit.

A falling market is as profitable for Forex trading as a developing one because unlike in stock trading you can short the falling assets. Work while lying in a hammock All you need to start making money is a computer or a smart phone and an Internet connection. Your work space and goals are up to you! Easy rules Unlike the stock market with tens of thousands of different shares, Forex works with 8 basic currencies, which are the center of most trades.

Moreover, there are significantly less factors that influence currency exchange rates than in the stock market. Section 01 Introduction and key concepts 3 main disadvantages of forex Most of other forex learning materials will tell you that forex offers an easy way to make money. High risk to lose the whole position In stock trading, unlike forex, it is very unlikely that you will lose all the money when investing in the stock market. But the truth is, you struggle with finding enought time to do it all.

Emmanuel Follow Follow their activities. This is also a good way to learn Forex strategies in a real-life trading environment.

I believe the investors. This was a great opportunity to make money shorting betting that it would decline the euro. This is useful because the larger trade. Leverage is shown as a ratio, for movement in currency rates can be very small, example profits and losses alike. Leverage allows you to trade with more money Stock market Forex market Maximum leverage from to Varying lot sizes Term Lot In Forex, all transactions can be conducted via standard, mini, and micro lots.

Each lot size accounts for a different measure of units of the base currency, which in turn presents a different pip value. Below is a simple chart to illustrate the differences in lot sizes, measured in units, volume for the major pairs where the base currency is USD. Those traders who are looking to get started in the forex market should consider opening a mini account because of the smaller contract sizes.

Term Spread The difference between the bid price and the ask price is called a spread. Although these movements may seem insignificant, even the smallest point change can result in thousands of dollars being made or lost due to leverage. Again, this is one of the reasons that speculators are so attracted to the forex market; even the tiniest price movement can result in huge profit.

While the high degree of leverage used in forex trading magnifies returns and risks, a few safety precautions used by professional traders may help mitigate these risks.

Do you need more than strategy and only those with high risk , US dollars to open the trade? With tolerance should consider using big leverage. If you are a relatively cautious Leverage investor or trader, use a lower level of leverage with perhaps or leverage.

Maximum leverage limits vary in different This is the amount that will be used to cover your potential losses. In other words, the countries, varying from to margin is the actual amount that you are Use Stop Loss orders!

Stops can be used not risking to lose if the trade goes against you. just to ensure that losses are capped, but also to protect profits. Section 01 Introduction and key concepts Example: leverage in use Going short on euro Europe has been hit by a crisis, so you expect the euro to fall against the US dollar. nov 1. dec Case B: Leverage Case B: Leverage 1. You open a position of 1 lot, which 1. You were right. Euro depreciates against 2. Euro depreciates against the dollar to 1.

close your trade and take your profits. Result: The euro fell by pips 1. Your profit is x 1 - 1. Section 01 Introduction and key concepts How much should I invest? Traders should look to use an effective leverage of to1 or less. Research shows that the amount of capital in your trading account can affect your profitability.

With smaller investment you will not get enough profits as the average changes in the currency rates are small. If you haven't heard of these terms already, you undoubtedly will as you begin to invest. The terms bull market and bear market describe upward and downward market trends, respectively, and can be used to describe either the market as a whole or specific sectors and securities. These images will help you memorize which is which.

Doji - when the opening and closing price are equal. Long-Legged Doji - after small candlesticks, they indicate a potential trend change. Normally only seen on thinly traded pairs. Your Capital may be at risk. That is, on the most fundamental level, a currency rallies because there is a demand for that currency. Regardless of whether the demand is for hedging, speculative, or conversion purposes, true movements are based on the need for the currency.

Currency values decrease when there is excess supply. Supply and demand should be the real determinants for predicting future movements. However, how to predict supply and demand is not as simple as many would think.

Two of the primary factors affecting supply and demand of currencies are interest rates and the overall strength of the economy. There are many factors that contribute to the net supply and demand for a currency and the strength of the economy. Read on to uncover the main drivers that influence the exchange rates. The number of economic announcements made each day from around the world can be intimidating, so we will focus just on the most important ones.

How are they divided The drivers are divided into three major groups: Geo-political, Economic and Market Psychology. Here they are: Kathy Lien Chief Currency Strategist at Forex Capital Markets LLC. Former Currency trader at JPMorgan Chase. TOP 9 Unemployment NFP or Non Farm 1 Payroll 6 Retail sales Will US employment continue to grow?

For example, if the U. trade the U. more dollars flow out of the U.

pushing the domestic currency down. If you want to buy and sell currency pairs from the comfort of your home or even via your mobile device , you will need to use a trading platform. 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. Here is a summary of the specific advantages of each of them. Making Money in Forex Trading 2. There are several strategies of day trading.

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