You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Do not trade with money you can not afford to lose. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed in any material on this website. The past performance of any trading system or methodology is not necessarily indicative of future results.

You can do it, too! Forex Beginner Course. Forex Beginner Course - Chapter 1. Forex Beginner Course - Chapter 2. Forex Beginner Course - Chapter 3. Connect to Facebook. Let me know if you have any more questions. Hi Paul are you still following this blog? last post is from a year ago? would be happy to chat with you if possible.

Hi Matteo, Yes, sure I am around. Let me know if I can be of any help to you. I enjoyed you book and video, can you please let me know when you have finished developing your tradeing course, thanks, Gail.

Hi Gail, The course is still being developed. I hope to have it ready in a few weeks. Will keep you posted. In the meantime take a look at the videos. I was wondering if there are more videos in this series? I am having difficulty locating them on this site. Your email address will not be published. Notify me of new posts by email. Forex Trading FREE Introductory Course Chapter 1.

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Eliã at pm. Where is the third video? Will be online very soon, thanks for your interest. Fabrício at am. Sylvia at am. Hello Sir, Thank you for answering my very long search for the best time frame in your book. Sylvia Reply. Paul at am. David Morrison at am. Cheers David Reply. Let me know if you have any more questions Reply.

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Forex, also known as the foreign exchange or currency market, is where different currencies are traded for one another. Due to the decentralized nature of the market, most trades are done over the counter; this means transactions take place outside formal exchanges such as the New York Stock Exchange NYSE , London Stock Exchange LSE , Financial Times Stock Exchange FTSE or the National Association of Securities Dealers Automated Quotations NASDAQ.

Participants in the forex market range from corporations, financial institutions, and nations to regular individuals like you. So upon making plans you realize that as a citizen of the United States of America all you have is the dollars of the United States USD and in order to pay bills like your trip to the Great wall, you will need the yuan, which is the Chinese currency.

Next on the agenda would be to Convert your USD to yuan; this could be done at a bureau of exchange at the airport in China or through your bank. By doing this you have successfully participated in the forex market, as you exchanged one currency for another. The above paragraph explains a currency exchange derived from the movement of a person between two countries, expressing the need for currency exchange to be individual-based.

However, the need for currency exchange by nations, corporations and financial institutions is more prevalent as every transfer of goods and services between nations with different currencies requires an exchange in currencies.

Each currency exchange is done at a specific rate; this rate determines how much a currency is worth in relation to another currency, which is referred to as a Currency Pair Price. The exchange rate of a currency can either be floating or pegged. This implies that every currency pair price reflects a comparison between the economies of the underlining countries. Currencies are grouped into two parts, the majors and the minors.

We will be focusing only on the major currencies as they are the most liquid. Below is a list of all the major currencies, their names, symbols, and country. Tony, who lives in the United States, is interested in purchasing a Rolls Royce from the United Kingdom Great Britain for , pounds including shipping. How many USD does he need to make this purchase?

Currency pair prices are constantly changing and these changes come as a result of multiple factors, which all boil down to economic strength. This movement in price essentially means the pound has gained in value over the US dollar.

The forex market is the largest financial market in the world with a daily trading volume of 5. The chart below shows the percentage of currency composition. Below is a chart that clearly depicts these facts. In order to make quality decisions in trading any financial market, relevant information on supply and demand is needed.

As established earlier, currency trading involves the economic strength of the countries whose currencies are in question. So in order to determine liquidity flow of one currency over another, the economic data affecting these currencies has to be readily available. Unlike the equity market, the likelihood of insider information giving any market participants an unfair advantage over others is significantly low.

As established earlier, the forex market is the largest financial market in the world. This means more liquidity, which translates to quick and instant execution of orders. In other words, you will never have to wait more than a single second for your order to be placed.

Some markets face execution delays, where a market order is placed at a particular price but, due to delays, an alternative price is executed instead. This can also be referred to as debt trading. Most forex brokers provide traders with leverage proportional to the capital provided by the trader. This is a system that allows trading with more money than deposited by the trader. This means the more money you have the higher the positions you can take, resulting in more profits.

While more capital increases the size of your wins using leverage, it also increases losses but there is a cap point.

The advantage here is you only get to lose your initial capital while your upside is unlimited. More on leverage will be discussed later in this chapter. The forex market is open 24 hours. This allows traders the ability to manage their trades across different time zones. The forex market is one of the very few financial markets where retail traders have access to a lot of online trading platforms. Some of these platforms have mobile applications that allow you the possibility to manage your trades while on the move.

This should be the most commonly used term in forex trading as it is the standardized unit used to measure the distance between two price points within a currency pair. This means if the price moved from 1. In the case of certain currency pairs that are priced differently, the same logic still applies. The smallest unit of the price represents one pip.

NOTE : Some brokers display certain currency prices over the standardized number of digits, which is five. This last digit represents a 10 th of a pip, meaning a pip broken down into 10 parts.

Definition : This is the latest price at which the currency pair traded. Basically, the last trades both by the buyers and sellers were done at the quoted price. The quotes are always in pairs called the BID and ASK prices. Definitions : A bid is the last price where buyers accept to purchase the pair while the ask price refers to the price where sellers accept to sell the pair.

Traditionally the above would describe what bid and ask mean perfectly, but in the forex market and as retail traders it is slightly different. This is because bid and ask prices are lodged from the perspective of the broker, which means as a buyer the broker offers to sell the currency pair using the ask price and buys from the trader using the bid price.

The lower price is bid and the higher price is ask. The moral of this story is that market makers always have the upper hand over retail traders in the case of quotes as traders will always get the worse price. Definitions: A spread represents the difference between the bid and the ask price. Definition: A base currency is a currency the exchange rate is derived off, while the quote is the measure of the base. This means for every one euro you need 1.

A simpler way to put it would be the currency that appears first in the pair is the base currency while the latter is the quote. Definition: This is the unit measurement of a forex contract. It can also be referred to as a contract size. Below is a table showing the different categories of lots in the forex market and their unit symbols. Profits in the forex market are gotten by accurately predicting the change in a currency pair price.

This change, as previously described, is measured in pips. To convert this pip to actual US dollar figures a certain calculation needs to be made. For currency pairs with USD as the quote currency use the formula in the table below:. The above table suggests that a single pip on a dollar quote currency is 10 USD on a Standard lot, 1 USD on a Mini lot, 0.

For pairs with the USD as the base currency, the formula is slightly different. Note: To calculate a pip value for the other contract categories, just replace the contract.

Lastly, the value of one pip of a non-USD pair is calculated similarly to the above method. The quote currency here is the pound GBP 0. Note: Non-USD pairs paired with the yen JPY have the same calculation with one difference being the value of a single pip, which is 0.

Definition: A long position, also known as a BUY position, is a trade triggered with the goal of the price moving HIGHER than the price at which the trade was entered while a short position, also known as a SELL position, is the opposite, a trade entered where the goal is for the price to go LOWER than the current prices. In the event that the price goes in the opposite direction of your anticipated move, your trade will go negative.

Definition: These are the methods of entering trades in the forex market. A market order allows the trader to enter a trade at the current market price while the pending order offers the ability to place a trade at price above or below the current market price.

This, in turn, allows the trade to trigger automatically when the market gets to the intended order price. This order is used when the intention is to buy at a price lower than the current market price. Since this preferred price is lower than 1. Hopefully, a reversal then occurs and you go smiling to the bank. This order is used to enter long trades above the market price. This is mostly used in breakout strategies; here the aim is to catch aggressive price moves to the upside.

Similar to the buy stop, the sell stop is used to enter short trades at a price lower than the market price. Definition : This represents the ratio of total trading capital to the deposit amount provided by the trader. Leverage in general business terms suggests the infusion of borrowed funds in an investment. This is basically the same in forex but expressed in terms of ratios, commonly written as This means for every USD traded the trader is required to provide 1 USD margin , thereby borrowing USD on every 1 USD trading capital.

Definition : This is an amount stipulated by individual brokers to be provided by traders as a good faith deposit for specific trading position size. As explained above, the margin represents the total required amount deposited by the trader to give access to the leveraged sum. We have established the fact that the forex market is a hr market but this does not describe in detail how that is possible.

The forex market may be open 24 hrs but only in select regions around the world and at certain times of the day. The tables below show the different trading sessions and their open and close times, also adjusted for daylight savings. As displayed above, there are four major sessions for the forex market—Sydney, Tokyo, London, and the New York session—all of which have both unique and similar characteristics.

You can also see that some sessions cross over in time; these portions of time give rise to certain market behavior. Member Login About Us. Day Trading Forex Live — Advanced Forex Bank Trading Strategies. Forex Beginner's Course - Table of Contents. What Is The Forex Market? Currency Pairs. Country, Currency, and Forex Symbols.

Forex Beginner's Course - Table of Contents. Because the value of a company and its products or services can fluctuate continuously, the value of the stocks you hold will not be the same from day to day and can sometimes even change hourly. Note: Non-USD pairs paired with the yen JPY have the same calculation with one difference being the value of a single pip, which is 0. We will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from the use of or reliance on such information. Notify me of new posts by email. Member Login About Us.

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