ADVANCED INTRODUCTION NOTES

What is forex Trading?

Forex stands for Foreign Exchange, and refers to the buying or selling of
one currency for another. It's the most heavily traded market in the
world because people, businesses, and countries all participate in it.
When you go on a trip and convert your US dollars for euros, you're
participating in the global foreign exchange market. How much demand
there is for a currency will either push it up or down in value relative to
other currencies.

In the Forex market, currencies always trade in pairs. When

you exchange US dollars for euros, there are two currencies involved.
For every foreign exchange transaction, you must exchange one
currency for another. This is why the forex market uses currency pairs,
so you can see the cost of one currency relative to another.

Worldwide stock exchanges usually close around the end of the

workday . The Forex market is different in that it is open 24 hours a day
for 5 days a week, so your allowed to place trades anywhere from
sunday 12am when the markets open to Friday 12am when the markets
close.
Why is the forex market so popular?

Chances are, you know a few people who have become obsessed with
trading Forex. You'll hear them talking about the currency market as if
it’s an interesting topic of conversation! They're probably raving about
how much money they're making outside of business hours.
So, what is it about forex trading that makes it so popular?

First and foremost, Forex trading is popular because of its ease of

access. In this day and age, something may as well not exist if it has no
online presence. On the other hand, if something is available and its
online, it’s going to draw a lot of fans.Forex trading is so popular
because you need nothing more than a computer and internet
connection to get involved. Whereas in the past, trading was for those
who worked in finance and knew the ins-and-outs of getting started,
now anyone can trade.
Forex trading would not be nearly as popular if you could not do it after
hours. After all, we’ve all got day jobs that we have to prioritize. When
we come home from work, the Forex market is waiting for us to step in
and start trading.

Forex trading is not one-size-fits-all. In fact, there are so many

strategies available, you might be trading differently to every other
person you know. Some are, of course, more successful than others.
And some are way easier to use and perfect for the beginner.

The final and most important reason Forex trading is popular is that you
can make a lot of money. More specifically, you can make a lot of extra
money. If you're starting out trading, you should not quit your day job.
You don’t need to.
And so, when you start making profits, you're supplementing your
income in a big way. You'll have money to spend on those luxuries you
usually surpass. You're able to buy your significant other those gifts
they've always wanted.
There’s nothing more attractive than a little extra money in the bank.
Characters needed to become a successful trader
Forex Trading is not easy, but to be successful there are some strong characteristics you
need to master in order to start off trading on the right track.

Ability – to take a loss without becoming emotional

Confidence – to believe in yourself and your trading strategy, and to have no fear

Dedication – to becoming the best Forex trader you can be

Discipline – to remain calm and unemotional in a realm of constant temptation (the

market)

Flexibility – to trade changing market conditions successfully

Focus – to stay concentrated on your trading plan and to not stray off course

Logic – to look at the market from an objective and straight forward perspective

Organization – to forge and reinforce positive trading habits

Patience – to wait for only the highest-probability trading strategies according to your
plan

Realism – to not think you are going to get rich quick and understand the reality of the
market and trading

Savvy – to take advantage of your trading edge when it arises and be aware of what is
happening in the market at all times

Self-control – to not over-trade and over-leverage your trading account

What affects the Forex market?

People trade forex based on expectations of the future, which are shaped by many
factors.
Each market participant has their goals; some are companies who are hedging
currency exposure to protect their business; some are fundamental traders who
focus on factors that affect the strength of whole economies; others are technical
traders who look for price patterns to trigger their trades.
In addition, there are central banks, hedge funds and financial institutions who all
bring different goals and interpretations to their trading.
The various market participants place different weight on information about interest
rates, policy (laws), economic announcements
and natural or man-made events: all affect expectations and thus market
movements.
Remember that in the forex market, you can profit from down-turns as well as rising
prices.
Major forex currency pairs and their nicknames

• Understanding Forex currency pair quotes:

You will need to understand how to properly read a currency pair quote before you start
trading them. So, let’s get started with this:

The exchange rate of two currencies is quoted in a pair, such as the EURUSD or the
USDJPY. The reason for this is because in any foreign exchange transaction you are
simultaneously buying one currency and selling another. If you were to buy the EURUSD
and the euro strengthened against the dollar, you would then be in a profitable trade.
Here’s an example of a Forex quote for the euro vs. the U.S. dollar:

The first currency in the pair that is located to the left of the slash mark is called the base
currency, and the second currency of the pair that’s located to the right of the slash
market is called the counter or quote currency.

If you buy the EUR/USD (or any other currency pair), the exchange rate tells you how
much you need to pay in terms of the quote currency to buy one unit of the base
currency. In other words, in the example above, you have to pay 1.32105 U.S. dollars to
buy 1 euro.

If you sell the EUR/USD (or any other currency pair), the exchange rate tells you how
much of the quote currency you receive for selling one unit of the base currency. In other
words, in the example above, you will receive 1.32105 U.S. dollars if you sell 1 euro.

• Long vs. Short

Another great thing about the Forex market is that you have more of a potential to profit in
both rising and falling markets due to the fact that there is no market bias like the bullish
bias of stocks. Anyone who has traded for a while knows that the fastest money is made
in falling markets, so if you learn to trade both bull and bear markets you will have plenty
of opportunities to profit.

LONG – When we go long it means we are buying the market and so we want the market
to rise so that we can then sell back our position at a higher price than we bought for.
This means we are buying the first currency in the pair and selling the second. So, if we
buy the EURUSD and the euro strengthens relative to the U.S. dollar, we will be in a
profitable trade.

SHORT – When we go short it means we are selling the market and so we want the
market to fall so that we can then buy back our position at a lower price than we sold it
for. This means we are selling the first currency in the pair and buying the second. So, if
we sell the GBPUSD and the British pound weakens relative to the U.S. dollar, we will be
in a profitable trade.

What is Professional Forex Trading? – Making the Money

• What is a professional Forex trader?

A professional Forex trader is someone who uses price movement in the Foreign
exchange currency market to make profit. The aim of any Forex trader is to win as many
trades as possible and also to maximize those winning trades. A professional Forex chart
technician uses price charts to analyze and trade the market. By trading with an EDGE in
the market, professional traders can put the odds in their favor to successfully trade price
movement from point A to point B.

Caution: Forex trading is not a ‘get-rich-quick’ scheme and it is more difficult to make
money in Forex than what most popular Forex system-selling websites would have you
believe. To trade profitably we must not only have winning trades, but we must also cut
our losing trades short so that our winners out-pace our losers. You see, losing is an
enviable part of trading the Forex markets, and you must learn to lose properly by taking
small losses relative to your winners. This means you must A L W A Y S trade with a stop
loss on E V E R Y trade you take and make sure the dollar amount you have at risk is an
amount you are 100% comfortable with losing.

A professional Forex trader understands that reading a price chart is both art and skill,
and as such, they do not try to mechanize or automate the process of trading as each
moment in the market is unique, so it takes a flexible and dynamic trading strategy to
trade the markets with a high-probability edge.

• How do pro traders trade the Forex markets?

There are many different trading strategies and systems that pro traders use to trade the
markets with, but generally speaking, professional traders do not use overly-complicated
trading methods and rely mainly on the raw price data of the market to make their
analysis and predictions.

Automated / Robot Trading: Software-based trading systems, also known as

forex trading robots, are created by converting a set of trading rules into code that a
computer can make use of. The computer will then run this code via trading software that
scans the markets for trades that meet the requirements of the trading rules contained in
the code. The trades are then executed automatically via the trader’s broker.

Discretionary Trading: Discretionary Forex trading depends on a trader’s ‘gut’

trading feel or discretionary trading skill to analyze and trade the markets. Discretionary
trading allows for a more flexible approach than automated trading but it does take a
certain amount of time to develop your discretionary trading skill. Most professional Forex
traders are discretionary traders because they understand the market is a dynamic and
constantly flowing entity that is best traded by the human mind.

Technical Trading: Technical trading, or technical analysis, involved analysis of a

market’s price chart for making one’s trading decisions. Technical analysis traders use
price patterns or ‘technical signals’ to trade the market with an edge. The common belief
amongst technical analysis traders is that all economic variables are represented by and
factored into the price movement on a price chart.

Fundamental Trading: Fundamental trading, or news trading, is a trading technique

wherein traders rely heavily on market news to make their trading analysis and
predictions. Fundamental news does ‘drive’ price movement, but often times the market
will react differently than what a particular news release would imply due to the fact that
market participants often buy on expectations of future events and sell once the reality of
said future event occurs. This is another main reason many pro traders rely more heavily
on technical analysis than fundamental analysis, although many do use a combination of
the two.

Different types of traders

Day Trading: Traders who day-trade the Forex market are in and out of the market
within one day. This means they typically buy and sell currencies over a very short period
of time and they may enter and exit numerous trades in one day.

Scalping: Scalping is similar to day-trading but it relies on more frequent and shorter-
term trades than even day-trading does. It is a trading style that refers to jumping in and
out of the market many times a day to ‘scalp’ a few pips here and a few pips there,
generally with little regard for placing logical stop-losses. Scalping is generally not
recommended by experienced / pro traders because it is essentially just gambling.

Swing Trading / Position Trading: This style of trading involves taking a short to
mid-term view on the market and traders who swing trade will be in a trade anywhere
from a few hours to several days or weeks. Swing or position traders are generally looking
to trade with the near-term daily chart momentum and typically enter anywhere from 2 to
10 trades per month, on average.

THE MAJOR KEY

The major key is fully based technical analysis, basically price

movements (patterns on graphs).


They are a lot of technical strategies, I guess we all know that well if
you didn’t know now you do, but the major key is by Far the best
technical strategy.

IMPORTANT:

PATIENCE
ANALYSIS
ENTRY POINT
“RISK MANAGEMENT” EMOTIONS CONFIDENCE
ALWAYS REMAIN PROFFESSIONAL AT ALL TIMES. THE MAJOR KEY
WORKS ON ALL TIME FRAMES, BUT WORKS BEST ON H4


Professional Forex traders vs. amateur Forex traders

Professional Forex trading might seem like something of an elusive or difficult goal for
those of you struggling to trade profitably or just beginning to trade. But, there are a few
key differences between pro traders and amateur traders that you should be aware of to
help you improve your trading or get started on the right track if you are a newbie: Why
money is the life blood of your Forex trading business.

RISK MANAGEMENT

£100 : MIN-0.01|MAX-0.05

£200 : MIN-0.02|MAX-0.10

£300 : MIN-0.03|MAX-0.15

£400 : MIN-0.04|MAX-0.20

£500 : MIN-0.05|MAX-0.25

£600 : MIN-0.06|MAX-0.30

£700 : MIN-0.07|MAX-0.35

£800 : MIN-0.08|MAX-0.40

£900 : MIN-0.09|MAX-0.45

£1000 : MIN-0.10|MAX-0.50

NB: ALL ACCOUNTS SMALLER THAN £100 SHOULD ONLY STICK TO

LOT SIZE 0.01 TILL ACCOUNT IS GROWN!!!

You’ve probably heard of stories where a trader took a small account and trade it into
millions within a short while.

But what you don’t hear is that for every trader that attempts it, thousands of other
traders blow up their account.
So…
Let’s not treat trading as get a rich quick scheme. Instead, treat it as a business
you’re looking to grow it steadily over time.
Now, let’s say you can generate 20% a day
With a $100 account, you’re looking at an average of $20 per day.
On a $1000 account, you’re looking at an average of $200 a day.
On a $10 000 account, you’re looking at an average of $2000 a day.
This is the same strategy, same risk management, and same trader.
The only difference is the capital of your trading account.
But no matter what strategy or system you’re using…
…the bottom line is you need money to make money in this business, period.