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    FRX Basics: Essential For Success

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    Damola Solanke
    The document provides an overview of forex (foreign exchange) trading. It discusses what forex trading involves, the major and minor currency pairs that can be traded, as well as the best times to trade based on market overlaps. It also explains key forex concepts like pips, lot sizes, and how to calculate profits and losses based on pips.

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    FRX Basics: Essential For Success

    Uploaded by

    Damola Solanke
    73 views17 pages
    The document provides an overview of forex (foreign exchange) trading. It discusses what forex trading involves, the major and minor currency pairs that can be traded, as well as the best times to trade based on market overlaps. It also explains key forex concepts like pips, lot sizes, and how to calculate profits and losses based on pips.

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    FRX Basics

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    The document provides an overview of forex (foreign exchange) trading. It discusses what forex trading involves, the major and minor currency pairs that can be traded, as well as the best times to trade based on market overlaps. It also explains key forex concepts like pips, lot sizes, and how to calculate profits and losses based on pips.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    73 views17 pages

    FRX Basics: Essential For Success

    Uploaded by

    Damola Solanke
    The document provides an overview of forex (foreign exchange) trading. It discusses what forex trading involves, the major and minor currency pairs that can be traded, as well as the best times to trade based on market overlaps. It also explains key forex concepts like pips, lot sizes, and how to calculate profits and losses based on pips.

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    FRX Basics

    Essential For Success


    What is Forex?
    FOREX = FRX = Foreign Exchange Market

    - Online exchange of foreign currencies worldwide!


    - Can buy or sell depending on fluctuation of market
    - Currencies come in pairs! When you buy one you are selling the other
    What is traded?
    ➢ Currencies

    ○ US Dollar, Canadian Dollar, Euro, Japanese Yen, etc.

    ➢ Commodities- Raw material that is mined

    ○ Oil, Gas, Gold, Silver, other metals

    ➢ Cryptocurrency

    ○ Bitcoin, Litecoin, Ethereum, etc.


    Major Currency Minor Currency
    Pairs Pairs (Cross Pairs)
    Any pair that includes the USD Any pair that does NOT involve USD

    ● EURUSD ● EUR Crosses


    ● USDJPY ● GBP Crosses
    ● GBPUSD ● AUD Crosses
    ● USDCHF ● CHF Crosses
    ● USDCAD ● NZD Crosses
    ● AUDUSD
    ● NZDUSD
    Indicies Exotics
    ● GER30 (DAX30) ● USD/TRY

    ● US30 (DOW Jones Industrial ● USD/SEK

    Average) ● USD/ZAR

    ● NAS100 (NASDAQ 100 Index/ ● TRY/JPY

    US TECH 100) ● EUR/TRY

    ● SPX500 (S&P 500 Index) ● USD/HUF

    ● EUR/MXN
    When Can You Trade?
    4 Major Regions

    1. Sydney- 5PM-2PM EST


    a. Australian Dollar (AUD) and New Zealand Dollar (NZD)

    2. Tokyo- 7PM-4AM EST


    a. Japanese Yen (JPY)

    3. London- 3AM-12PM EST


    a. Euro (EUR) and Great British Pound (GBP)

    4. New York- 8AM-5PM EST


    a. US Dollar (USD) and Canadian Dollar (CAD)
    Best Time To Trade
    During Overlaps
    Best trading time: Session Overlaps
    - Tokyo/London
    - JPY, GBP, EUR, CHF

    - London/New York
    - GBP, EUR, USD, CAD
    -
    Currency Pair
    - Currencies come in pairs! When you buy one you are selling the other

    SELL BUY
    ➔ ASK PRICE - Price at which traders sell
    ➔ BID PRICE - Price at which traders buy

    ➔ SPREAD - Is the difference between the two (Amt of PIPS)

    ← If you sold this currency your sell price would be 1.30245 and
    you would not be in profit until ask price crossed 1.30229

    ←If you bought this currency your buy price would be 1.30229
    and you would not be in profit until bid price crossed 1.30245
    What Is a PIP?
    ● Point In Percentage - a unit of measure to express the change in value between
    two currencies
    ○ Most currency pairs are quoted to the fourth decimal point
    ★ Japanese Yen pairs are quoted to the second decimal

    EUR/USD USD/JPY

    1.1302 107.065
    Calculating PIPS

    Entry Exit
    ?

    ● Subtract entry price from exit price


    ○
    1.1297 - 1.1245 = .0052 = 52 PIPS
    Lot Sizes
    A lot size is the total number of currency units you are exchanging

    Type of Lot Size Volume $/PIP

    Micro 0.01 - 0.09 10¢+/PIP

    Mini 0.10 - 0.99 $1+/PIP

    Standard 1.00+ $10+/PIP


    PIP Calculation
    Lot Size PIP Profit
    Mini .30 = $3 x 52 $156
    =
    Standard 4.0 = $40 x 52 $2,080
    =
    Micro .05 = 50¢ x 52 = $26

    Standard 2.5 = $25 x 52 = $1,300

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