forex trading

 

Introduction and What Is Forex

Forex is just a Short form for FOREIGN EXCHANGE

 

Forex is one of the Largest market in the world with a Total Daily Liquidity of $5.3 Trillion dollars, The New York Stock Exchange which is the Second Largest Market is having a Daily Trading Volume of $169 Billion Dollars as we can see in the Statistics above, While the Cryptomarket, for individuals that know about Bitcoins has a Total Market capitalization of about $251 Billion as of today, this is not even the Daily Volume.

 

That is to show the massive Liquidity Which is on the Forex Market. That is to show how large the Forex market is.

 

What Is Traded On Forex?

 

I have been asked a thousand and one times What is Traded on the Forex market. The Forex market is not the usual form of market where you buy your clothes or shoes. It is not your usual Local markets in any part of the world you are.

In Forex market we Trade the Following:

 

The image above shows exactly what is traded in the foreign exchange market “CURRENCIES”.

 

So what we are actually doing is that we are constantly Transacting in the above items I listed up there.

 

Who Is A Forex Broker

 

Forex Brokers are Firms that gives you access to the FOREX MARKET

.

•     They provide You as a Trader access to the Financial market...

•     By providing a Trading account for U.

•     They gives Traders what we call Leverage.

•     They also provide Support Functions to the traders

•     There are various Brokers in the Forex Market

 

We have Hotforex, Fxtm, Fxcm, Fbs, LiteForex Etc. We are still going to take time to talk about Brokers in details But we are now aware of their Functions and what they offer the Traders.

 

Trading Times And Trading Sessions

 

There are Various Trading Times and Trading Sessions in Forex market which includes:

 

·        SYDNEY SESSION

·        TOKYO SESSION

·        LONDON SESSION

·        FRANKFURT SESSION

·        NEW YORK SESSION

 

The Sessions names are derived from the major cities in which most of the Transactions are done for example;

 

•     Sydney Session represents Australia and other countries around that Time zone.

 

•     Tokyo session, sometimes called ASIAN Session represents Japan and some of the Asian countries.

 

•     London Session represents The United Kingdom and the countries within it.

 

•     FRANKFURT session which is in Germany represents Europe.

 

•     New York Session represents The Americas.

 

Forex is actually a 24 hours market. It is most times regarded as the Market that never Sleeps because it's open for 24 hours of the day except on Weekends, So no matter where you are around the World and no matter your Time zone, you can Trade this Large, Highly Liquid market

 

Let's now get to their Trading Times because each of this Session have their own Opening and Close times.

 

·        SYDNEY SESSION OPENS BY 9PM GMT

·        TOKYO SESSION OPENS BY 11 PM GMT

·        LONDON SESSION OPENS BY 7AM GMT

·        FRANKFURT SESSION OPENS BY 8AM GMT

·        NEW YORK SESSION OPENS BY 1PM GMT

 

It is important to note down these Times as you would be needing them for your Trading.

 

Also Note that these Times are listed in GMT Greenwich Meridian Time So you should do the appropriate Calculation depending on your countries Time zone, so as to know which session, You are currently on.

 

All Sessions lasts for 9 hours. So having known their Opening Times, to get their appropriate Closing Times. Just add 9 hours to the Opening Time to get when they would close

 

Example

 

Sydney Session that opens by 9 PM GMT WOULD and closes by 6AM GMT

 

Also TOKYO Session that opens at 11PM GMT WOULD close by 8AM GMT

 

NEW YORK SESSION that Opened by 1 PM GMT WOULD CLOSE BY 10PM GMT

 

AND SO ON FOR OTHERS.

 

Just add 9 hours to their Opening Times

 

This is what many Forex Traders don't actually understand because nobody taught them.

 

It is always good to Trade the Market when 2 Markets are open at the same time. I.e. When 2 of the sessions are open

 

Ensure you take note of this important point.

 

This is Because, Volatility is always more when 2 or more Sessions are Open and in Forex Market, More Volatility means more money.

 

As a Forex Trader, You wouldn't want to trade a Quiet market, because there won't be much Fluctuations and it's those movements that make money for us.

 

U would come to understand these soon and know what I mean

 

Example by 12 AM GMT Sydney Session and Tokyo Session would be open together and it would have more Volatility than someone that is trading at 9PM GMT because the market would be Quiet.

 

Another Example is by 8AM GMT London Session and Frankfurt Session would be open, infact even Tokyo would be with them briefly, so you would notice that Volatility would increase during such times.

 

So as a Forex trader, always time your Trading to fall in periods where 2 or more Markets are open at the same time.

By doing that You would always have an edge in the market.

 

 

Terminologies Used In Forex

 

Just Like every Field you try to learn, You would have to get accustomed to its Terms and Terminologies So also is the Field of Forex, You would need to learn about the Terminologies so as to be able to communicate with the Market, Analysts and also with your fellow Traders.

 

You may be among the gathering of Forex Traders but you won't understand a dime of what they are saying, this is because you don't know the terms.

 

So that is what we would be learning in this section So as I was saying for every New field you embark upon in Life, you would encounter New Terminologies and terms which is peculiar to such field.

 

Be it Law, Medicine, Journalism, Engineering etc

 

And you would have to get yourself acquainted with their Terminologies so as to be able to communicate properly

 

So also is Forex, for you to be able to Learn and Trade, you should get to know some of the terms that is used in FOREX Trading, So that you can understand the News, Flow with your Fellow Forex traders and understand Analysts.

 

So let's get to it

TO GO LONG  means to BUY

 

TO GO SHORT means to SELL

 

If a Trader tells you that he went long on a Currency pair. He meant that, He bought the pair.

 

While if they tell you that they short a Currency pair, it means that they sold the pair.

 

Soon you would get to see that All what we are doing in Forex is Buying and Selling

 

The next terms we would consider are

 

BULLISH MARKET: A market that is going upwards

 

BEARISH MARKET: A Market that is going downwards.

 

When someone tells you that a currency pair or a commodity is Bullish He is telling you that it’s going Up While One that is Bearish is going down

 

BULLS: The Buyers are referred to as Bulls

 

BEARS: The Sellers are referred to as Bears

 

RANGING: A Market is said to be Ranging, if it does not have any particular direction. It's neither moving upwards nor downwards.

 

TRENDING: A Market that has a direction. It's either moving Upwards or downwards, so you might hear traders say a market is Trending upwards or the market is Trending downwards,

And you may hear people tell you that the Market is just Ranging, they are indirectly telling you that the the market has not found any direction yet.

 

HAWKISH: This term is mostly used when referring to the Central Bank Governor or personell of a Country.

When they are Hawkish, they tend to be liberal on interest rate and are willing to increase it. This is good news for investors.

 

DOVISH: This is the opposite of Hawkish. Financial personnel who are Dovish are very restrictive. They do not want to tamper with the interest rate. They even want to reduce it. This is bad news for investors.

 

NFP

An acronym for NON FARM PAYROLL. A very important News Event in the US. Also Most of the Currency pairs have specific names in which they are called.

 

We would get to know them soon, for instance:

 

·        The dollar is sometimes called Greenback

·        The Pounds is called the cable

·        The New Zealand dollars is called the Kiwi

·        The Australian dollars is the Aussie

·        The Canadian Dollars is called the Loonie

·        Oil is referred to as the Black Gold Etc

 

FUNDAMENTAL ANALYSIS

This is also known as News Trading, here you are analysing the Forex market with respect to the News. It's been said that News is what moves the market. Everyday various news are being released by these major countries And they either positively Or negatively affect the Currency pair involved and then you make your Trading decision based on the news you heard

 

We see all these News on CNN, Bloomberg, CNBC etc

 

Also Your MT4 App has a Summary of News Section, some websites like forexfactory.com, dailyfx.com etc Gives you summary of this News.

 

Now whether the News is Positive or Negative, as a Forex trader, that is none of your business because you make money both ways.

 

Those into Crypto Trading would tell you that you only make money when a Coin is appreciating.

 

But in Forex, you make Money Both ways.

 

If a Currency pair is appreciating, We go long on the pair

 

When a Currency is also depreciating based on the News, We go short on the pair.

 

Like a lot of traders do everyday, they buy some and sell some So in Forex, You make money on both sides of the News

We would come to see how to trade the News later.

 

We would be discussing an Important News Released by the United States.

 

Even though there are News release everyday.

 

There is what we Forex Traders Call KING OF ALL NEWS

 

It's called the NFP

 

NON FARM PAYROLL

This is a News released by the United States of America.

Among all the news releasedby the US, this is the highest because it causes the most Volatility in the market.

 

Non Farm Payroll is one of the Biggest News that every trader awaits, so let's start with understanding what NFP is and what the News entails.

 

It's a News that contains various data and statistics released by the US Bureau of Labor and Statistics.

 

It's very influential as an indicator of US Economy because the US Federal Reserve makes monetary policy decisions based on this data.

 

Hence Investors, Financial Analysts, Forex traders, and Stock traders make trading decisions with the News.

 

It is released every 1st Friday of the Month by 8:30am EST ie 12:30pm GMT

 

Just Calculate according to your Time zone

 

The data released includes:

 

1). Non Farm Payroll increase

This is the number of new jobs added in the US labor sector in the previous month These data includes employment in the manufacturing sector, Construction sector, Goods sector etc Excluding Farm workers (hence the name), Also excluding Private Household employees and non profit organizations It is usually compared to the previous data

 

It also includes

 

2)    Unemployment rate of the US

 

3)    Which sectors of the economy, these jobs were added mostly It gives investors and traders where are the possible sectors to invest in as the sector that added more jobs would be most likely to have experienced growth

 

5.) Then lastly the data includes a revision of previous non farm payroll because investors compare these values together. Whether there has been an improvement or reduction. This also gives you an idea if the economy is growing or reducing

 

4). It also includes the Average hourly earnings of the workers in the US This is also an Economic indicator because even if the number of workers didn't change. But however their earnings increased... It would have the same effect as if their number increased Same also could be interpreted in reverse, if their earnings reduced

 

Let's go further into how to interpret the data.

 

INTERPRETATION OF NFP

So when more jobs are added, it means that Business ventures are growing and remember that these newly employed would be paid.

 

Hence more people would have money to spend on goods and services which thereby leads to the growth of the economy.

 

However when the number of jobs added are reduced.

 

The reverse occurs- People won't have money to spend on goods produced and services, hence dwindling the economy.

 

Also the US government has an amount of money paid to the unemployed. When more jobs are added, more people would be employed.

 

This reduces the unemployment rate, as the unemployed citizens reduce less money leaves the government pocket, hence boosting the economy

 

So this is just a Breakdown on What NFP entails and why it's so Volatile.

 

It's usually released 1st Friday of every month

 

IT CAUSES LARGE VOLATILITY IN THE MARKET

 

So Let's all follow closely

 

TECHNICAL ANALYSIS

This form of Trading is when you analyse the Market using Indicators, Charts Patterns , Candlesticks, Fibonacci, Support and Resistance, Pivot Points, Elliott waves etc

 

When you use any of the above to analyze the market, It's called Technical Analysis.

 

Majority of what we listed on the table of content of the third series are Technical Analysis, It's the most popular Form of Trading, this is because High Volatile News is not released Everyday so you can't just depend on Fundamental Analysis alone.

 

Everyday can't be Christmas

 

So as a Forex Trader, You must learn how to trade the market using Technical Analysis.

 

So because everyday can't be Christmas, High Volatile News like NFP is not going to be released everyday, so you have to learn how to Analyze the market and Trade in the absence of any major News release, That's what makes you a complete Forex Trader Among the 2 major Forms of Analysis, No one is superior to each other and also no one is used in Isolation.

 

So you would learn as we move on, how to harmonise the two to constantly keep you on top.

 

 

 

CURRENCY PAIRS

 

We are now entering the Practical Section of Forex where you would be seeing what we do online.

 

For this Section we would be needing our MT4 App, you can download the application on your laptop and also download the android version on your smartphone. Ensure you download it as it would be needed in this section.

 

After downloading the app, Install it as I want the coming parts to be more interactive. you need to open our MT4 Apps.

 

Open the App and Register on it.

 

It is important to start out your trading by first practicing with a DEMO ACCOUNTS.

 

SO OPEN THE APP, IT WOULD AUTOMATICALLY CREATE A DEMO ACCOUNT FOR YOU.

 

You would see where is written start without Registration, That automatically creates a Demo account for you which is what we would be using for Now.

 

Demo account is virtual money while Live ACCOUNT is Real money, both the demo and live account has same Currency pairs, Same Charts etc

 

Ensure you are seeing that page containing the CURRENCY PAIRS on your MT4.

 

To Access the Page, Follow the Instructions I would Outline Below to Ensure You get to that interface

 

If you Can't see the Currency Pairs

 

Open up your MT4 App, then Click on that Double arrow icon below pointed at by the red arrow from any Screen You are, It would automatically take you to the CURRENCY PAIRS PAGE.

 

ALSO

 

If your MT4 is showing an Interface, telling you MQL5 Registration, Don't bother about that, It has already created the Demo account for you. Just Click on that MT4 icon above pointed at by the Red arrow.

 

It would now take you where you would see the Currency pairs by Clicking on the double arrow icon as I earlier explained on any interface it takes You to.

 

 

 

Mt4 Interface Part 1

For this part to be more interactive, you need to open your MT4 App.

 

We are getting into more serious Business right now.

 

I believe you have successfully opened your Demo account and has Located the CURRENCY PAIRS page just like I outlined.

 

 

Let's fire on

·        EUR: EURO

·         

·        USD: US DOLLARS

 

·        GBP: GREAT BRITISH POUNDS

 

·        CHF: SWISS FRANC

 

·        NZD: NEW ZEALAND DOLLARS

 

·        AUD: AUSTRALIAN DOLLARS

 

·        CAD: CANADIAN DOLLARS

 

·        JPY: JAPANESE YEN

 

·        CNY: CHINESE YUAN etc

 

These are some of the list of Popular Currencies traded on the Forex market

 

With their abbreviations and Full meanings

 

As you observe on your MT4, It's mostly written as their abbreviations, If you Look at those Currencies listed up there you would discover that they are listed in pairs among those pairs of Currencies

 

The first Currency within the pair is called THE BASE CURRENCY WHILE The second Currency within the pair is called the QUOTE CURRENCY.

 

Take not of the above

 

An important thing to note here is that The Base Currency is always stronger than the Quote Currency.

 

That number is telling you, how many Units of the Quote Currency, You would need to get 1 unit of the Base Currency.

 

Let's note the above statement down, I would explain in details now, Let me use a Local scenario to give you guys an example If you have a Currency pair btw USD and EUR

I.e

 

USD/EUR 360

 

This is first telling you that USD is stronger than EUR, hence USD is the Base and EUR the Quote

 

Then the next important thing it's telling you is how Many Quote Currencies do you need to get 1 Unit of the Base Currency

 

So in this case, you would need 360 EUR to be able to get 1 US Dollar So that is what that number by the side, Always tells you.

How many Quote currencies do you need to get 1 Unit of the Base Currency.

 

I believe this is clear to you, once more the first currency pair is known as the BASE CURRENCY and the second currency pair is known as the QUOTE CURRENCY, which tells you how many units you need to have to get the Base Currency.

 

I told you that the Base is always Stronger than the Quote

 

There are occasions in which the Stronger currencies are written as the second pair

 

Examples include:

 

AUDUSD US dollars is stronger than Australian dollars

 

NZDUSD US dollars is stronger than NewZealand dollars

 

EURGBP Pounds is stronger than Euro

 

You will always know them because they start with zero point something written beside them.

 

Now when you see these few exceptions, don't bother too much about why the Weaker one is written first even though it's quite glaring that the Quote is stronger, What you just have to do is to take note of them, It doesn't affect your trades.

It's just for the knowledge sake, so note them down.

 

 

Generally in Forex, the Base is always stronger than the Quote Also, no matter which one is written first Always know that the Price You see beside it is how many of the Quote Currency You would need to get 1 unit of the Base Currency.

 

Let’s now move to another Very important Part of Forex which is where a lot of individuals always asks Questions.

 

However, For your Foundation to be Strong in Forex, You need to grab this concept

 

Let's move on

 

The Big Question Now is:

When Do you Buy and When Do you Sell?

Now this is where people always get confused because those who taught them used the wrong semantics.

 

YOU BUY WHEN YOU KNOW THAT THE MARKET WOULD GO UP WHILE YOU SELL WHEN YOU KNOW THAT THE MARKET WOULD GO DOWN

 

If you notice, I carefully labeled WOULD

 

I didn't say

 

You Buy when the Market is going Up

 

Assuming I said that, I would still be correct but you would get more confused

 

You would start asking, Who buys any item when it's going Up

 

Now as Usual, I would use a Local scenario to explain this topic, by the time I'm done.

 

This seemingly complex concept, would look very easy to Believe me, nothing is hard in Forex.

 

So What we are actually doing in Forex in very simple terms is the exchange of one currency for another.

 

Without doing anything, You just sit at home and trade on different currency pairs on the Foreign Exchange market and make a whole lot of money even more than your usual 9-5 job and without calling anyone BOSs.

 

This is basically what Forex is all about.

 

This is not the normal market where commodities are traded.

 

For individuals that would ask what are you Buying and Selling?

 

This is just a raw Analogy, because in Forex market it's even more interesting. You don't have to wait for 1 year or months to make Money.

 

These Currencies are Constantly Fluctuating in minutes (what I usually refer to as Volatility), so it's those opportunities caused by these Fluctuations in the Price of one Currency with respect to another that Forex traders make their money from because they happen Daily.

 

That's why Banks would never allow you to learn Forex.

 

They prefer you come to their Banks and fix the money for meagere interest rates.

 

To even shock you, Investment Banks contribute more than 70% of the total Liquidity in Forex, they use your Money to Trade, Drive Big cars and Live in Big Houses and give you peanuts as interest or meagere amounts As Salary.

 

I had to sit down to break this analogy in the lowest terms that everyone can understand.

 

With time it would get clearer.

 

But I hope you now have an idea of how we make money in Forex, so In the above Analogy, you would notice that You didn't really Buy or Sell any real commodity to make money.

 

You took advantage of the change in Exchange rate to make money so why did you Buy USD/EUR in the above scenario.

 

You Bought USDEUR because you knew before hand that the value Would Rise, Take note of the word Would.

 

So In Summary:

We have seen that We Buy When we know A currency Pair would Rise and we Sell when we know a Currency pair would fall

 

The Big Question is how do we know when it would rise and when it would fall that is What Technical Analysis would tell you Candlesticks, Fibonacci, Elliott waves, Indicators, Pivot point etc.

 

In the next series we would go indepth into more areas of the foreign exchange market like an understanding of spread, bid and ask rice, leverage, risk management and a host of other things that would ensure you trade the foreign exchange market and make good profit for yourself, so do well to buy the second series.

 

 

 

CONCLUSION

I hope you enjoyed reading through this forex trading guide as much as I enjoyed putting this great piece of content together, and I believe you have learnt a lot about the foreign exchange market and how traders make money from it.

 

In the next series we would go deeper into the foreign exchange market as I show you a whole lot of stuffs that the gurus and forex traders have been hiding from you.

 

Do well to get your copy of the second and third series of this great book.

Benefits of using SEEDR the online torrent site

SEEDR has been my go-to website whenever I want to download files online from torrent sites. Here are the amazing benefits of using it:

1. You get a 2.5 gigabyte space for new account signup click here to sign up.

2. It is very easy and convenient to use, rather than having to download torrent download clients on your phone or computer. You can just visit there website to download your files.

 3. It is fast in downloading

 4. It's the best online torrent downloading site. With the aforementioned advantages of SEEDR I know you would like to give it a trial. G

https://www.seedr.cc/ to register an account.

The Benefits of An Online Home Business

Running an online home business has many
benefits. If you are considering researching home
business ideas, here are a few of the positive
things about starting a home business online.
- An online home business is very easy to start.
Previously if you were to start a home business it
would involve a lot of planning and work to get
your business successfully off the ground.
Nowadays, with the internet that is no longer the
case, as anyone with an internet connection can
start an online home business.
Affiliate marketing is a good example of how easy
it is to start an online business. You can join an
affiliate program and be promoting your product
online literally in a few minutes.
- The start-up costs are very low. It is not going to
cost you much money at all, although costs will
vary depending on the type of home business you
start.
Affiliate programs are free to join and many
residual income opportunities will cost you less
than $100 to get started. If you choose to do
other things like article writing or blog posting
these will not cost you any money at all.
- You can outsource what you can't do yourself.
If you are new to working online you will not yet
have mastered the internet marketing skills
required to promote a business. But you don't
have to worry about that as it is easy to find
people to do things for you at a reasonable price.
Fiverr is a great website where you can hire
people for five dollars per project and Easy
Outsource and Odesk are other websites where
you can hire employees.
- You have the opportunity to earn unlimited
income. Your goal no doubt is to make as much
money as you can.
You know exactly what your monthly salary is
when you have a job and this makes it easier to
budget and plan your life, however, it does not
make is easy to achieve your dreams.
With an online home business you can make as
much money as you want. Once you are making
money with your first website you can then
increase your income by starting another one and
so on. There is no limit to what you can do online.
Consider working with people to make money
through joint ventures as well as earning off the
efforts of others with network marketing
opportunities.
- You don't need high skill levels. To start and
run a successful online home business does not
mean that you need to have a college education
Whilst you will need to master some internet
marketing skills to drive traffic to your site,
anyone can learn these if they are prepared to
spend the time working at it.
The above a just some of the many benefits of
having an online home business. It is very easy
and cheap to start an online business from home
and with work can be very profitable.