forex trading basics

8/9/2019 Forex Trading Basics

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forex TRADINGultimate COLLECTION

15 minute turbocourse

you

www.makeforexeasy.com

u p d a t e d &

e x p a n d e d


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WARNING!


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• Forex market at a glance

• Breaking the biggest forex myth

• Forex Glossary

• What influences the exchange rates

• The golden tool - leverage

• Trading strategy examples

• Top 10 expert t ips for success

• How to read graphs

• How to choose the right platform

• Top 5 forex trading platorms

• Platform reviews

• The revolutionary learning & trading system

• Top features of copy trading systems

• How to choose the right traders to copy

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London

EST time

MON TUE WED THU FRI SAT SUN

New York

Sidney

Tokio

Best time


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USD / CHFEUR / JPYUSD / CAD

EUR / USDGBP / USDUSD / JPY

exchangeforeign

The most common currency pairs

Forex is an international currency marketwith daily deals worth $4 billion.

The trade in Forex occurs between twocurrencies, becau se one currency is beingbought and another – sold at the sametime.

FOREX

TOP PAIR

EUR/USD

dealsof all1/3

EUR / USD

1.30011.3000

Buying price (Bid) Selling price (Ask)

BaseCurrency

QuoteCurrency

28%

EUR/USDEUR/USD

Point (Pip)The fourth unit after the

decimal point, which is the

smallest unit of an exchange rate.

Spread

The difference between the sellquote and the buy quote (in pips).

The smaller the spread,the more liquid the currency!

spread

point

forex glossary


7/24Dec 12011

Nov 12011

EUR/USD

Example

Prime Ministerof Greece announces

referendum

The EU cannotagree upon

changes in thetreaty

Central banksagree to stimulateliquidity of nan-cial transactionECB announces

a new president

Berlusconiresigns

Source: Morgan Stanley Research, Bloomberg.

Finance circulationInterest ratesMandatory reserve funds

GDP, inflation, debt

Sales amountsInterest from investors

Stability of governments

Public statementsChange of officials

Central banks State economics Politics


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Leverage: 1:100Invest $1000.Trade with $100 000!Besides, each point by which the exchangerate changes will be multiplied by 100, in your favour!

Leverage allows one to go through withdeals involving amounts of money thatexceed the amount originally invested.This is an opportunity to gain significantprofit with even small changes inexchange rates.

While using Leverage, the profit poten-tial is limitless, but the loss will neverexceed the original investment. The bestplatforms let you set a Stop-Loss Orderand automatically close the positiononce the exchange rate drops below thedeposit.

The leverage effect, naturally, also worksthe other way around – in case of loss itincreases its amount. However, there is asolution to loss – the Stop-Loss Order.

Example

Term

Make sure you haveset the Stop-Loss

Order before you starttrading!

Leverage


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Information about a repeated crisissituation in Europe appeared as early asseptember 2011. It was already possiblethen to predict that the euro exchangerate should drop soon.

1 lot* ($1380) selling position isbeing opened, with a leverageratio of 1:10 and an exchange

rate of 1.3800

1Sept. 16, 2011.Sept. 16, 2011.

World braces for secondwave of the crisis

World braces for secondwave of the crisis

1.dec2011

1.nov2011

1.3500

1.3000

1.4000

UR/USD

2

692 points x 1(lot) x 10(leverage)

$

A month later, the open posi-tion is being closed with andexchange rate of 1.3108.The rate difference is 692points in my favour (1.3800-1.3108).

3

Following news

Choosing thetransaction

Making thetransaction

Profit $6920

A lot is the standard transaction size in theForex market, that equals 100 000 unitsof the base currency.A mini lot = 10 000 units.A micro lot = 1 000 units.

Term

*Lot


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Rudolph Boyle

Alex Slovacek

Daniel Lanham

Rudolph Boyle

Alex Slovacek

Daniel Lanham

Follow

Follow

Follow

Follow

Follow

Follow

TOP traders

Even if you’re new to Forex, there arebeginner friendly platforms like ETORO or Ava FX that offer you an interestingopportunity – to follow the best tradersand copy their transactions.

1

After you choose a top trader whoseactions you wish to copy, decide upon anamount of money to invest into copyinghis transactions and press “copy”.

3

Start following the best traders andwatch their activities.

2

Choosing a platform

The reviews of aforementioned and other best platforms can be found in thePlatform TOP at the end of this e-book

Follow the leaders

Now you can sit back and watch a

professional make transactions for you.This is also a good way to learn Forexactions and tips in a real-life tradingenvironment.

$ Profit

Copy their ideas

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An essential mistake beginners makeis closing the transaction too soonand thus not using the full profitpotential. Trends last longer thanthey might seem at first!

6 Don’t stop the profit

Transactions against a trend usuallyresult in loss. Wait for a beneficialtendency and then make your move!

7 Don’t play against

the trend

If you still aren’t confident aboutyour decisions, choose a platformthat lets you follow leaders and copytheir transactions.

8 If in doubt, followthe leader

Don’t hold unsuccessful positionsopen for a long time. Experienceshows that it’s best to close them

early and move on to others.

Close the unsuccessful

Beginners often don’t know thatwhen trends start, they developquickly beca use they are increased bytraders following them. Use trends inyour favour!

9

10

Trends have momentum

Don’t open many positions at thesame time. It’s better to choosefewer positions, but weigh each ofthem carefully.

1 Start gradually

People often forget to limit their lossand therefore have to step out of thegame very soon. With the Stop-LossOrder, you will be able to control thesituation if the rates changeunexpectedly.

2 Stop-Loss order

Specialists advise against riskingmore than 1/6 of your free capitalwhen you aren’t completelyconfident.

3 Rule of 1/6

Diferentiate the time frames ofanalysis: weekly graphs are used toobserve trends, daily and hourly

graphs – to observe the best time toopen and close positions.

Multiple time frames

Each good trader has their own plan,and the best make an effort to holdon to it. Those who have the time,make daily transactions, otherschoose long-term strategies. Keep itsteady!

4

5

Stick to the plan


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time X

time

X

Let us look at a daily graph.What do most traders dowhen they see such a curve?They assume that it’s thebeginning of a downwardtendency and bid on the dropof the currency exchangerate. And they’re wrong!

Now let’s look at the same

currency over a longer periodof time. We see that thedaily shift was accidentaland the tendency is upwardand not the other wayaround.

MULTIPLE TIME FRAME ANALYSIS

The market can be analysed in several time frames: 10 minutes, hours, days, weeks.It may often seem that these indicators are contradictory. However, they aren’t, you

just need to co mbine th ei r readings . Analyses of lo ng er time per iods sh owtendencies, ignoring accidental changes, whereas daily and hourly graphs help inchoosing the moment to open a nd close positions.

For a successful and precise market analysis, one has to use at least 2-3 time frames!

Example

Conclusion

November

3 10 17 24

1500

1550

1600

Aug Sep Okt Nov Dec

1300

1600

1900


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There are many companies that offer margin trading (Forex) services, and withoutthe knowledge of the essential criteria, it’s easy to get confused in the large offer

and choose an unsuitable or, in the worst-case scenario, an unreliable serviceprovider. What is the most important when choosing a platform provider, and howdoes one orientate themselves in so many offers? Below is a compilation of someadvice from several professionals in the Forex market, which can be narrowed downto four basic criteria:

Reputation of the company

Evaluate the popularity of the platform provider – whetherthere are any complaints about the services and what thosecomplaints are, what the customer service is and whether ornot profit payments are ever delayed.

Convenience of the user interface

You have to evaluate how easy and convenient it is to use theplatform, what analytical options and extra tools it uses. It isbest to check it by using demo accounts that are offered by thebest platforms.

Commission for paid transactions

The commission payme nts for transactions are described by theSpread, which is the difference between the bid and offer priceof the currency. The bigger it is, the more you will have to paythe service provider. In commercial banks that offer Forex plat-forms, these commission payments are usually higher thanindependent platforms.

Money transactions

The best platforms provide the opportunity to useInternet-banks, credit cards or online payment operators –PayPal or WebMoney, which are the most convenient and easymethods of receiveing funds.

1 2 3


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Easy Forex

UFXMarkets

ETORO

$100

Platform Min. Deposit Leverage Rating

1:200

$50 1:400

$25 1:200

$100 1:200

Ava FX

visit site

visit site

visit site

visit site

visit site

2

1

4

3

5

Best platforms of 2012

Plus 500 $100 1:50

For optimum results

recomended to

invest at least $100*

* $100 allows you to open a position of 1 Lot using a leverage of 1:100, thus keeping your risk lower.

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1. etoRO platform review

One of the most innovative and acknowledged platforms with the biggest number ofclients – more than 1.5 million users around the globe. Reasonably considered to bethe most user, especially beginner-friendly and easy to understand platform. Theinterface is really amazingly convenient and visually appealing; sparing youcomplicated mechanisms and difficult-to-understand information. eToro is known forits unique “social trading tools” that let you follow other traders’ actions, discuss andcopy the transactions of your favourite traders.

• Super friendly for beginners• Community for sharing & learning• Social trading tools• Possibility to follow & copyprofessionals

• Founded in: 2006• Registrated in: Cyprus• Regulators: CYSEC, MiFID• Minimal deposit: $50• Leverage: up to 1:400• Spreads: EUR/USD 3 points• Payments: Creditcards, Paypal,BankWire, MoneyBookers, Webmoney

• Commissions: No*• Contacts: + 1-866-350-0881,[email protected]

Platform pictures

FactsPros

* Overnight commissions might be applicable

visit site

beginners

best for

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visit site

best of

all-in-one

Multiple award winning platform that is known for its reliability. The platform is wellsuited both for beginners and experienced traders as it is easily adaptable to yourneeds and preferences. A great feature is that Ava FX lets you customize and saveyour chosen layout and features. And the best part is the “Mirror Trading” which issimilat to eToro’s “CopyTrader”, and allows you to use the knowledge of experiencedtraders by verifying your decisions and comparing them to Pro’s strategies. You canalso use Semi Mirroring, which allows you to see buy and sell signals in real time.

• Mirror trader• Customisable dashboard• 24h support• Ultra high security

• Founded in: 2006• Registrated in: Ireland• Regulators: Central Bank of Ireland• Minimal deposit: $100• Leverage: up to 1:200• Spreads: EUR/USD 2 points• Payments: Creditcards, Paypal,Webmoney, MoneyBookers , Wire.

• Commissions: No*• Contacts: +1-212-941-9609,[email protected]

Pros

Platform pictures

Facts


2. Ava FX platform review

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editor’s

choice

3. Easy Forex platform review

A friendly but still serious and trustworthy platform which has raised a lot ofprofessionals. This platform offers one of the easiest sign-up processes and multiplepayment receival options. A pleasant feature is the super low minimal deposit - just$25. With one trading account you can trade from desktop, smart phone, iPhoneBlackBerry or PDA. The variety of market reviews and analyses offered by thisplatform is especially remarkable, which helps you make the right decisions.

• Extra easy & fast sign-up• Low minimal deposit• Free market analysis news

• Founded in: 2003• Registrated in: Cyprus• Regulators: CYSEC, MiFID• Minimal deposit: $25• Leverage: up to 1:200• Spreads: EUR/USD from 3 points• Payments: Creditcards, Paypal,Bank Wire

• Commissions: No*• Contacts: [email protected]

Pros

Platform pictures

Facts


visit site

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4. UFX Markets

UFX Markets offer their own unique trading platform which is very well designed andpleasant to use. Unlike many other platforms out there which have multiple screensfor different currencies and charting tools, the UFX Markets platform offers a singlehandy dashboard without unnecessary distractions. UFX also features a daily newsvideo which is very handy a nd saves you a lot of reading time. Regarding customerservice our advice is to use the chat instead of email which provided faster feedback.

• Super fast set-up, no income ordocument scans required• Daily news video• High class interface

• Founded in: 2011• Registrated in: Cyprus• Regulators: CYSEC, MiFID• Minimal deposit: $100• Leverage: up to 1:200• Spreads: EUR/USD 3 points• Payments: Creditcards, Bank Wire,Money Bookers

• Commissions: No*

Pros

Platform pictures

Facts


visit site

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A popular platform which has proven itself since 1999. The program is also availablefor mobile devices including iPad which will allow you to make transactions whereveryou are (Highest rated broker in UK’s ap p store). With Plus500 you can trad e not onlycurrencies but also oil, gold, silver and even such commodities as coffe or sugar!

• Ease of use• Low spreads• Premium for first deposit till 30%• Available for many devices

• Founded in: 1999• Registrated in: UK• Regulators: FSA• Minimal deposit: $100• Leverage: up to 1:50• Spreads: EUR/USD 2 points• Payments: Creditcards, Paypal,Bank Wire

• Commissions: No*• Contacts: +44 203 002 7290,[email protected]

Pros

Platform pictures

Facts


5. Plus 500 platform review

visit site

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forex gurus

how to make

the revolutionary

learning & TRADING

shortcut

work for you

G R E A T F O R

B U S Y

P E O P L E


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Imagine being able to peek into the minds of thesuccessful Forex traders! Now imagine being

able to simply copy their deals and let them workfor you! Now it’s all possible - with Trader Copysystem!

Trader copying system is a revolutionary newapproach to forex trading – instead of worryingabout which currencies or commodities to buyyou now can create a portfolio of the besttraders whose trades will become your trades!All you have to do is choose which trader youwant to follow by analyzing their portfolio andperformance.

After finding a trader you like you can startcopying their trades with a few clicks, adjust theamount of $ you wish to dedicate and then justlean back and and watch how the profit growsand learn from their performance and advicewhich they share to their followers.

you don’t have to be a guruto trade like one

MAKE TOP TRADERS WORK FOR YOUwith 3 easy steps

top3 copy-trade platforms

CopyTraderTM

best of showaward 2012

Learn MoreLearn More

MirrorTrader


ForexCopy


FOLLOW copyFIND

1. 2. 3.

Finovate Europe 2012 - Financial and Banking Technology Innovation Awards. London.

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Etoro platform connects you to the best globaltraders in the market. You can see all theirtrading activities in real time, analyze theirperformance and strategies. Talk to the traders

to spot new trading opportunities and upcomingtrends!

Uncover the strategiesof top ranked traders

top features that will driveyour profits to a new level.

Etoro let’s you create a team of the best traderswith different styles and portfolios so you canhedge your currency traders also with the bestoil, gold and other commodity deals. In

comparison with forex robots or forex managers,the traders you copy are fully commited toperform at their best as they are putting theirmoney in the deals!

Create your dream teamof Forex traders

All the data about the copied trades is com-pletely transparent and easy to access. If youdon’t like how the trade is going you can eitherallocate a different amount of your budget to itor simply close a trade whenever you wish.

Full transparency andcontrol over the trades

Regardless of the amount of funds you set tocopy the trader with, all trading will be doneproportionally. For example if you allocate $500dollars to a trader who has an account of $5000and he opens a position with $1000 you will dothe same with $100.

Reduced risk withproportional trading

Roy Deloni bought EUR/USD

@ 1.364

When will $OIL go down?

Looks like tomorrow!

2 minutes ago

Like | Comment | Follow

You

Roy


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Traders often miss out the extra filters that lieunder the Risk slider. This is a great tool to findthe best traders that match your risk appetite,

demand for experience and consistency.

How to choose the righttraders to copy?

Check out etoro copy trader

1. Use the advanced filtersin Guru search

High Win ratio stats can be tricky! Often itmeans that the trader has left open multipleloosing trades without a StopLoss - just to have

high stats. Analyze the Open Trades sheet!

2. 99% WIN RATIO CAN BE BAD!

A new sorting criteria in the ranking system thatallows you to see how consistent is the trader inhis correct decisions. This tool is best used in 6and 12 month period and it let’s you seperatethe longterm guru’s from those who just gotlucky.

3. Keep an eye on the Profit days.

Observe the profit and loss line – the smaller thegaps, the better. The gains should be steady - itmeans that the trader sees the big picture anduses both fundamental and technical analysis.

4. Look for gaps!

win ratio~75-80%

profit days

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thanks for reading and good luck!

forex trading basics

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