You have become curious and you want to learn how to trade. First of all, where do you actually start because when you look on google you see so many results that you actually do not know how and where you actually should start.
When I started trading in the beginning it was really a maze. And it took me a long time before I could find a way in trading forex. I will explain to you a few steps that you can follow to become more familiar with learning how to trade.
How to Learn to Trade the Forex Markets
Step 1: What Type of Trading Forex
First find out what trading forex exactly is it is very useful to know what it all exactly means. So learn the basics for example what exactly is a PIP? And what is Leverage? What times are the best times for trading and in which continent? What is volume? and what times is there enough volume? Always start with the basic doctrine to understand what you want to do. Prepare as well as possible. It’s important to have an understanding of the markets and methods for forex trading so that you can more effectively manage your risk, make winning trades, and set yourself up for success in your new venture.
Step 2: Find the Right Forex Education
To learn how to trade properly it is important to find the right forex education. Because A good strategy is an important part of your trading career. For example, you can find it for free on youtube.com and many other websites. If you prefer to personally learn with an experienced trader, you will look for a good mentor and look at the style of trades that suit you most. Orient yourself in the different styles and strategies everyone has their own style of forex trading so look for that strategy where you can find yourself the most.
Step 3: Demo Account
Open a demo account and keep practicing and practicing and practicing. Like as you may learn over time, nothing beats experience, and if you want to learn forex trading, experience is the best teacher. A fundamental thing you may learn through experience, that no amount of books or talking to other traders can teach, is the value of closing your trade and getting out of the market when your reason for getting into a trade is invalidated.
“Money is just something you need in case you do not die tomorrow. Let this is a reminder for you not to obsess over profits and losses. In whatever you do, strive for enjoyment, focus, contentment, humility, openness… Paradoxically (and as an unintended consequence) your trading performance will improve significantly.” ― Yvan Byeajee
Step 4: Forex Scalping Strategy
Making your first Forex trade. Start trading with microlots. This allows you to master your strategy and more importantly your emotions. Once your emotions and your risk management are successful, you can move up to a higher lotsize.
Most noteworthy is that the higher your Lotsize, your emotions will often be more difficult to control. My advice is therefore also to be completely comfortable at first with a somewhat smaller lotize so that you can increase it a little bit in time.
The Forex Scalping Course to Understand What is that
Forex Scalping is a forex strategy where the trader only keeps his positions open for very short periods, with the aim of quickly catching small profits. This can be a very profitable way of forex trading. Because the time that the position remains open ranges from a few seconds to a maximum of 2 minutes.
In fact, there is no more talk of forex scalping than normal intraday trading. However the target profit per trade is usually between the 1 and 5 pips In theory, it is also possible to set up a forex scalping strategy with the expected profit between 5 and 15 pips net, but in that case the position will have to be held longer for longer than 1 to 2 minutes.
How does Forex Scalping work in Realtime?
Firstly the trader must first consider a working system. Most important part of any forex scalping strategy is at least risk management. The difference between profitability and profitability is, in fact, risking only a small part of the total capital and quick packing of any profit. After all, anyone who already has some experience in trading in the online currency market knows that it is not possible to deal with profit is an unprecedented risk if unable to accept / cause loss. Successful scalping means risking 1% up to 2% of your total capital.
If you work with very small profit margins, there is no room for greater loss. In conclusion, a scalper develops a fixed, elaborate strategy that is not deviated from. At our course, you learn everything about Scalping and Swing trades. So if you interested in scalping but never did scalping before please contact me for some more information.
It is very important to understand the terminology in the Forex market. That’s way I need your full focus right now! Make your head clear, drink a cup of good coffee and start learning these important terms.
Forex terminology – PIP
You’ve met the PIP yet. Cute little happy word isn’t it? Well that’s exactly what it is since this cute little word will make you very happy and rich if you use it the right way. You need to completely understand how to calculate your wins and losses through the PIP. Otherwise don’t even bother start trading. The unit of measurement that indicates the change in value between two currencies is what you call a ‘pip‘.
If the EUR / USD pair rises from 1.2250 to 1.2251, then the .0001 USD increases in value 1 PIP. Simply, a pip is the last decimal figure of a quote. Most pairs are shown to four decimal places, but there are exceptions such as the Japanese yen (to two decimal places).
But watch out! There are brokers that show currency pairs different from the standard “4 and 2” decimal, but instead using’5 and 3′ number decimals. What they actually do is showing fractional pips, “which are also called ‘pipettes.
Forex terminology For example: GBP / USD 1.51542 1.51543 moves, then it rises .00001 1 PIPETTE. As each currency has its own relative value the value of the pip must be calculated for a specific currency pair. We give an example in which we use a ratio of 4 decimal places. In order to explain the calculations easier we exchange ratio set down like – so: EUR / USD at 1.2500 is “1 EUR / USD 1.2500.
Example exchange rate:USD/CAD = 1.0200; or 1 USD to 1.0200 CAD; or 1 USD/1.0200 CAD. (The value change in the “counter currency”) X (the exchange ratio) = pip value (in terms of the base currency)
Continuing this example, if we sell 10,000 units USD / CAD, then one pip change of exchange rate changes of approximately 0.98 in the position value (10,000 units x 0.00009804 USD / unit). We say “approximately” because when the exchange rate changes, the value of each pip move is also changing. Last important question that needs to be answered if you calculate the pip value of your position is: ‘What is the value of your pip in terms of your account currency?’ You’re trading at an international market you remember? So not everyone on the whole world has chosen the same currency for their account. Shortly, the value of the pip needs to be converted to the currency used at your account.
Forex terminology – Spread.
Simply spread is the difference between bid and ask price. Spread is used by brokers to make money of every trade that takes place through their network. Example: Broker pays 1.3600 and sets the price at 1.3601 for you to buy. Spread will always be around the price the broker paid. Whenever your trade you’ve paid the spread. There is nothing you can do about it. That’s just the way brokers make their money. TIP: search for a website “broker” with the smallest spreads.
⦁ Cross Rate. ( Forex terminology ) The exchange rate between two random currencies that are not considered standard in the country where the pair is quoted. For example: the quote of the GBP/JPY pair would be considered a cross rate in the U.S. While EUR/USD is a cross rate in Japan.
⦁ Leverage. In Forex trading the use of leverage is pretty common. Leverage needs to be completely understood because it plays an important role in the purchasing power of your account.When opening an account you have the option to chose your leverage. It simply gives you the opportunity to trade bigger positions than your real bankroll let’s you.
Just to give you an example: Suppose you have a thousand euros on your account and you act with a leverage of 10: 1, you can then buy 10,000 EUR / USD. Then, when the price increases on the pair two cents per euro it means that you have earned 200 euros after you close the position. It can also happen that the price of a penny decreases and then you have a loss of two hundred euros when you close the position.Your profit or loss is actually the difference between the amount on your account and the outstanding gains and / or losses.
⦁ Margin. ( Forex terminology ) Margin is the ammount needed to buy a new position. With a margin balance of €1.000,- and a 1% margin requirement you can buy a maximum position of €100.000,- euro. With this given you are able to use a leverage of 100:1.
The higher your leverage the more margin you will need on your account. So, when you open to many positions or your losing position is going further down the balance on your account could be too low to meet your obligations. When this happens your broker will give you a so called “Margin Call”. This means you need more margin (account balance) to hold on to your position. Most of the time when the margin percentage gets under 50% your broker will close that particular position with a loss. When you decide to trade with big leverages or open a lot positions simultaneously you have to be careful because you don’t want to get that Margin Call.
The United States dollar is the world’s main currency a universal measure to evaluate any other currency traded on Forex. All currencies are generally quoted in US dollar terms.
Under conditions of international economic and political unrest, the US dollar is the main safe-haven currency, which was proven particularly well during the Southeast Asian crisis of 1997-1998. As it was indicated, the US dollar became the leading currency toward the end of the Second World War along the Bretton Woods Accord, as the other currencies were virtually pegged against it.
The introduction of the Euro in 1999 reduced the dollar’s importance only marginally. The other major currencies traded against the US dollar are the Euro, Japanese Yen, British Pound and the Swiss Franc.
Euro -Major currencies Forex
The Euro was designed to become the premier currency in trading by simply being quoted in American terms. Like the US dollar, the Euro has a strong international presence stemming from members of the European Monetary Union.
The currency remains plagued by unequal growth, high unemployment, and government resistance to structural changes.
The pair was also weighed in 1999 and 2000 by outflows from foreign investors, particularly Japanese, who were forced to liquidate their losing investments in euro-denominated assets. Moreover, European money managers rebalanced their portfolios and reduced their Euro exposure as their needs for hedging currency risk in Europe declined.
Japanese Yen – Major currencies Forex
The Japanese Yen is the third most traded currency in the world; it has a much smaller international presence than the US dollar or the Euro. The Yen is very liquid around the world, practically around the clock. The natural demand to trade the Yen concentrated mostly among the Japanese keiretsu, the economic and financial conglomerates. The Yen is much more sensitive to the fortunes of the Nikkei index, the Japanese stock market, and the real estate market.
British Pound – Major currencies Forex
Until the end of World War II, the Pound was the currency of reference. The currency is heavily traded against the Euro and the US dollar but has a spotty presence against the other currencies. Prior to the introduction of the Euro, both the Pound benefited from any doubts about the currency convergence. After the introduction of the Euro, Bank of England is attempting to bring the high U.K. rates closer to the lower rates in the Euro zone. The Pound could join the Euro in the early 2000’s, provided that the U.K. referendum is positive.
Swiss Franc – Major currencies Forex
The Swiss Franc is the only currency of a major European country that belongs neither to the European Monetary Union nor the G-7 countries. Although the Swiss economy is relatively small, the Swiss Franc is one of the four major currencies, closely resembling the strength and quality of the Swiss economy and finance.
Switzerland had a very close economic relationship with Germany, and thus to the Eurozone. Therefore, in terms of political uncertainty in the East, the Swiss Franc is favored generally over the Euro. Typically, it is believed that the Swiss Franc is a stable currency. Actually, from a foreign exchange point of view, the Swiss Franc closely resembles the patterns of the Euro, but lacks its liquidity. As the demand for it exceeds supply, the Swiss Franc can be more volatile than the Euro.
The Canadian Dollar and the Australian Dollar are also part of the currencies traded on the Forex market but do not count as being part of the major currencies due to their insufficient volume and circulation. They can only be traded against the US Dollar.
Canadian Dollar – Major currencies Forex
Canada decided to use the dollar instead of a Pound Sterling system because of the ubiquity of Spanish dollars in North America in the 18th century and early 19th century and because of the standardization of the American dollar.
The Province of Canada declared that all accounts would be kept in dollars as of January 1, 1858, and ordered the issue of the first official Canadian dollars in the same year. The colonies that would come together in Canadian Confederation progressively adopted a decimal system over the next few years.
Want to know more about our Signals or Coursebook with memberzone? Please contact us!
Forex Charts Explained Trading at the Forex Market
There are three different Forex charts of use when trading at the Forex market. Let me introduce you to them: Line charts, bar charts, and candlestick charts. We have a strong preference for the candlestick charts because they give us the most information.
Line Forex Charts
So a chart with just one line the shows us the movement of the quote.
Line charts are easy to read and show us the trend in the Forex charts. Also good at using to see the Support & Resistance levels. Although the line chart gives us information about the history of the pairs price, it’s hard to see the individual prices.
Bar Forex charts
The Bar charts show us individual prices for a certain time period. Every bar has it’s own information and will so give you a more accurate view of your positions. The bar has an open, high, low and closing point.
Candlestick Forex charts
Most traders use the candlestick chart because they tell us a lot of clear information. Especially the Price Action is really recognizable. Don’t get confused, the candlestick shows us the same information as the bar charts, however, it’s easier to read. Candlesticks give good information about the highs and lows at a certain timeframe.
Japanese Candlestick Trading
Back in the day when Godzilla was still a cute little lizard, the Japanese created their own old school version of technical analysis to trade rice. That’s right, rice.
A Westerner by the name of Steve Nison “discovered” this secret technique called “Japanese candlesticks,” learning it from a fellow Japanese broker. Steve researched, studied, lived, breathed, ate candlesticks, and began to write about it. Slowly, this secret technique grew in popularity in the 90’s. To make a long story short, without Steve Nison, candlestick charts might have remained a buried secret. Steve Nison is Mr. Candlestick.
Want to learn more about Candlesticks? Download the Free E-BOOK!
⦁ PIP You’ve met the PIP yet. Cute little happy word isn’t it? Well that’s exactly what it is since this cute little word will make you very happy and rich if you use it the right way. You need to completely understand how to calculate your wins and losses through the PIP. Otherwise don’t even bother start trading.
The unit of measurement that indicates the change in value between two currencies is what you call a ‘pip’. If the EUR / USD pair rises from 1.2250 to 1.2251, then the .0001 USD increases in value 1 PIIP.
Simply, a pip is the last decimal figure of a quote
Most pairs are shown to four decimal places, but there are exceptions such as the Japanese yen (to two decimal places).
But watch out!
There are brokers that show currency pairs different from the standard “4 and 2” decimal, but instead using’5 and 3′ number decimals. What they actually do is showing fractional pips, “which are also called ‘pipettes. For example, GBP / USD 1.51542 1.51543 moves, then it rises .00001 1 PIPETTE. As each currency has its own relative value the value of the pIip must be calculated for a specific currency pair. We give an example in which we use a ratio of 4 decimal places. In order to explain the calculations easier we exchange ratio set down like – so: EUR / USD at 1.2500 is “1 EUR / USD 1.2500.
(The value change in the “counter currency”) X (the exchange ratio) = pip value (in terms of the base currency)
Continuing this example, if we sell 10,000 units USD / CAD, then one piIp change of exchange rate changes of approximately 0.98 in the position value (10,000 units x 0.00009804 USD / unit). We say “approximately” because when the exchange rate changes, the value of each pip move is also changing.
Last important question that needs to be answered
if you calculate value of your position is: ‘What is the value of your pIip in terms of your account currency?’ You’re trading at an international market you remember? So not everyone on the whole world has chosen the same currency for their account.
IC Markets True ECN trading environment allows you to trade online on institutional grade liquidity from the worlds leading investment banks and dark pool liquidity execution venues, allowing you to trade on spreads from 0.0 pips. You can now trade along side the worlds biggest banks and institutions with your order flowing straight into our true ECN environment.Trade in a true ECN environment with no dealing desk or price manipulation. IC Markets is the online forex broker of choice for high volume traders, scalpers and robots.
For USA & Canada clients i recommend FXChoice which is also a very good broker.