FOREX ENTRY HUB: FOREX TRAINING FOR BEGINNERS COMPLETE GUIDE

Basics
• Forex stands for Foreign Exchange, which is exchanging one currency for another.
• You sell one currency and buy another currency simultaneously and once you do so you have essentially involved yourself in the forex market

Basics
• The market is open 24-hours a day, 5 days a week and has different sessions depending on what time it is.

• Forex is the largest financial market with a daily turnover of more than $5 trillion.

• Currencies are always quoted in pairs, such as USD/ZAR, where you exchange USD for ZAR.

e.g.

• USD/ZAR = 13.3971

USD: Base Currency

ZAR: Quote Currency

Terminology

• Base Currency: The base currency is the “basis” for the buy or the sell.

• Quote Currency:The quote currency is the second currency in any currency pair

• Long/Bullish: In trader's talk going long/Bullish means BUY

• Short/Bearish: In trader's talk going Short/Bearish means SELL

• Pip: Percentage In point –A pip is the smallest price movement available in a currency.

The 4th decimal number e.g.

USD/ZAR = 13.39710 If USD/ZAR moves from 13.39710 to 13.39720= 1 pip

Instances where you have USD/JPY = 100.509 use 3rd decimal number as your pip

• Lot Size: Value used to determine profit or loss.

Micro Lot Size : 0.01 = 10 cent per pip

Mini Lot size : 0.10 = $1 per pip

Standard Lot size : 1.00 = $10 per pip

Market Order: A market order is an order to buy or sell at the current market price.

BUY: USD/ZAR Current Market price = 13.3971

Pending Order: Is an order to buy or sell at a price above or below the current price.

BUY: USD/ZAR at price = 13.4001

Take Profit: A level where you decide to exit a trade with profit

Stop Loss: A level where you decide to exit a trade with a loss

Types of Trading

Fundamental analysis:

Fundamental analysis is a way of looking at the market through economic, social and political forces that affect supply and demand.

Technical Analysis:

Technical analysis is the study of price movement. In one word, technical analysis = charts

WHATIS PRICE ACTION?

Price action is a trading technique that allows the trader to analyse the market and make subjective trading decisions based on past and present price movements.

Price action trading uses tools like chart patterns, candlestick patterns, trendlines, support & resistance and many more.

BAR CHART

Shows opening price, while simultaneously showing the closing price, as well as the highs and lows

CANDLESTICK CHART

Also shows opening price, while simultaneously showing the closing price, as well as the highs and lows.

LINE CHART

A simple chart that draws a line from one closing price to the next closing price.

Bullish Candlestick (BUY)

A Bullish candlestick simply means the price opened lower and closed up higher after a certain time period

SUPPORT & RESISTANCE

• Support: Lowest point the price reaches before reversing.

• Resistance: Highest point the price reaches before reversing.

e.g.

• Look at support as the floor.

• Look at resistance as the ceiling.

Broken support turns into resistance and broken resistance turns into support.

We call these support and resistance area’s by one word— zones.

1. Important characteristics of zones are as follows:

2. Zones are an area, not a price point.

3. Zones are spots on the chart where price reverses, repeatedly.

4. Zones may be extreme highs or lows on the chart.

5. Zones are where naked traders find trading opportunities.

6. Support and resistance zones rarely need to be modified.

7. Line charts help naked traders find zones.

How to find zones:

1. Start with a higher timeframe chart (Daily).

2. Use a line chart to find the zones.

3. Plot your zone where prices keeps reversing repeatedly.

4. Check if zone was once a support or resistance before

BUYING & SELLING PRESSURE

Understanding buying and selling pressure on candlesticks.

Every candlestick that forms tells you a story about the battle between the Buyers (Bulls) and Sellers (Bears), who dominated the battle, who is weakening and who finally won.