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| Learn how to trade Forex. |
Here we go;
INTRODUCTION, WHAT IS FOREX TRADING?, WHAT IS TRADED ON FOREX?, WHO IS A FOREX BROKER?, TRADING TIMES AND TRADING SESSIONS, TERMINOLOGIES USED IN FOREX, FORMS OF TRADING, FORMS OF TRADING, CURRENCY PAIRS, MT4 INTERFACE PART1.
Forex simply means foreign exchange. Forex is the largest market in the world with a total daily liquidity of $5.3 Trillion dollars. It is larger than the New York Stock Exchange market and Cryptomarket combined.
Yesterday 5th June the cryptomarket value was $218 Billion, according to Coinmarketcap. The statistics are online. You can as well search for more details. This is just to show the liquidity of the Forex market and how large it is. This is a brief intro which i think we will continue to see more as were read.
WHAT IS TRADED ON THE STOCK EXCHANGE MARKET
It is not obviously a market we buy and sell shoes, clothes, bags and popcorn e.t.c . In Forex Market, we trade currency pairs like the ones listed here; USD, EURO, POUNDS, AUSTRALIAN DOLLARS, JAP YEN, SWISS FRANCS, NEW ZEALAND DOLLARS e.t.c... Apart from currencies which is the most traded, commodities like precious metals, sports, oil are on the line.
Two currencies are traded against each other. For example you can trade YEN against Dollars which means Yen will either rise or fall against Dollars or Cedis against Dollars. (real demonstrations are coming up as you read)
WHO IS A FOREX BROKER
These are firms that gives you access to the FOREX Market by providing a trading account for you. They give traders what we call Leverage.( You will see it soon). They also provide support functions to the traders. There are various Brokers in the Forex Market like; Hotforex, Fxtm, Fxcm, Fbs, LiteForex and many others...
TRADING TIMES AND SEASONS
Now we have started penetrating into the real roots of Forex Trading so open your brain now. You need to know the Forex Market. There are various Trading Times and Trading Sessions in Forex. They include; SYDNEY SESSION, TOKYO SESSION, LONDON SESSION, FRANKFURT SESSION, NEWYORK SESSION. Sessions names are derived from the cities where most transactions are done. E.g SYDNEY rep Australia and other countries around the time zone and the others as well.
Forex is actually 24 hrs market that's why it is regarded as the market that never sleeps except on weekends. Nor matter where you find yourself on earth, or on any time zone you can trade.
Lets talk now of the trading times; SYDNEY SESSION opens by 9 PM GMT, Tokyo Session opens by 11 PM GMT, London Session opens by 7AM GMT, Frankfurt Session opens by 8AM GMT and the Newyork Session opens by 1PM GMT. So almost the whole of West African countries' time zone should be that of London. Not that if its not open, you can't trade. For the rest of the world, use your time zone and the corresponding Session above.
All Sessions last for 9 hrs so just add 9 hrs to their opening Times to when they will close.
Please, one important thing to note here... Many Forex Traders don't actually understand this because they were not taught. Its good to trade when two Markets are open at the same time i.e when 2 Sessions are open.
This is because volatility is always more when 2 or more Sessions are open. In Forex Market, more volatility means more money. So as a Forex trader, you won't wanna trade in a quiet market because there won't be fluctuations and its movements that makes money for you the trader.
You will understand this soon. E.g by 8 PM GMT, London Session and Frankfurt would be open and in fact Tokyo will soon join and volatility will be the order of the day. So always time your trading between 2 sessions. An edge in the market.
You must have heard about Forex before I' am aware though you may not know how to trade the market. Hey some of your friends keep the secret to themselves. They would rather help you out on their nice cars, buy you hot drinks.
TERMINOLOGIES USED IN FOREX
In the field of Forex, you would need to learn about the terminologies so as to communicate with the market.
To go Long means to Buy.
To go Short Means to Sell. What we are doing in Forex is buying and selling.
Bullish Market means the market is going upward.
Bearish Market means the market is going down
Ranging... when a market does not have any particular direction. Its neither moving upward or downward.
Trending... the market has a direction, its either moving downward or upward. So people will say the market is trending upward or downward.
Hawkish refers to the Central Bank Governor or personnel of a country. They tend to be liberal on the interest rate and are willing to increase it.
Dovish is simply the opposite of Hawkish because they are very restrictive and they do not want to temper with the interest rate and this is bad news for investors.
Currency pairs have names e.g Dollar is called Greenback, the Pound is called the Cable, the New Zealand Dollars is called kiwi, the Australian Dolars is called Aussie e.t.c...
FORMS OF TRADING
There are basically two types of trading; Fundamental Analysis and Technical Analysis.
Fundamental Analysis is also known as news trading. Here you are analyzing the Forex market with respect to News. Everyday various news are being released by these major countries and they can be positive or negative which can affect the currency pair and you make trading decisions based on what you heard.
Those in the Crypto Trading would tell you that you only make money when a coin is appreciating but in Forex we make money both ways. So if a currency is appreciating, we go long on the pair but when a currency depreciate based on news, we go short on the pair. The News is released by the United States of America and it makes the most volatility in the market.
In FOREX, we calculate profit in Pips(we talk about the soon). On a NFP news day, you don't need too much trading pairs to make huge profit. Just a single currency can make a move of 80 Pips within 5 mins. The News is up by 12:30 every last Friday of the Month. So never fix anything to do at this time of the month. Even your marriage.
So some people on this same day will earn what you have been working for the whole 12 Months on NFP afternoon. The News is released by the US bureau of Labour Statistics. It contains the amount of New Jobs added to the US Labour Sector in the previous sector. It also tells which sectors in the economy the New Jobs were added so as to guide them to invest.
Technical Analysis is a form of trading when you analyze the market using Charts, Patterns, Candlesticks, Fibonacci, Pivot Points, Elliot waves e.t.c... Technical is the most popular because News is not released everyday so you can't just depend on Fundamental Analysis alone. You must learn Technical as trader. This one completely makes you a Forex Trader.
Among the two, no one is superior than the other and non is used in isolation.
CURRENCY PAIRS
Here we would need to download MT4 App as we get into more serious business right now. Open the App and register. We will all start with a Demo Account. Open App and click on "login as Demo" then where it is written start without registration. Download app here . It's a step by step. To add more currency pairs, click the plus sign to see folders of where to add more currency pairs. But just add only Forex currency pairs. We would add others like oil, Gold, Commodities later.
Currency pairs involves Base and quote currency. You will find EUR/USD, one of the most common currency used on the Forex market.
We call two currencies a pair or quote and it may be any currency. USD/EUR, USD/CFA, USD/NGN e.t.c EUR/USD means EUR is the based currency and USD is the quote currency. Same as Ghc/USD means Ghc is the base while USD is the quote.
We always trade quote currencies against based currencies meaning that we predict a rise or fall in quote currency. EUR/USD means we predict the USD will either rise or fall against EUR and you make profit.
Stage 2 this evening come 7 PM GMT still by Rooney N Nshing Advertising Hub .
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