BASIC FOREX TRADING COURSE --- Lesson 7

THE FOREX TRADING STRATEGY

OK. Now you know how to use the Indicators on the Charts and what signals they provide. I will now show you a Strategy which will make you money whenever you get the signals. In order to avoid False Signals I am going to combine all the Indicators you have just learnt, on the same chart. This will strengthen and confirm the Signals we will get to Buy or Sell.

Look at the Chart below:

I have placed 3 different coloured lines on the chart, the Cyan coloured line is on the Moving Average crossovers, the Pink coloured line is on the MACD and the Light Green ones are on the RSI.

The Moving Average crossover has provided us with a signal to Sell but its not really strong enough, we wait for the other indicators to provide us a confirming signal.

Next we get signal from MACD crossovers (Pink Line) to Sell, we can enter the Market Short here but we wait for further confirmation from RSI.

A little later we get the Signal from RSI too (Light Green Line). The Green RSI Line crosses the Black Mid Point and goes below the 50 level, confirming and giving us a Sell Signal.

When all the 3 Indicators have given us Signals together, we enter the Market Short. We Sell Short. We are in the Market now. This is shown in the chart as trade A.

We stay in the Market until we get the signal from MACD telling us to get ready to get out of the Market, Reverse or Buy. Of course we are looking to exit the Market with a Profit.

We wait for confirmation from the other Indicators. Next we get signals from both RSI and Moving Average crossovers together. The RSI cuts and crosses the Mid Point 50 from below and Fast Moving Average crosses the Slow Moving Average from below telling us that its about time we should exit the Market. This is shown on the chart as B.

We Sold at 1.2870 and we Bought at 1.2820 making a Profit of 50 pips which is $500.00

Next we get another signal at C first from the Moving average crossovers, then from MACD and finally from RSI. When we get confirmation from all the 3 indicators we Sell Short again. We Sell Short at 1.8459.

The Market went down upto 1.8343 and has now moved up to 1.8354. You will notice that the Histogram has started weakening and the MACD is just about to give us a Signal to get out of the Market, other Indicators have not given us any signal yet. We shall wait for the confirmation before we Exit the Market.

Suppose we Exit at the present price of 1.8354, we shall make a profit of 105 pips which is $1050.00 profit. The Forex Broker charges 3 to 4 pips as their brokerage so if you subtract $80.00 from the 2 trades you made today you made Profit of $1470.00

Thats all Folks! You got the Goldmine now. Start digging.

When you get enough experience in Forex trading then I would like you to have a look at my other Strategies, specially "Trading The Forex News". This is highly Profitable and Easy to Trade.

At the end I have one request to make. As I have helped you learn Forex Trading and earn a Decent Income please help your Friends and Family members by distributing this course to them freely or charge them a nominal fee. I want everyone to Prosper and lead a Happy Life!

BASIC FOREX TRADING COURSE --- Lesson 6

MACD

MACD stands for "Moving Average Convergence/Divergence".

MACD is one of the simplest and most reliable indicators available. MACD uses moving averages, which are lagging indicators, to include some trend-following characteristics. These lagging indicators are turned into a momentum oscillator by subtracting the longer moving average from the shorter moving average. The resulting plot forms a line that oscillates above and below zero, without any upper or lower limits. MACD is a centered oscillator and the guidelines for using centered oscillators apply.

You don't need to go into much detail. All you need to know is that MACD measures the difference between 2 Moving Averages. Below you will find a chart with 2 Moving Averages, (5 period close SMA and a 10 period High SMA) and MACD Indicator. Again you do not need to do any calculation, your charting package will provide you with this indicator.

In the above example you will see that whenever there is a crossover between two MACD lines, it gives you a Buy or a Sell Signal.

When the Blue MACD line crosses and goes below the red MACD line its a Sell Signal and when the Blue MACD line crosses and goes above the Red MACD line its a Buy Signal.

You will also see the Histogram. Histogram is the green straight lines on top or under a Red Central Line. The Red Central Line is the 0 line.

You will notice that green lines in the Histogram are of varying length. The lines show the strength of the price movements. As the market is going up or down, the green lines are increasing in length, they then reach a peak and the gradually start decreasing in length. This warns us well before hand to get ready to exit the Market. We wait for the confirmation from the Moving Averages and as soon as we get the signal, we exit with a Profit.

You can trade nicely using just these 2 Indicators but now we are going to Strengthen our Arsenal by adding a third indicator called RSI.

RSI Relative Strength Index

RSI identifies Overbought and Oversold conditions in the Market. It is scaled from 0 to 100. When the reading is below 30 it indicates that the Market is Oversold, and when reading is over 70 it indicates that the Market is Overbought. So what does it mean? It means that when the Market is Overbought the trend is about to change and its good time to Sell Short. And if the reading is below 30 the Market is Oversold, its a good time to Buy.

RSI also confirms the Trend Formation. First look at the chart below and then I will explain how to read and interpret the chart.

Look at the above chart very carefully. You are now already familiar with the Moving Averages and how we interpret their indications and signals. If you look at the lower part of the chart, you will find that the RSI has been plotted as a Green coloured line running up and down the Black Line. This Black line is the mid point (50) of the RSI . Both above and below the Mid Point you will see broken red lines at 70 and 30.

If there are equal number of Buyers and Sellers and they all were buying and selling at any one particular price contineously then we will see the Green RSI Line contineously running along the mid point of 50. But when there are more Sellers than Buyers the Green line will stay below the mid point of 50 and when the market gets Oversold then the RSI line drops below the 30 line and eventually the market has to come up to level off. This is the ideal time to buy.

You could also buy when you see the RSI line cutting and crossing the Mid Point of 50 from below and Sell when the RSI line cuts and crosses the Midpoint of 50 from above as shown in the above chart. These points are shown in Pink.

You have now completed your Basic Forex Trading Course

Next, I am going to give you a Forex Trading Strategy to Trade with.

Keep watching for your Next Lesson...

Forex Trading Advice and Tips

1. Accept the possibility of losing your money as an inevitable fact. Every beginner trader should be aware that no one is safe from losses in the currency market. The basic rule of online currency trading is to keep the profit above the losses.
2. Bid only with a carefully thought up plan. Before you start trading, you should determine how much of your own money you are willing to risk and what profit you expect. This will be your balance of risk and profit. Successful traders never enter trades without a clear goal.
3. Do not be afraid of the foreign exchange market. Many novice traders are afraid of uncertainty and risks of the foreign exchange market. Those who can overcome themselves are rewarded with a substantial increase of investments.
4. Take responsibility for your decisions. Successful traders will never disclaim personal responsibility. It is you who enter the market and it is you who assume all responsibility for the transactions, profitable or unprofitable.
5. Do not let greed take over. When bidding begins successfully, traders often forget about the previously set goals, hoping for the same successful continuation. However, the market is very volatile and trends may quickly end. Once the target price is reached, immediately withdraw the profit or raise the stop-price to avoid losses.
6. Effect of news on the trades. The increase in trading volume caused by a much-publicized event leads to the movement of prices, which is sufficient to ensure that traders use to their advantage short and rapid changes on the market. Inexperienced traders often aim for one trading transaction per day, which would make considerable profit.
7. Do not have illusions. If an open position is getting worse, do not stay on the market in the hope of the trend turning in the direction that is favorable for you. Immediately leave the market.
8. Remove emotions. The cause of losses often lies in excessive emotionality. Turn off the emotions during the transactions. Stick to your plan and do not forget to set stop loss orders.
9. Trend is your friend. Trade along the direction of the trend and your profits will grow.

Last recommendations before starting:

1. Do not hurry. Beginner traders often start several trades, and then notice that they are not able to monitor them all. You can make profit in Forex when the exchange rate is going up and when it is falling. Successful earning is only possible for one currency pair. Therefore, first focus on one currency pair and get to the others gradually.
2. Remember the stop order. A frequent cause of losses is wrong money management. To prevent huge losses, you must use a stop order.
3. Trading system. Every trader has a trading system, which they adjust to their liking. Some traders prefer a system of trading once a day, other are attracted by longer periods. The idea is stick to the original plan of trading. Several unsuccessful trades may not always indicate your system is unprofitable.
4. Take you profit using orders. A common mistake of beginners is early closing of trades. Do not step away from your online forex trading plan. This will allow you not to lose potential profit.
5. Do not turn profitable trades into losses. Attentively monitor the movement of the market. As soon as positive values are achieved, set the stop order at the level of entrance to the market. This will protect the money. Next, move the stop order after the trend so that trades become profitable for you.
6. Frequent entrances. Frequent entries into the market are not bad, but if you use them inaptly, you can quickly go bankrupt. The strategy is that the trader with a negative position value increases its size, assuming that the market will return to its former condition and all positions will be closed with a profit. However, if the exchange rate goes far away from the previous level, the losses will be huge, so you had better just buy and hold.
7. Pre-planning. Do not enter the market only because prices are sharply rising or falling. Plan ahead for how you will bid. Have a clear goal of your entry, the exchange rate for profit taking order and the moment when to stop.
8. Do not lose the investments. You should know how to save the money you earned. Quickly close the losing positions and keep open the profitable ones.
9. Momentum and trend.Beginner traders often do not realize that with the emergence of a new trend, momentum is growing. New traders create a strong impulse as they join other trades on the market when the trend is growing. Trade when the momentum is in your favor. It will push your trades in the right direction and you will reach the point of profit taking even faster than you expected.
10. Do not devote too much time to unprofitable trades. If you see that the opened position is loss-making, the best solution would be to close it and move on to another, thus minimizing your losses. The currency market is full of bargains, so there is no use wasting time on unprofitable trades.

By following the recommendations above, you will quickly see an improvement in your work on the foreign exchange market. Now you can safely start real trading.

Forex Expert Advisor

Inexperienced beginners are always interested in finding a trade robot that does all the work, so that the trader does not have to lift a finger. This idea has been pursuing all traders of the computer age. And the burden of responsibility for decision making, which wears out the nerves and psychics of trader, now falls squarely on the trading forex expert advisors.

What is a Forex Expert Advisor?

The forex expert advisor is a program capable of performing in the terminal any action following the instructions of a trader, without his direct involvement. All tasks are performed automatically or mechanically, this is why the advisors are called experts or mechanical trading systems (MTS). Simply put, this is a program sending applications to a broker without any intervention of the trader. You install a profit forex expert advisor to the existing forex online trading platform, which is connected to the server broker, adjust all the settings, and after that the advisor begins trading according to a preset strategy.

Benefits of Forex Expert Advisors

From a psychological point of view, the forex expert advisor is irreplaceable. A trader decreases the responsibility for decision-making, and the trades become less stressful. The trader does not need to have an in-depth knowledge of technical and fundamental analysis, since all the calculations are already included in the program. Besides, the advisor is able to handle the trading signals even when the trader is absent from the workplace.

Writing An Forex Expert Advisor

Forex Expert Advisors for MetaTrader4 are written in the MQL4 programming language. This language was developed by the manufacturer of the trading terminal specifically for writing expert advisors. It allows the trader to program the trading system without any difficulty, which will trade in online mode day and night. Programmers familiar with this language will not have any difficulty in doing the job. For ordinary users this will be a more difficult task.

Forex Expert Advisors Indicators

You can create you own technical indicators for more effective work of advisors. They will be the great addition to the existing indicators in the terminal MetaTrader4. The purpose of using advisors indicators is to implement analytic functions and generate trading signals.

Built-in And Own Forex Expert Advisors

The MetaTrader4 trading terminal has several built-in expert advisors. They have the function of an independent trading system and dub the trading signals. They are very popular among beginners and were created specifically to demonstrate the abilities of programming the MetaTrader 4 Client Terminal.

The possibilities of creating your own advisor are simply dazzling. You can set various orders by price and time, automatically open the counter orders, etc. So these programs are able to replace the trader at his workplace.

Testing Forex Expert Advisors

The trading terminal can not only write advisors, but also check them on historical data before using, which is another unique feature of using the advisors. Testing is very useful, since it helps to measure the ability and effectiveness of a mechanical trading system on historical data, estimating the chances of future earnings and errors. Testing allows you to start trading without your intervention, if you know the expert behavior in different market conditions. For this purpose, the terminal has a special window where you can also optimize the input parameters of advisors.

Parting Words For Beginners

Beginners may find the capabilities of advisors to be very difficult, but after a month of currency trading a trader can begin to program his own automated trading system that will positively affect the outcome of the trader's work. Even if you resist trusting your money to a computer program, you can configure the advisor to five sound alerts, which will greatly facilitate your work so that you spend less time on graphical analysis and expecting a signal to open and close positions.

You can find lots of advisors on the Internet, but getting a profitable one is very difficult, and using every single one is exhausting and may result in depleting your deposit. That is why you are advised against buying the first advisor you come across. Many advisors demonstrate excellent results when tested on one currency pair, but perform poorly on others. It is better to use the advisor for those instruments that you have tested on.

Start Forex Trading

The Forex trader is a member of the largest financial market. The forex trader is a currency speculator, but do not be confused by this word. This profession has nothing to do with illegal earnings. "Speculation" is Latin for "observation", and the word most accurately describes the work of the trader.

Traders on Forex deal with buying and selling currencies. The basis of such deals is simply arithmetic: buy low and sell high. For example, if you buy 1,000 at the rate of 1.5342 for 1,534 dollars, with 1:100 leverage you can open position GBP/USD amounting for 0,01 lot (1,000 GBP), while your deposit is only 15.34 dollars.

Now, to complete the deal, you need to close the position by making the reverse transaction. Noticing the growth of GBP rate to 1.5392, you make another deal now selling GBP/USD. Your profit is $5. However, if the exchange rate went down, you would incur losses. To succeed at forex online, you must be patient. Continuous self-training is the key to success.

Successful traders advise that beginners should spend several months testing start forex trading strategies on demo accounts. The time spent learning the rules of trading will save you money and nerves, and help to avoid many future difficulties.

To succeed where others fail, follow the simple tips:

• strive to fill all the gaps in your knowledge about Forex;
• motivation, persistence and discipline should be your priorities;
• choose a reliable broker with an impeccable reputation;
• use a professional and convenient forex trading terminal;
• do not rush to immediately earn millions;
• be prepared for losses, think of them as an integral part of forex trading;
• do not risk big money until you learn how to manage risk;
• never open a position for your entire capital;
• do not let passion take over sense.
• Traders not knowing the basic principles of working on Forex must clearly understand that the financial market provides equal opportunities for both losing capital and increasing it.

What is CFD?

CFD (“contracts for difference”) are contracts signed by two sides for the difference in exchange rates of a particular financial instrument. In financial markets, the CFDs are used to trade future and stocks contracts.

There are two ways to earn on shares growth:

Sign a contract with the stock exchange where trades are carried out, and buy shares through a brokerage company.

Open an account with a brokerage firm and enter into Contracts For Difference for the necessary securities. Thus, CFD makes it possible to earn on every change in stock prices without signing an additional agreement with the exchange.

What Is the Advantage Of CFD?

The fact is that a trader pays a certain amount of money for any purchase made. In addition, the trader pays other fees: to the depositary, etc. Moreover, even if you are not making deals, you will have to regularly pay for account maintenance. However, CFD delivers traders from such a necessity. Traders don’t buy shares, but sign an agreement of stock prices change and profit from prices difference without the extra costs.

What is Forex trading?

FOREX (FX) stands for “foreign exchange” (FOReign EXchange). The essence of the Forex financial market is to trade (buy and sell) currencies at market prices.

Forex is actually a group of banks participating in trades, which daily buys and sells currencies for over three billion dollars. The currency trading market operates during five business days.

Forex is often mistaken for an exchange, which is not true as it does not have a specific address, like the London Stock Exchange or the New York Stock Exchange. Forex Trades are conducted 24 hours a day, so you can always buy or sell currencies. Forex Trades are carried out over the telephone and through special software, the forex trading terminals.

BASIC FOREX TRADING COURSE --- Lesson 5

INDICATORS

There are many indicators traders use but I intend to make your life much easier and want to keep it as simple as I can. If you go deep into each and every indicator, you will get confused and could make wrong decisions.

I am going to give you a Strategy based on only 3 indicators. You must first try to understand how these indicators work so that you know what you are doing when you apply the Strategy based on these indicators.

No Rocket Science, just simple enough for anyone to understand. I am going to teach you how to use (1)MOVING AVERAGES (2)MACD and (3)RSI

MOVING AVERAGES

No one can trade without the use of Moving Average indicator. It tells us a great deal about how the Market is turning. This is a MUST indicator.

Moving average is calculated by adding the X number of closing prices and then dividing by X. For example you take 5 candles closing prices, add them together and then divide them by 5. This will give you an average of 5 candles closing prices. On a chart there are many many candles and the calculation goes on and on and we see a smooth line running across the candles up or down. Now the good news is that you do not need to do any calculation. The charting package you will use will do the calculation for you.

You can adjust the candles to whatever time period you like. For example 1 day, 4 hours, 30 minutes, 1 minute, etc. A 30 minute candle will show you that during the 30 minutes period where the price opened, how much did it go up and down and where did it close.

By visually inspecting the Moving Average you can see where the trend is. Is the Market going up or is the Market going down.

Here is a Moving Average which shows a Down Trend.

There are many variation of the Moving Average indicator such as the Time Period, Simple or Exponential or Weighted, etc. At this stage of your learning you do not need to remember them or use them until you get some more experience and proficiency. All you need to know is that we use 2 Moving Averages, one fast and the other slow.

If you are Day Trading as I do, you would normally use a 5 period Close Simple Moving Average(fast) and an 8 or 10 period High Simple Moving Average (slow). I use the 10 period High Simple Moving Average to indicate to me when to get out of the market with a profit.

If you are Trading Medium or Long Term then you would use other periods of say 33 periods to 100 periods. I am not teaching you the Medium and Long term Trading here. The reason I am teaching you the Day Trading technique is to use my Strategies to MAKE LOTS OF MONEY.

The combination of 2 Moving Averages tells us when a trend is about to change. When the Fast Moving Average crosses the slow Moving Average from below, the trend has changed to an uptrend, the prices are going up (good time to Buy) and when the Fast Moving Average crosses the Slow Moving Average from above, the market has changed to Downtrend (Good time to Sell). An example is given below:

In the above chart you can clearly see that the Red Moving Average (Fast) line has crossed the Blue (Slow) line from above and prices have started falling down. At this point we Sell and then we Exit when we see that the Red line crosses the Blue line from below. We get out of the Market with a Profit.

Then we see that the Red line has crossed the Blue line again from above. This gives a signal to Sell again. But its a False Alarm as you can see for yourself the price just stalled and went up again. Had we entered the Market again we would have made a loss as the Market went up. In order to avoid getting False Signals, we use additional indicators such as MACD and RSI for confirmation.

Next we see that the Fast Red line has crossed the Slow Blue line from below. This is a great point to Buy. And when the Red Line croses the Blue line from above it is a good time to exit the Market with a Fat Profit.

Life is not that easy, as you can see many ups and downs we call whipsaw. But there are trader who sit infront of the computer all day long and keep taking small profits every now and then. This is called Scalping. I intend to develop a Scalping Strategy later on when I get the time to do so.

In order to avoid getting False Signals and sustaining losses we use some additional indicators to confirm with the Moving Average when to enter the Market and when to get out with a Profit. One of them is MACD.

In your next Lesson, you will Learn all about MACD and RSI Indicators and How to use them for confirmation of an Entry Signal.

Keep watching for your Next Lesson...

BASIC FOREX TRADING COURSE --- Lesson 4

Basically there are 3 types of Markets:

The Trending Market

The Ranging Market and

The Break Out

Lets discuss the Trending Market first.

TREND AND TRENDLINES

We have a saying in the Stocks & Shares and Forex Trading circles, "Trend is your Best Friend" or "Make Trend your Friend". This means you should always trade in the Direction of the Trend.

There are 2 types of Trends, The Up Trend where the Prices are going up and the Down Trend where the prices are falling down.

We always Buy in an Uptrend and Sell in a Downtrend to make a Profit. This means Buy at a lower price and Sell at a higher price.

Here are the Uptrend Candles: (The Market is going up)

And here are the Downtrend Candles: (The Market is going down)

You can either visually observe where the trend is or draw trend Lines. I have drawn an Up Trend Line below the Candles showing that the Market is going UP.

And here are candles with a Down Trend Line:

The RANGING MARKET

The figure below shows the Ranging Market.

It means that the prices are moving within a Range.

The Price goes up and then comes back down and then goes back up and again comes down, it keeps doing this again and again withing a range.

Where the price doesn't go up further, we call that point as the Resistance Level, meaning that the Market is Resisting going up any further and where the Market goes down and bounces up again is called the Support, meaning that the Market has a strong support and is not letting the price go further down.

This Support and Resistance Levels are very Important in Forex Trading.

SUPPORT & RESISTANCE and The BREAKOUT

Look at the chart above. You will find 2 green lines. These are the Support and Resistance Lines. Resistance means that the price resists going up. This is sort of a sealing. Whereas Support means that the price is supported from falling below this price.

The Buyers (Bulls) find that the price at the support level is attractive enough to buy. The Sellers (Bears) do not wish to Sell below this price as it seems very unattractive price to them.

Thus a tussle goes on between the Buyers and Sellers and the price remains within these Support and Resistance Lines. This is also called a Channel. The price stays within the channel and it is a very good place to buy and sell as long as the price remains within the channel going up and down. It is also called whipsaw.

When there are more Sellers than Buyers the price falls down. We can see whats going on in the market by studying the charts. When the Support line gets broken as in the above chart the Sellers want to get rid of their holdings and there are not that many Buyers in the Market. Thus the price falls, the Support Line is broken and it is a good time for us to Sell Short. (Sell Short means that you do not hold any holdings in hand but you sell in the hope of buying later at a much less price in order to make a profit).

Similarly when the number of Buyers exceed the number of Sellers the price goes up and we can see this happening on the chart as the Resistance gets broken and the Market starts moving up. This is a good time to Buy in order to Sell at a higher price later on in order to make a profit.

Here is a Chart which shows the Resistance getting broken and the price moving up:

By now maybe you are thinking... Wow! Its so simple and easy to make Millions!!!

But as a matter of fact its not that easy otherwise everybody would become a Millionaire within months. The reason being that we get Whipsaw in the Market. The prices keep going up and down and we do not know exactly when there is going to be a great Trend Up or Down, we therefore use some Indicators to indicate and give us signal when to get in the Market and when to Exit with a Profit.

In your next Lesson, you will Learn all about Indicators and How to Read them.

Keep watching for your Next Lesson...

BASIC FOREX TRADING COURSE --- Lesson 3

Now to the basics.

There are basically 3 types of charts:

Line Chart

Bar Chart and

Candlestick Charts.

I shall be concentrating on the Candlestick charts as it gives us complete information.

Here is how a Line Chart looks like:

Here is how a Bar Chart looks like :

And here is how each bar looks like:

Here is how a Candlestick Chart looks like:

And here is how candlesticks look like:

When the price is moving up we get the White Candle and when the price is moving down we get the Black Candle. If you study the White Candle first you will notice that the price opened at the base of the body and came down to the Lower Shadow then climbed up to the Upper Shadow (also called the wick of the candle) and eventually closed at the upper end of the Body. This is called the Ascending Candle which shows the price is on the uptrend. The Uptrend Candle is sometimes coloured Blue or Green in some coloured Charts.

Now come to the Black Candle. You will notice that the price opened at the upper end of the Black Body, went upto the Upper Shadow then came down to the Lower Shadow and eventually closed at the bottom of the Black Body. This is called the Decending Candle. This type of candle shows that the price is falling and the market is at a downtrend. In coloured charts this type of candle is usually coloured Red.

And here is how the coloured candles look like:

In your next Lesson, you will Learn all about Trends and Trend Lines and How to Read them.

Keep watching for your Next Lesson...

BASIC FOREX TRADING COURSE --- Lesson 2

How Currencies are Traded?

Currencies are quoted in pairs, such as EUR/USD or USD/JPY. The first listed currency is known as the base currency, while the second currency is called the counter or quote currency. The base currency is the "basis" for the buy or the sell. For example, if you buy EUR/USD you have bought Euros (and simultaneously sold dollars). You would do so in expectation that the Euro will appreciate (go up) relative to the US dollar.

Currencies are traded in lots, which represent 100,000 units of the base currency. If the EUR/USD is quoted at 1.2512, that means that 1 Euro is currently worth just over $1.25.

If the market moves from 1.2512 up to 1.2513 that represents a move of tick or one pip. A pip is the smallest increment a currency pair can move and in the case of the EUR/USD currency pair a pip is worth $10 in a 100K account and is $1 in a mini account. A mini account is One/Tenth of a Regular Account.

If you think that the Euro will rise relative to the U.S. Dollar you would buy one lot of the EUR/USD currency pair.

Suppose the EUR/USD is trading at 1.2250 and you buy it at this price and when you sell it, the price is at 1.2275. This means you just made a Profit of 25 pips.

You bought at 1.2250 and sold at 1.2275 for a profit of .0025 or 25 pips. Each pip is worth $10 in the 100K account therefore you make a profit of 25 pips x $10 = $250.00

In FX, Short for Forex, you also have the opportunity to SHORT SELL (sell first and buy later) a currency pair if you think it will fall in price. Short Sell means that you can sell without owning any thing in hand and later when the price falls you can buy at a much lesser price than your original sell price and hand it back to the person you sold to. Here you make a profit by first selling expensive and then buying cheap. The difference is your Profit.

If you think that the Euro will fall relative to the U.S. Dollar you would sell (Short) one lot of the EUR/USD currency pair.

Suppose EUR/USD is trading at 1.2250 and you sell it at this price and when you see the EUR/USD is trading at 1.2200 you buy it. You just made a profit of 50 pips. Therefore you made a profit of $500.00

The opposite will be true if the trade went the other way round. You will incur losses. In order to limit our losses we apply Stop Loss to our trade. In our case we shall use a Stop Loss of 10 pips. It means that we are willing to lose upto $100.00 not more than that.

In your next Lesson, you will Learn all about Charts and How to Read the Charts.

Keep watching for your Next Lesson...

Forex News Trading

Traders on the Foreign Exchange market, Forex market for short, can potentially make thousands of dollars based on the volatility and fluctuations of a country’s currency. To better themselves and have a leading advantage over other traders, some Forex traders and investors participate in a practice known as news trading. The risks are very high, but the potential gains can be worth thousands of dollars and many traders and investors use this technique.

The technique of news trading is quite simple. It is the trading of foreign currency immediately before or after an important economic news announcement. After such announcements, there is a high possibility that market prices will fluctuate, either for the better or worse, depending on the announcement. For example, if the U. S. Federal Reserve announces another increase of the interest rate, many traders might invest in the U.S. dollar as it is expected that its value will appreciate. The main advantage of news trading is the potential for a country’s currency to make huge gains or losses in very little time. Within minutes of an economic announcement, a country’s currency can gain or lose one hundred points almost instantly. The potential of huge profits attracts Foreign Exchange traders and investors, however there are various risks associated with news trading.

Like any investment, there is always a risk, and news trading on the Forex market is no different. Though the potential profits are huge, the losses are also equally as large. The dangers of news trading come from the fact that a trade must be made quickly or else you are going to lose. If you are caught on the bad side of a trade, your money will be gone quicker than you can blink your eye. You will lose money so fast that there won’t even be time for you to manually close your trades, leaving you with nothing. Stop-loss orders are also potentially dangerous as there is a high probability of slippage because of the sudden price fluctuation.

Though some investors and traders might get lucky trading news, there is only a small probability that you will make a profit. Even if you are an expert news trader, you should still be very, very cautious when participating in this practice. Successful news trading depends solely on how you get your news. The most successful news tradersare the ones with the fastest news feeds and those that are able to quickly place their trades immediately after an announcement has been made. Even using other forms of news trading, such as placing orders above or below the market price is still a guessing game, and those traders in the market who base their trades on guesses, won’t have much money after a short time.

For many Forex traders and investors, their trades are dictated by technical indicators and price indexes. Hours are spent researching every indicator, taking every risk into account and then making a decision based on everything they have studied. However, for a Forex news trader, none of this matter, and the only thing they take into account is economical news announcements.

News trading is possible because the Forex market is always open, unlike many financial markets. In a financial market, securities trades of certain stocks are suspended when an important company announcement is being made. These announcements are usually made after the market has closed for the day. However, because the Foreign Exchange market is open 24 hours, any economic announcement will have direct affects on the currency of that country, and maybe others as well. In the Forex market, there are eight major currencies that are traded, as well as over seventeen derivatives to be traded as well. This means that on any given day, there will always be economic announcements from any of the major traded currencies. The major trader currencies are as follows:

1. U.S. Dollar (USD)
2. Great British Pound (GBP)
3. Euro (EUR)
4. Japanese Yen (JPY)
5. Australian Dollar (AUD)
6. Swiss Franc (CHF)
7. Canadian Dollar (CAD)
8. New Zealand Dollar (NZD)

Because of the availability of each currency, currency pairs, and its derivatives, such as USD/JPY, EUR/USD, AUD/USD, as well as several others, each currency can be traded at any given time because these currencies are globally traded.

Any Forex news trader or news investor will have to have the latest most up to the moment news announcements. Even if the news announcements are only a couple of minutes old, this can have devastating effects for any trader who has risked any sum of money. Most news traders like to keep an eagle eye on any news regarding economical activity, but most importantly news dealing with interest rates changes, FOMC rate decisions, retail sales figures, inflation indicators such as the consumer price index (CPI), producer price index (PPI), unemployment figures, industrial production announcements, boost in business and consumer confidence, as well as business sentiment surveys. Manufacturing sector surveys, trade balance release details, and foreign purchases of U.S. Treasuries may also prove useful for a news trader to better make decisions regarding when or when not to trade.

However, it should be remembered that these news announcements can have ranging impacts on a country’s currency, and after an announcement, the volatility of a currency may greatly fluctuate. It is important to take advantage of news that creates movements in volatility that will last for a few minutes or even hours. Trading on the Forex market based solely on news is a difficult and sometimes dangerous practice. However, there are some indicators that can make a news trader’s job easier, such as breakout indicators (Bollinger bands, breakout of a candlestick bar, or a price bar). Research has proved that news announcements can impact a currency’s value quite severely, in some cases it can gain or lose anywhere from 33 pips to 124 pips, opening up the ideal trading opportunity looked for by news traders. If a news trader is able to act quickly enough, even the smallest news release can be turned into a potential profit of thousands of dollars. However, it is important to remember the volatility of such announcements, and although the profits seem endless, the losses can happen too.

BASIC FOREX TRADING COURSE --- Lesson 1

I am going to teach you the basics of Forex Trading so that you may apply my Strategies and make lots of money.

I shall not go into great detail and make it complicated for you. I want to keep it as simple as possible so that any layman can easily grasp the Forex Trading Technique. Its not Rocket Science Folks. I shall keep it very simple so that you may understand and pick up very quickly how to Trade Currencies.

The first thing to do is to open a Practice account with any Currency Trading Broker. I have given a list of some brokers at the end of this course. You may also find some more if you go on Google Search or Yahoo Search.

Once you register yourself and open a Demo Account or a Practice Account, you will be able to trade without money. It is very essential to Practice for at least a month before you start trading with real money. Only trade when you gain enough confidence. And only trade with the money you can afford to lose. Currency Trading is very risky. Lots of people get wiped out of their savings. Please remember you are not Gambling, you are Trading. If you have a gambling attitute then you willl definitely lose all your money, but if you keep it as a Business, I am sure you will make lots of money. Once you learn the Forex Trading Technique, you will need some Trading Strategies. I have developed various Trading Strategies through which you can make consistent profits. But to keep it simple and profitable I would recommend "Trading The Forex News". This Strategy is easy to understand, easy to use and all of our members are making consistent profits.. First practice it on a Demo Account.

The beauty of Currency Trading Business is that it can be done from anywhere in the world wherever there is an internet connection. You can take many holidays a year and while you are in your 5 star hotel balcony facing the beach, you can relax and trade through your laptop while having a drink.

This was just an introduction to Currency Trading.

In your next lesson you will start learning the Basics.

Keep watching for your Next Lesson...