FOREX TRADING LESSON 1

Let start with the meaning of forex

Forex in the simplest way is the act of trading currency for example trading USD against EUR therefore you call USDEUR a market . Now for you to start trading you will need to sign up with any forex brokers later on I will tell you how you will register with them but the one I trade with now is fxopen it is one of the best and their terminal is called MT4 also known as Meta trader 4 .

In this terminal we have the candlestick chart, the line chart and also the bar chart. The best way is to trade with the line chart because it is very straight forward. Now I will start with the forex strategies for trading below

THE TAKE PROFIT[buy]

This is a tool for taking your own profit from a market whether in long term or short term take a look at this chart below long term [buy]

 

 

The chart is for the market USDCHF .The first thing I want you take note of is the slightly thick horizontal line that is at the point 10070 this is called the entry price .Also look at that two blue lines in the chart, the vertical green line between that two blue lines is a very good opportunity to trade that’s from point 10070 up to 10175 and more that opportunity there is to buy at 10070 because it is going up so you place an order to buy which is at the top of the terminal .Then our order will look like this

USDCHF

Position: long [buy]

Volume: 0.1 meaning the risk of losing your money will be 0.1 there are volumes of 1.0 , 8.0 with these volume it is greater risk of losing your capital unless your capital is very substantial

Entry price: 10070

Take profit: Since it is buy going up you will increase your entry price by either 10,20 or 30 pips depending on you but I will advise u start with 10 pips and increase later when there is still opportunity to buy .PIPS is called price interest point in the simplest way it is like a distance in which you make your own profit. So now if we use 10 pips you will add 10 to the entry price 10070 therefore your take profit will be 10080.

 THE TAKE PROFIT [SELL]

Have given the simplest meaning for take profit above .we talked about take profit for buy now we will talk about take profit for sell using the chart below. In take profit buy it is called long because it is going up but in sell it is called short because it is going down .look at this chart below

it is a chart of GBPUSD you will first take note of the entry price which is that thick horizontal line to point 1.6588 therefore 1.6588 is the entry price .using the same chart below the distance between that two point that I marked with red I mean from point 1.6588 to point 1.6445  is an opportunity to sell because it is going down unlike in the first chart which is going up .so you will place an order to sell which is at the top of the terminal and our order will look like this

GBPUSD

Position: short [sell]

Volume: 0.1 meaning the risk of losing your money will be 0.1 there are volumes of 1.0, 8.0 with these volume it is greater risk of losing your capital unless your capital is very substantial

Entry price: 1.6588

Take profit: since it is sell going down you decrease your entry price by either 10, 20 or 30 pips but start with 10 pips so when you decrease your entry price 1.6588 with 10 pips it will be 1.6578 that will be your take profit then if you see there is still chance to trade you can increase it later. Later in our lesson I will teach you how to modify a order

 EXIT STOP LOSS

The exit stop loss is a tool use for managing fore risk. It is a price at which you intend leaving the market with loss. Therefore understanding how to use the stop loss is very important. The level of risk a trade carries is determined by the value of the stop loss. A trade with a higher stop loss means more risk or reduced level of profit if the trade must be controlled to a fixed risk level. Also the value of your stop loss is determine by the fore strategy you are using .Some strategy uses fixed pips exit stop loss while others use variable exit stop loss. But for people like you I will advise that you use a variable exit stop loss

Now the rule for calculating stop loss is by subtracting the desired pip value of the stop loss from the entry price for long [buy] and adding the desired pip value to the entry price for short [sell] .So using the first chart , our entry price is 10070 and our take profit is 10080 since it is buy for our stop loss we will deduct our desired pip value from the entry price 10070 so if we deduct 10 pips our stop loss will be 10060 so when you are in a loss if the loss reach the stop loss which is 10060 the order will be closed. Also for the second chart, our entry price is 1.6588 and our take profit is 1.6578 since it is sell for our stop loss we will add our desired pip value from the entry price 1.6588 so if we add 10 pips our stop loss will be 1.6598 therefore when trading and you are in a loss if your loss reaches the stop loss which is 1.6598 the order will be closed.
now you can now start trading using the demonstration account  after you have mastered the above lesson .To get a demo account go to the site www.fxopen.com  you will see the picture of a phone with an indication that states practice account you will download it and install it on your system then you will complete the registration after opening it then you will go to file and select login and put in the details given to you when registering then you select demo server and you are on

 

 THIS IS JUST THE BEGINNING OF THE LESSON NEXT WEEK I WILL START WITH ANOTHER TRADING STRATEGY CALLED TRAILING STOP SO ALWAYS VISIT HERE EVERY WEEK AND I PROMISE YOU THAT YOU WILL GAIN A LOT THERE ARE STILL LOT TO COME FROM ME THANKS