The Peni2Dollarzfx Day Trading Handguide

Preface

I began my journey of learning how to day trade in October 2019. I distinctly remember taking an interest in trading before the whole AMC, GameStop, and Dogecoin craze. It was during this time I experienced some real gains and profits, along with many others in the market. I personally experienced first-hand not only the infinite freedom, possibilities, and benefits of investing, but more importantly, the necessity of needing to learn how to day trade correctly. I became obsessed with everything day trading. I easily invested more than 10,000 hours on the charts, viewing YouTube videos, testing strategies, and learning about lot sizes, brokers, indicators and so much more. 

I created this handbook with the most novice trader in mind. The content and material offered in this handbook ranges from those who have placed over a thousand trades in the market to those who have never placed a trade at all, and everyone in between. This handbook is intended as a quick reference user guide for any aspiring new trader who wishes to get started and any more-seasoned trader who is looking to gain a deeper understanding of the many concepts involved in day trading.

In my opinion, trading is truly the epitome of owning a superior, white-collar skill. If you desire to possess a skill that will always be yours, that is recession-proof, and has limitless earning potential, this handbook was made with you in mind. 

Remember that trading is the art of taking a position in the market that limits losses in the event of it occurring, while at the same time exposing your position to unlimited profits or gains. 

Trading is not for everyone. My past results are not indicative of anyone’s future performance or results. The images and illustrations I use in this user guide are examples of my past results and are by no means financial advice. Please trade responsibly. 

Disclaimer: This guide is not intended to be an all-inclusive book on everything related to day trading. However, the objective of this guide is to assist any beginning or aspiring trader, in better understanding the fundamental concepts. I found these concepts valuable in supporting me to be consistent in my trading journey. Many of the concepts in this hand guide are in bulleted lists and are oversimplified to better explain these concepts and to demonstrate how to practically apply them.

SECTION 1: Introduction to Forex

What is forex? How does one make money in forex?

Before I explain forex and what it is, remember it’s just one specific type of financial market. There are various financial markets in trading. For example, there is the foreign exchange market, cryptocurrency, and stock market, to name a few. If you travel to another country, you usually have to find a currency exchange booth at the airport. You exchange the money you have in your wallet into the currency of the country you are visiting. 

Forex is short for foreign exchange. It is the global financial market that allows someone to trade currencies. If you place a trade that one currency will be stronger versus the other currency and you are correct, you can make a profit. The opposite is true, too. If you pick the currency strength to increase but it goes down, you may lose considerably. The value of anything traded in the financial markets is never constant. It is always fluid, always fluctuating up and down and even sideways. The value of the dollar fluctuates constantly. As an experienced and disciplined trader with a proven, consistent systematic approach to the market, you can garner the skills to unlock the edge you need to gain financial freedom.

The key to trading, in my opinion, is that trading is the art of structuring your position in the market so that you minimize losses while exposing yourself to great gains or profits. To do this, I practice risking only 1% of the position in a trade. This practice always limits me to only a 1% loss.

Forex refers to the global decentralized market where currencies are bought, sold, and exchanged. It is the largest and most fluid financial market in the world. Daily trading volumes exceed trillions of dollars. Forex trading involves speculating on the relative value of different currencies with the aim of profiting from the fluctuations in exchange rates.

In the forex market, participants (including banks, financial institutions, corporations, governments, and individual traders) engage in currency trading. The primary purpose of forex trading is to facilitate international trade and investment by enabling the conversion of one currency into another.

Key Features of the Forex Market:

Global Market: The forex market operates 24 hours a day, five days a week, allowing participants from around the world to trade currencies. It is a decentralized market; there is no physical location or central exchange. Instead, trading occurs electronically over-the-counter (OTC) through a network of financial institutions, brokers, and electronic trading platforms.

Currency Pairs: Forex trading involves trading currency pairs which represent the value of one currency relative to another. The most commonly traded currency pairs include the major currencies such as the U.S. dollar (USD), euro (EUR), Japanese yen (JPY), British pound (GBP), Swiss franc (CHF), Canadian dollar (CAD), Australian dollar (AUD), and New Zealand dollar (NZD).

Exchange Rate Fluctuations: The forex market is characterized by constant exchange rate fluctuations. These fluctuations occur due to various factors such as economic indicators, geopolitical events, interest rates, political developments, and market sentiment. Traders aim to predict the direction of these exchange rate movements and take positions accordingly.

Leverage: Forex trading often involves the use of leverage, which allows traders to control larger positions with a fraction of the capital required. Leverage is provided by brokers. It enables traders to amplify their potential profits, but it can also magnify their losses. It is important to note that leverage should be used with caution and proper risk management techniques.

High Liquidity: The forex market's immense size and high trading volumes result in high liquidity; there is generally a large number of buyers and sellers available at any given time. This provides traders with the ability to enter and exit trades quickly, ensuring that they can execute their desired transactions without significant price slippage (the difference between the expected price of a trade and the price at which the trade is executed).

Trading Strategies: Forex trading involves various trading strategies, including technical analysis, fundamental analysis, and sentiment analysis. Traders use charts, indicators, economic data, news releases, and other tools to