TradingwithRayner presents

The Ult imate Forex Tradin g Course

(For Beg in n ers)
What you will learn:
➢ What is Forex trading?

➢ Who are the biggest players?

➢ Advantages of Forex trading over other markets

➢ What are the Forex market hours?

What is Forex trading?
➢ Forex stands for “Foreign Exchange”

➢ An exchange of one currency for another, e.g. going on vacation

➢ 6.6 trillion-dollar market, $6,600,000,000,000

Who are the players?
Advantages of Forex trading
➢ Low barrier to entry so you can start with as little as $100 (unlike Futures or Stocks)

➢ High liquidity so you can enter & exit your trades easily

➢ The market is open 24/5 so you can trade anytime you want (unlike stock markets
with fixed hours)
What are the Forex market hours?
What are the Forex market hours?
Recap
➢ Forex trading is an exchange of one currency for another

➢ It’s traded by banks, corporations, brokers, and retail traders

➢ Forex trading has a low barrier to entry, high liquidity, and the market is open 24/5

➢ Forex market hours: Sydney, Tokyo, London, and New York

What you will learn:
➢ What is a currency pair?

➢ What is a base and quote currency?

➢ What are the different types of currency pairs?

What is a currency pair?
➢ You trade currency in pairs, not as a standalone

➢ A measure of a currency’s value against another

➢ E.g. EUR/USD, USD/JPY

What is a base currency?
➢ 1st currency that appears in a currency pair
What is a quote currency?
➢ 2nd currency that appears in a currency pair
What is the purpose of it?
➢ Tells you how much it cost (in quote currency) to buy 1 base currency

➢ Example EUR/USD at 1.3500

Different types of currency pairs
➢ Major currency pairs

➢ Cross currency pairs

➢ Exotic currency pairs

Major currency pairs
➢ Refers to the most traded currency pairs in the world

➢ EUR/USD

➢ GBP/USD

➢ USD/CAD

➢ USD/JPY

➢ USD/CHF

➢ AUD/USD

➢ NZD/USD
Cross currency pairs
➢ Refers to currency pairs which are non-USD

➢ Euro crosses: EUR/GBP, EUR/AUD, EUR/NZD

➢ Pound crosses: GBP/JPY, GBP/AUD, GBP/NZD

➢ Yen crosses: AUD/JPY, NZD/JPY, GBP/JPY

Exotic currency pairs
➢ When one major currency is paired with a developing country’s currency

➢ USD/MXN

➢ EUR/TRY

➢ INR/GBP
Recap
➢ Currencies are traded in pairs

➢ Base currency is the 1st currency in a pair

➢ Quote currency is the 2nd currency in a pair

➢ 3 types of currency pairs: Majors, Crosses, and Exotics

What you will learn:
➢ What is a pip?

➢ What is a pipette?

➢ How to read a currency pair quote?

What is a pip?
➢ Pip stands for “percentage in point”

➢ A measure of a change in value (in a currency pair)

➢ The 4th decimal place

Example
➢ EUR/USD moves from 1.3500 to 1.3505

➢ How many pips is that?

➢ Answer: An increase of 5 pips

Example
➢ EUR/USD moves from 1.3400 to 1.3350

➢ How many pips is that?

➢ Answer: A decrease of 50 pips

JPY pairs are special
➢ Pip is the 2nd decimal place
Example
➢ USD/JPY moves from 100.10 to 100.15

➢ How many pips is that?

➢ Answer: An increase of 5 pips

Another example
➢ USD/JPY moves from 100.25 to 100.10

➢ How many pips is that?

➢ Answer: A decrease of 15 pips

What is a pipette?
➢ Also known as fractional pips (which is 1/10 of a pip)

➢ The 5th decimal place

➢ The 3rd decimal place (for JPY pairs)

Example
➢ EUR/USD moves from 1.35005 to 1.35057

➢ How many pips is that?

➢ Answer: An increase of 5.2 pips

Recap
➢ A pip is a measure of a change in value between a currency pair

➢ It’s the 4th decimal place

➢ It’s the 3rd decimal place (for JPY pairs)

➢ Pipette is 1/10 of a pip

What you will learn:
➢ What is leverage?

➢ How leverage affects your trading?

➢ What are the different types of Forex lot size?

What is leverage?
➢ The ability to trade a larger amount of money relative to your account size

➢ A double-edged sword
Example
➢ You have a $1000 account and you buy $10,000 worth of EUR/USD

➢ This means you borrow $9000

➢ A leverage of 1 to 10
What if EUR/USD goes up 10%?
➢ Recall: You have a $1000 account and you buy $10,000 worth of EUR/USD

➢ Your $10,000 is now worth $11,000

➢ You return the $9000 you owe

➢ You are left with $2000

➢ Original capital is $1000

➢ Profit is $1000
What if EUR/USD goes down 10%?
➢ Recall: You have a $1000 account and you buy $10,000 worth of EUR/USD

➢ Your $10,000 is now worth $9,000

➢ You return the $9000 you owe

➢ You are left with $0

➢ Original capital is $1000

➢ Loss is $1000

➢ Leverage can amplify your gains and losses

What is a Forex lot size?
➢ Standard lot: 100,000 units

➢ Mini lot: 10,000 units

➢ Micro lot: 1,000 units

➢ Nano lot: 100 units

➢ You can trade fractional lot sizes (e.g. 1.3 standard lot, 2.5 mini lots, etc.)
Recap
➢ Leverage is the ability to trade a larger amount of money relative to your account
size

➢ It’s is a double-edged sword

➢ Forex lot size: Standard, Mini, Micro, and Nano lots

What you will learn:
➢ What is a pip value?

➢ How to calculate a pip value?

What is a pip value?
➢ How much 1 pip is worth?

➢ Depends on 2 things:

1. Lot size

2. Quote currency
#1: Lot size
➢ 1 standard lot (100,000 units) = $10/pip

➢ 1 mini lot (10,000 units) = $1/pip

➢ 1 micro lot (1,000 units) = $0.1/pip

➢ Only if your quote currency is USD (like EUR/USD, GBP/USD, AUD/USD, etc.)
#2: Quote currency
➢ If the quote currency is EUR, then…

➢ 1 standard lot (100,000 units) = €10/pip

➢ 1 mini lot (10,000 units) = €1/pip

➢ 1 micro lot (1,000 units) = €0.1/pip

Example
➢ You trade EUR/USD and buy 2.3 standard lots

➢ How much is the value per pip?

➢ Answer: $23/pip
Another example
➢ You trade GBP/AUD and buy 5.5 mini lots

➢ How much is the value per pip?

➢ Answer: 5.5AUD/pip
Pip value in your account’s currency
1. Lot size

2. Quote currency

3. The exchange rate between quote currency and your account’s currency
Example
➢ You buy 1 standard lot of EUR/USD

➢ Your account’s currency is SGD

➢ The exchange rate for USD/SGD is 1.3000

➢ How much is the value per pip?

➢ Answer: 10 USD /pip x 1.3000 = $13 SGD /pip

Another example
➢ You buy 2 standard lots of GBP/NZD

➢ Your account’s currency is CAD

➢ The exchange rate for NZD/CAD is 1.5000

➢ How much is the value per pip?

➢ Answer: 20 NZD /pip x 1.5000 = 30 CAD /pip

Recap
➢ Pip value depends on:

1. Lot size

2. Quote currency

3. The exchange rate between quote currency and account’s currency (if they are
different)
What you will learn:
➢ What is long?

➢ What is short?

➢ How to calculate your profit and loss?

What is long?
➢ You are bullish and expect the price the move higher

➢ You expect the base currency to appreciate against the quote currency
Example
➢ You long EUR/USD at 1.5500

➢ You bought €100,000 and sold $155,000

What is short?
➢ You are bearish and expect the price to move lower

➢ You expect the base currency to depreciate against the quote currency
Example
➢ You short EUR/USD at 1.4500

➢ You sold €100,000 and bought $145,000

Example
➢ You short EUR/USD at 1.4500

➢ You sold €100,000 and bought $145,000

How to calculate your profit and loss?
➢ 2 things:

1. Pips gain/loss

2. Value per pip

➢ Formula: Pips gain/loss x value per pip

Example
➢ You long 1 standard lot of EUR/USD at 1.5000 and exited at 1.5005

➢ What’s the outcome?

➢ Pips gain/loss x value per pip

➢ Answer: 5 x $10 USD = $50 USD

Another example
➢ You short 5 mini lots of GBP/USD at 1.7000 and exited at 1.7050

➢ What’s the outcome?

➢ Pips gain/loss x value per pip

➢ Answer: -50 x $5 USD = -$250 USD

Final example
➢ You long 1 standard lot of AUD/USD at 1.1000 and exited at 1.1200

➢ What’s the outcome?

➢ Answer: 200 x $10 = $2000 USD

➢ If your account is in SGD and USD/SGD exchange rate is 1.5000. How much profit in
SGD did you earn?

➢ Profit in USD x exchange rate

➢ Answer: $2000 x 1.5000 = $3000 SGD

Recap
➢ Long means you are bullish and will profit if the price moves higher

➢ Short means you are bearish and will profit if the price moves lower

➢ Profit & Loss = pips gain/loss x value per pip

➢ To know what is the P&L in your account’s currency, take the P&L and multiply it by
the exchange rate
What you will learn:
➢ What is risk management and why it matters?

➢ What is position sizing?

➢ How to calculate your position size?

What is risk management?
➢ The ability to encounter a series of losses without blowing up your trading account

➢ You can have a winning trading strategy but without proper risk management—you
will still lose
Example
➢ John and Sally both have a $1000 trading account

➢ Their trading strategy has a 50% winning rate and a 1 to 2 risk-reward ratio

➢ John risks $250 per trade and Sally risks $20 per trade

➢ Outcome of trades: L L L L W W W W

➢ John: -250, -250, -250, -250 = Blow up

➢ Sally: -20, -20, -20, -20, +40, +40, +40, +40 = $80
What is position sizing?
➢ Trading the right number of units such that a loss is only a fraction of your account

➢ Risk 1% of your capital on each trade

➢ E.g. If your account is $10,000, then you’ll not lose more than $100 on a trade
How to calculate your position size?
➢ Position size = Amount to risk / (stop loss x value per pip)

➢ Position sizing calculator

Recap
➢ Position sizing is the tool to manage your risk

➢ Use a position sizing calculator to help you with it

What you will learn:
➢ What are the different types of Forex orders?
Different types of Forex orders
➢ Market order

➢ Limit order

➢ Stop order

➢ Stop loss order

Market order
➢ Buy market order

➢ An order to buy at the current market price no matter what

➢ Pros: Guaranteed to enter a trade

➢ Cons: Might get slippage during “fast-moving” markets

Limit order
➢ Buy limit order

➢ An order to buy below the current market price

➢ Pros: Buy at the price you want

➢ Cons: Might not get filled on the trade

➢ (Vice versa for sell limit order)

Stop order
➢ Buy stop order

➢ An order to buy if the price moves above a specific level

➢ Pros: Useful for breakout trading

➢ Cons: Might be a false breakout

➢ (Vice versa for sell stop order)

Stop loss order
➢ For a long entry

➢ An order to sell your position if the price exceeds a specific level

➢ Pros: Protect your downside

➢ Cons: Might get stopped out prematurely

Recap
➢ Market order gets you into a trade immediately

➢ Limit order gets you into a trade if the market comes to your specific price level

➢ Stop order get you into a trade if the market exceeds a specific price level

➢ Stop loss order gets you out of a trade if the market exceeds a specific price level
What you will learn:
➢ The 2 prices in the markets

➢ What is the spread and why it matters?

➢ How to reduce the spread?

The 2 prices in the market
➢ Bid: The price you can sell at

➢ Ask: The price you can buy at

What is the spread?
➢ Difference between the bid and ask

➢ E.g. EUR/USD is trading at 1.3500/1.3501

Why spread matters?
➢ Spread = Transaction cost

➢ The higher the spread, the higher your transaction cost

➢ The lower the spread, the lower your transaction cost

Example
➢ You buy 1 standard lot of EUR/USD with a 3 pips spread

➢ How much does the spread cost you?

➢ What if the spread is 1 pip?

How to reduce the cost of the spread
➢ Focus on major currency pairs

➢ Trade the higher timeframe so the cost of your spread is lower (in % terms)
Example
➢ 1 pip spread with a 5 pips stop loss

➢ 1 pip spread with a 100 pips stop loss

Recap
➢ The spread is the difference between the bid and ask

➢ The lower the spread, the lower your transaction cost

➢ If you want to reduce the cost of the spread, focus on major currency pairs and trade
the higher timeframes
What you will learn:
➢ What are the different types of Forex traders?
Different types of Forex traders
➢ Short-term

➢ Medium-term

➢ Long-term
Short-term trader
➢ Timeframe: Below 1-hour timeframe

➢ Potential target: 5 to 50 pips

➢ Holding time: Less than 3 days

Medium-term trader
➢ Timeframe: Between 1 and 4-hour timeframe

➢ Potential target: 50 to 200 pips

➢ Holding time: 3 to 10 days

Long-term trader
➢ Timeframe: 4-hour and above

➢ Potential target: More than 200 pips

➢ Holding time: More than 10 days

Recap
➢ Short-term trader

➢ Medium-term trader

➢ Long-term trader
What you will learn:
➢ What is technical analysis?

➢ What is market structure?

➢ What is an area of value?

➢ What is an entry trigger?

➢ How to use technical analysis in your trading?

What is technical analysis?
➢ Technical analysis is using past data (like chart patterns, volume, indicators, etc.) to
make a trading decision
#1: Market structure
➢ What to do

➢ Market structure helps you to define the current market condition so you know
whether to be buying, selling, or staying out of the markets
Types of market structure
➢ Uptrend: Look for buying opportunities

➢ Downtrend: Look for selling opportunities

➢ Range: Can both buy and sell

#2: Area of value
➢ Where to buy (or sell)

➢ Area of value helps you to pinpoint the area on your chart to look for trading
opportunities

➢ Support and Resistance

➢ Moving average
Support and Resistance (SR)
➢ Support: An area on your chart where buying pressure could step in

➢ Resistance: An area on your chart where selling pressure could step in

➢ When support is broken, it could become resistance (and vice versa)

Moving average
➢ In trending markets, moving average can act as an area of value

➢ At least two tests to “confirm” it

#3: Entry trigger
➢ When to buy (or sell)

➢ Candlestick patterns
Candlestick patterns explained
➢ A method of reading a price chart

➢ 4 data points: open, high, low, and close

➢ Can be used across different timeframes

➢ 1-hour timeframe = 1 candle formed every 1 hour

➢ 4-hour timeframe = 1 candle formed every 4 hours

➢ Daily timeframe = 1 candle formed every day

How to read candlestick patterns
How to read candlestick patterns
Bullish reversal candlestick patterns

Hammer Bullish engulfing

Bearish reversal candlestick patterns

Shooting Star Bearish engulfing

Recap
➢ Market structure tells you what to do

➢ Area of value tells you where to enter

➢ Entry trigger tells you when to enter

Examples
Examples
Examples
Examples
THANK YOU