The Newbies Trading

manual 1

Outline;
What is forex trading
The majors/ minors currencies
Currency/Trading Abbreviation
Base & quote currency
The concept of bid /ask price/spread
Brokers and their functions
Forex trading sessions
Pips
Unveiling lotsize
Liquidity
Market volatility
Technical Analysis
Fundamental Analysis

What is forex trading;

Forex trading, also known as foreign exchange trading or
currency trading, involves buying and selling currencies on the
foreign exchange market to make a profit. This market is the
world's largest and most liquid financial market, where
currencies are traded 24 hours a day, five days a week.

Key points about forex trading:

1. Currency Pairs: Forex trading involves trading currency
pairs, such as EUR/USD (Euro/US Dollar), where one currency is
exchanged for another

2. Market Participants: Participants include banks,

financial institutions, corporations, governments, and individual
traders. The market operates globally and is decentralized, with
no central exchange.

3. Speculation and Hedging: Forex trading can be used

for speculation (profiting from currency price movements) or
hedging (protecting against currency fluctuations).

4. Leverage: Forex trading often involves leverage, allowing

traders to control larger positions with less capital. While it can
amplify profits, it also increases the risk of losses.

5. Factors Influencing Exchange Rates: Exchange

rates are influenced by economic indicators, geopolitical events,
central bank policies, and market sentiment.

6. Trading Strategies: Different trading strategies include

day trading, swing trading, and position trading. Traders use
technical analysis, fundamental analysis, or a combination of
both to make trading decisions.

7. Risk Management: Due to the high volatility of the

forex market, risk management is crucial. This includes setting
stop-loss orders, using proper position sizing, and diversifying
trades.

It's important to note that forex trading carries significant risks,

and it's possible to lose more than your initial investment.
Successful trading requires knowledge, experience, and careful
risk management. Many traders start by practicing with a demo
account to gain experience before trading with real money.

Majors/Minors Currencies;

In the world of forex trading, currency pairs are classified into three
categories based on their trading volume and liquidity: majors, minors
(also known as crosses), and exotics.
1. Major Currency Pairs
- These pairs are the most heavily traded and boast the highest liquidity
in the forex market.
- They consist of the most extensively traded currencies paired with the
US Dollar (USD).
- The major currency pairs include:
- EUR/USD (Euro/US Dollar)
- USD/JPY (US Dollar/Japanese Yen)
- GBP/USD (British Pound/US Dollar)
- USD/CHF (US Dollar/Swiss Franc)
- AUD/USD (Australian Dollar/US Dollar)
- USD/CAD (US Dollar/Canadian Dollar)
- NZD/USD (New Zealand Dollar/US Dollar)

2. Minor Currency Pairs (Crosses)

- These pairs do not involve the US Dollar but consist of other major
currencies paired with each other.
- They generally have lower trading volumes and liquidity compared to
the major pairs.
- Examples of minor currency pairs include:
- EUR/GBP (Euro/British Pound)
- EUR/JPY (Euro/Japanese Yen)
- GBP/JPY (British Pound/Japanese Yen)
- AUD/JPY (Australian Dollar/Japanese Yen)
- NZD/JPY (New Zealand Dollar/Japanese Yen)
- EUR/AUD (Euro/Australian Dollar)
- GBP/CHF (British Pound/Swiss Franc)

3. Exotic Currency Pairs

- Exotic pairs consist of one major currency and one from a developing or
smaller economy (e.g., an emerging market).
- They are less liquid and have wider spreads compared to majors and
minors.
- Examples of exotic currency pairs include:
- USD/TRY (US Dollar/Turkish Lira)
- USD/ZAR (US Dollar/South African Rand)
 - USD/SGD (US Dollar/Singapore Dollar)
- EUR/TRY (Euro/Turkish Lira)
- GBP/MXN (British Pound/Mexican Peso)

Each category of currency pairs presents different opportunities and risks

for traders. Major pairs are often favored by both beginners and
experienced traders due to their high liquidity and generally lower spreads.
On the other hand, minors and exotics can offer opportunities for more
experienced traders seeking volatility and potentially higher returns.

Currency/Trading Abbreviation;

In forex trading, people use abbreviations and acronyms to refer to

currencies, economic indicators, trading terms, and more. Here are
some key abbreviations you might encounter:

Currencies:
- US Dollar (USD)
- Euro (EUR)
- Japanese Yen (JPY)
- British Pound (GBP)
- Swiss Franc (CHF)
- Canadian Dollar (CAD)
- Australian Dollar (AUD)
- New Zealand Dollar (NZD)

Currency Pairs:
- Euro/US Dollar (EUR/USD)
- US Dollar/Japanese Yen (USD/JPY)
- British Pound/US Dollar (GBP/USD)
- US Dollar/Swiss Franc (USD/CHF)
- Australian Dollar/US Dollar (AUD/USD)
- US Dollar/Canadian Dollar (USD/CAD)
- New Zealand Dollar/US Dollar (NZD/USD)

Economic Indicators:
- Gross Domestic Product (GDP)
- Consumer Price Index (CPI)
- Producer Price Index (PPI)
- Non-Farm Payrolls (NFP)
- Purchasing Managers' Index (PMI)

Trading Terms:
- Percentage in Point (PIP) - smallest price move in forex trading
- Leverage - ratio of borrowed funds to the margin deposit
- Stop Loss (SL) - an order placed to limit potential losses
- Take Profit (TP) - an order placed to lock in profits
- Exponential Moving Average (EMA)
- Relative Strength Index (RSI)

Miscellaneous:
- Foreign Exchange (FX) - often used interchangeably with forex
- Electronic Communication Network (ECN) - type of forex brokerage
- Introducing Broker (IB) - a broker who introduces clients to another
brokerage
- High-Frequency Trading (HFT) - trading strategy involving rapid
execution of trades

Understanding these terms can help you navigate the forex market
more effectively.

Base and Quote Currency;

the dynamic world of foreign exchange (forex) trading, currency pairs

play a key role. These pairs consist of a base currency and a quote
currency. Here's what you need to understand about these vital
components:

Base Currency:
The base currency is the first currency listed in a forex pair. For
instance, in the EUR/USD pair, the euro (EUR) serves as the base
currency. Its primary function is to signify the amount of the quote
currency required to purchase one unit of the base currency. For
instance, with an exchange rate of 1.10 for the EUR/USD pair, it
indicates that 1 euro is equivalent to 1.10 US dollars.
Quote Currency:
The quote currency, also known as the counter currency, is the
second currency listed in a forex pair. For example, in the EUR/USD
pair, the US dollar (USD) is the quote currency. Its essential role is to
demonstrate the value of one unit of the base currency in terms of the
quote currency. Using the previous example, 1 euro is priced at 1.10
US dollars.

The Concept of bid&Ask

price/spread

In the trading realm, particularly in forex (foreign exchange),

understanding bid and ask prices is crucial for executing trades
effectively and managing transaction costs. The bid price represents
the highest price that a buyer is willing to pay for a currency or
financial instrument at a given time, while the ask price, also known
as the offer price, is the lowest price at which a seller is willing to sell
a currency or financial instrument.

The spread, denoting the difference between the bid price and the ask
price, functions as the transaction cost for the trader and serves as
the broker’s profit margin on the trade. For instance, if the bid price
for EUR/USD is 1.1000 and the ask price is 1.1002, the spread is
0.0002 (or 2 pips).
Key considerations encompass:

1. Transaction Cost: The spread represents a cost to

traders as they must buy at the higher ask price and sell at the lower
bid price.
Therefore, a narrower spread is generally more favorable for traders.

2. Market Liquidity: High liquidity markets, such as major forex

pairs, typically entail narrower spreads, whereas less liquid markets,
like exotic forex pairs, are associated with wider spreads.

3. Bid-Ask Quote: A typical bid-ask quote might appear as

follows: EUR/USD 1.1000/1.1002. This quote illustrates that the bid
price is 1.1000, and the ask price is 1.1002.

Let’s consider a practical example: if a trader seeks to buy EUR/USD

and the current bid price is 1.1000 with an ask price of 1.1002, the
trader will need to buy euros at the ask price of 1.1002 and later sell at
the bid price of 1.1000.

Comprehending bid and ask prices is fundamental for successful

trading in the forex market.

Brokers and their function

Brokers are pivotal figures in financial markets such as forex, stocks,
and commodities. They serve as intermediaries between buyers and
sellers, executing transactions and offering a range of services to
traders and investors. Here’s an in-depth exploration of brokers and
their functions:

Defining a Broker

A broker is an individual or firm that acts as a link between buyers

and sellers, carrying out buy and sell orders for a commission or fee.
Brokers can operate across different markets, including forex, stocks,
commodities, and options.

Variety of Brokers

1. Full-Service Brokers
Services Offer a wide array of services, including investment advice,
portfolio management, research, and retirement planning.
Fees Charge higher fees and commissions due to the
comprehensive services provided.
Example: Merrill Lynch, Morgan Stanley.

2. Discount Brokers
 Provide fewer services than full-service brokers, primarily focusing
on executing trades. They may offer some research tools and
educational resources.
Charge lower fees and commissions.

3. Online Brokers
Primarily operate online, providing platforms for self-directed
traders to execute trades. They offer various tools and resources for
research and analysis.
Typically charge low fees and commissions.

4. Forex Brokers
Specialize in facilitating forex trades, providing platforms for trading
currency pairs.
charge spreads, commissions, or both.
Example HFM,OCTAfX.PEPPERSTONE

Functions of Brokers

1. Executing Trades
Brokers execute buying and selling of securities on behalf of their
clients, utilizing various exchanges and trading platforms to facilitate
these transactions.

2. Providing Market Access

Brokers offer access to different markets, including stocks, forex,
commodities, and derivatives, providing trading platforms for clients
to place orders.

3. Advisory Services
 Full-service brokers offer personalized investment advice, assisting
clients in making informed decisions based on their financial goals
and risk tolerance.

4. Research and Analysis

Brokers provide research reports, market analysis, and financial
news to keep clients informed about market trends and potential
investment opportunities.

5. Portfolio Management
Some brokers offer portfolio management services, making
decisions to achieve clients' financial objectives.

6. Leverage and Margin Trading

Certain brokers offer leverage, enabling clients to trade with
borrowed funds, amplifying gains but also increasing the risk of
losses.

7. Educational Resources
Many brokers provide educational materials such as articles,
webinars, tutorials, and courses to enhance clients' trading
knowledge and skills.

8. Customer Support
Brokers offer customer support to assist clients with
account-related queries, technical issues, and trading assistance.

9. Risk Management Tools

Brokers provide various tools for risk management, including
stop-loss orders, limit orders, and trailing stops, to help traders
manage their exposure to market risk.
10. Regulatory Compliance
Brokers ensure compliance with regulatory requirements,
safeguarding client funds and providing transparency in their
operations.

Choosing a Broker;
When selecting a broker, consider the following factors:

1. Regulation;Verify that the broker is regulated by a reputable

authority (e.g., SEC, FINRA, FCA).
2. Fees and Commissions; Compare the trading costs, including
spreads, commissions, and any other fees.
3. Trading Platform; Assess the broker’s trading platform for
usability, features, and reliability.
4. Range of Markets;Check the availability of markets and
instruments you wish to trade.
5. Customer Service; Look for broker with responsive and
supportive customer support
6. Research and Tools; Evaluate the quality and availability of
research tools, analysis, and educational resources.

Understanding the functionality and significance of brokers is crucial

for making informed decisions about trading and investing in various
financial markets.

Forex trading sessions

The foreign exchange market operates 24 hours a day for five days
each week, facilitated by overlapping trading sessions across various
global financial centers. The primary trading sessions are as follows:

Sydney Session:
- Hours: 10 PM - 7 AM GMT
- Description: The Sydney session commences the trading day,
albeit relatively subdued in comparison to other sessions. Market
activity escalates with the opening of Asian markets.

Tokyo Session
- Hours: 12 AM - 9 AM GMT
- Description: Often referred to as the Asian session, the Tokyo
session overlaps with the Sydney session for a few hours and is
notable for its trading in currencies such as the Japanese yen.

London Session:
- Hours: 8 AM - 5 PM GMT
- Description: The London session represents one of the most
active trading periods due to its overlap with both the Asian and New
York sessions, witnessing a substantial volume of forex trading
during this time.
New York Session:
- Hours: 1 PM - 10 PM GMT
- Description: Overlapping with the London session, the New York
session experiences heightened liquidity and volatility until the
closure of the trading day.

Key Points:
- Overlapping Sessions: The most active times in the forex market
occur during overlapping trading sessions. For instance, the
London-New York overlap (1 PM - 5 PM GMT) is particularly dynamic
and liquid.
- Market Volatility: Different sessions exhibit varying levels of
volatility, with the London session tending to be the most volatile,
followed by the New York session.
- Currency Pairs: Particular currency pairs exhibit heightened activity
during specific sessions. For instance, USD/JPY is more active during
the Tokyo session, while EUR/USD experiences increased activity
during the London and New York sessions.

Comprehending these trading sessions enables traders to identify

optimal trading times and effectively manage their strategies.

What is pips
In the world of forex trading, a "pip" is an essential concept that
stands for "percentage in point" or "price interest point." It is a
standard unit that signifies the movement in the price of a currency
pair. Traders use pips to measure price changes and to convey the
amount of profit or loss in a trade to others. Let's dive into a
comprehensive explanation of pips:

Understanding Pips

Definition
- A pip is typically the smallest price move that a given exchange
rate can make based on market convention.
- For most currency pairs, a pip is equal to 0.0001 (one
ten-thousandth) of the quote currency. For instance, if the EUR/USD
pair moves from 1.1050 to 1.1051, that 0.0001 USD change is one pip.

Exception
- For currency pairs involving the Japanese yen (JPY), a pip is equal
to 0.01 (one hundredth) of the quote currency. For example, if the
USD/JPY pair moves from 110.50 to 110.51, that 0.01 JPY change is
one pip.

Importance of pips in Forex Trading

Measuring Price Movements

- Pips offer a standardized way to quantify price changes, enabling
easy communication and comparison of movements across different
currency pairs.

Calculating Profit and Loss

- Pips play a pivotal role in determining the profit or loss in a trade.
Traders use pips to assess their potential gains or losses accurately.

Position Sizing
 - Understanding pips helps traders in making informed decisions
about position sizes and risk management. For instance, traders can
decide on the number of lots to trade based on the pip value and their
risk tolerance.

Examples

1. Major Currency Pairs (non-JPY)

- If the EUR/USD moves from 1.1200 to 1.1250, it has moved 50 pips.
- Similarly, if the GBP/USD moves from 1.3000 to 1.3050, it has also
moved 50 pips.

2. JPY Pairs
- If the USD/JPY moves from 110.00 to 110.50, it has moved 50 pips.
- Likewise, if the EUR/JPY moves from 120.00 to 120.50, it has also
moved 50 pips.

Unveiling of lot size

In the world of forex trading, the term "lot size" carries significant
weight as it pertains to the standardized quantity of a financial
instrument being traded. This measurement directly impacts the
value of each pip movement and consequently influences the
potential profit or loss of a trade. Here's a breakdown of the
various lot sizes commonly employed in forex trading:

Types of Lot Sizes

1. standard Lot

Quantity 100,000 units of the base currency.

-Description Widely favored by institutional traders and

experienced retail traders. A standard lot typically sees a $10
movement for each pip.

2. Mini Lot

- Quantity 10,000 units of the base currency.

- Description: Ideal for beginner traders or those with smaller

accounts. In a mini lot, each pip movement usually equals $1.

3. Micro Lot

Quantity 1,000 units of the base currency.

 - Description Suitable for traders who are new to the market or
seek to test new strategies with minimized risk. In a micro lot,
each pip movement typically equals $0.10.

4. Nano Lot

-Quantity 100 units of the base currency.

- Description: The nano lot stands as the smallest lot size, often
offered by certain brokers for very precise risk management. In a
nano lot, each pip movement usually equals $0.01.

Importance of Lot Sizes

Risk Management

- Lot size directly affects the potential risk and reward of a

trade. Smaller lot sizes allow traders to confine their exposure
and manage risk more efficiently.

2. Account Size:
 - Traders should select lot sizes corresponding to the size of
their trading account. Larger accounts can accommodate
standard lots, while smaller accounts may find it beneficial to
trade mini, micro, or nano lots.

3. Trading Strategy:

- Different trading strategies may call for different lot sizes.

Scalpers may utilize smaller lots for frequent trades, whereas
position traders might opt for larger lots for fewer, longer-term
trades.

4. Market Conditions:

- Volatile market conditions may necessitate smaller lot sizes to

manage risk, whereas stable conditions can permit larger lot
sizes.

Example Calculations
1. Standard Lot:

- If you buy 1 standard lot of EUR/USD at 1.1200 and the price

moves to 1.1250, that's a 50 pip movement.

- Profit/Loss = 50 pips $10/pip = $500.

2. Mini Lot:

- If you buy 1 mini lot of EUR/USD at 1.1200 and the price

moves to 1.1250, that's a 50 pip movement.

- Profit/Loss = 50 pips * $1/pip = $50.

3. Micro Lot:

- If you buy 1 micro lot of EUR/USD at 1.1200 and the price

moves to 1.1250, that's a 50 pip movement.

- Profit/Loss = 50 pips * $0.10/pip = $5. Types of Lot Size

Here’s another example using a currency pair with the Japanese

Yen as the counter currency.
Notice that this currency pair only goes to two decimal places to
measure a 1 pip change in value (most of the other currencies
have four decimal places). In this case, a one pip move would be
.01 JPY.

(The value change in counter currency) times the exchange rate

ratio = pip value (in terms of the base currency)

[.01 JPY] x [1 GBP/123.00 JPY]

Or simply as:

[(.01 JPY) / (123.00 JPY)] x 1 GBP = 0.0000813 GBP

So, when trading 10,000 units of GBP/JPY, each pip change in

value is worth approximately 0.813 GB

Understanding liquidity
Liquidity in the forex market denotes the ease with which a currency pair
can be bought or sold without causing a substantial impact on its
exchange rate. High liquidity signifies the presence of numerous buyers
and sellers, resulting in narrower bid-ask spreads and the ability to
promptly execute large orders.

Key Elements of Liquidity in Forex:

1. Market Participants:

- The forex market encompasses a diverse array of participants, including

central banks, financial institutions, hedge funds, corporations, and
individual traders, all contributing to its high level of liquidity

2. Trading Volume:
 - With a daily trading volume surpassing $6 trillion, the forex market
consistently facilitates significant currency trading, bolstering liquidity.

3. Bid-Ask Spread:

- In highly liquid markets, the bid-ask spread tends to be minimal,

rendering it cost-effective for traders to enter and exit positions.

4. Volatility:

- High liquidity generally leads to reduced volatility and allows for the
accommodation of large trades without substantial price changes.
However, liquidity can wane during major events, consequently causing
heightened volatility.Factors Impacting Liquidity:

1. Time of Day:

- Liquidity levels fluctuate throughout the day, peaking during major

trading session overlaps, such as the London-New York session.

2. Economic Events:

- Major economic releases, central bank announcements, and geopolitical

events can influence liquidity, oftentimes resulting in temporary spikes.

3. Currency Pairs:
 - Major currency pairs generally exhibit higher liquidity compared to
exotic currency pairs due to their widespread usage and trading volume.

Advantages of High Liquidity:

1. Seamless Trade Execution:

- High liquidity ensures swift and precise order execution, mitigating the
risk of slippage.

2. Reduced Transaction Costs:

- Narrow bid-ask spreads in liquid markets minimize trading costs,

thereby enhancing cost efficiency for entering and exiting positions.

3. Price Stability:

- Liquid markets tend to exhibit greater stability, as significant orders can

be absorbed without causing substantial price fluctuations.

Challenges of Low Liquidity:

1. Heightened Volatility:

- Low liquidity can lead to increased volatility, with even minor orders
triggering significant price movements.

2. Expanded Spreads:
 - Less liquid markets tend to feature wider bid-ask spreads, elevating the
cost of trading.3. Execution Risk:

- In conditions of low liquidity, the likelihood of slippage increases,

characterized by trades being executed at prices differing from
expectations.

A comprehensive understanding of liquidity is imperative for forex traders,

given its implications for trade execution, transaction costs, and overall
market stability.

Market volatility

Market volatility is all about how quickly prices of financial

instruments change in a specific time. In forex trading, it's a big deal
because it measures how often and by how much the prices of
currency pairs move.

Key Aspects of Market Volatility

1. Measurement

- Historical Volatility: This measures how prices changed in the past

and is calculated using things like standard deviation.

- **Implied Volatility**: This is based on the prices of options and

reflects what the market thinks about future volatility.

2. High Volatility

- This means big price changes happening a lot.

- It can give you more chances to trade because prices swing a lot.

- But it's riskier since prices can change quickly and in surprising
ways.

3. Low Volatility

- This means prices changing by smaller amounts and not as often.

- It might not offer as many chances to trade, but it's safer.

 - Prices are more predictable and not changing as fast.

Causes of Market Volatility

1. Economic Data Releases

- Things like GDP reports, employment numbers, inflation rates, and

spending by consumers can make prices move a lot in the forex
market.

2. Political Events

- Elections, changes in policy, tensions between countries, and

other political stuff can make prices more up and down. This happens
because people get unsure about what's going to happen to the
economy.

3. Market Sentiment

- When traders feel different about things because of news, events,

or rumors, it can quickly change prices in the market.
4. Central Bank Actions

- Stuff like changes in interest rates, policies about money, and what
central bank big shots say can really shake up prices in the market.

5.Market Liquidity:

- When hardly anyone's trading (like on holidays or at night), even

small trades can make prices move a lot, which leads to more
volatility.

Impact of Volatility on Trading

1. Risk and Reward

- Big price swings mean you can make more money, but you can
also lose a lot more. Traders need to be careful and not take too much
risk.

2. Trading Strategies
 - Different ways of trading work better in different amounts of
volatility. For example, quick trading can be good when things change
a lot, while following trends can work better when things are more
stable

3. Stop-Loss and Take-Profit Orders

- When things are really up and down, traders might set wider stops
and take-profits to not get out of trades too early.

4. Margin Requirements

- To be safer in high volatility, brokers might ask for more money to

protect against bigger risks.

How to manage Volatility

1. Risk Management

- Use tools like stop-loss orders and spreading out your trades to
handle the risks of volatility.

2. Stay Informed

- Keep an eye on things like economic calendars, news, and the

market to know when prices might go wild and plan trade carefully.
3. Volatility Indicators:

- Use tools like the Average True Range, Bollinger Bands, and the
Volatility Index to figure out how crazy the market is and make smart
choices.

Understanding market volatility is super important for forex traders

because it affects trading chances, keeping safe from risk, and what
trading plans you use. By knowing what makes prices swing and how
it affects the market, traders can do better in the forex world and make
more money.

Technical Analysis
Hey there! Let's talk about technical analysis, a method used to
predict future price movements of financial instruments like stocks,
commodities, and currencies. It's all about using historical price data,
volume, and other market stats to make smart trading decisions.

Key Components of Technical Analysis

1. Charts

Charts are the go-to tools for technical analysis, helping us spot
trends and patterns in historical price data.

You've got line charts, bar charts, and candlestick charts to work
with.
2. Trends

Trends show the overall direction of the market – whether it's going
up (bullish), down (bearish), or staying flat (ranging).

It's super important to know the trend direction when making

trading choices.

3. Support and Resistance;

Support is a price level where a downtrend is likely to take a

breather due to a bunch of buying interest.

Resistance is a price level where an uptrend is expected to pause

because of a lot of selling interest.

We use these levels to figure out when to jump in and when to get
out of trades.

4. Indicators and Oscillators

Indicators are math-based calculations using price, volume, or open

interest. They help us spot trends, reversals, and market conditions.

We've got things like Moving Averages, Relative Strength Index (RSI),
Moving Average Convergence Divergence (MACD), and Bollinger
Bands.
 Then there are oscillators like RSI and Stochastic Oscillator, which
tell us when things are overbought or oversold.

5. Chart Patterns

Chart patterns are shapes formed by an asset's price movements.

They help us predict future price movements based on historical
patterns.

Watch out for patterns like Head and Shoulders, Double Top and
Double Bottom, Triangles, and Flags.

Principles of Technical Analysis

1. Market Action Discounts Everything

This means that everything, including fundamental data, is already

reflected in an asset's price. So, analyzing price movements is
enough for trading decisions.

2. Prices Move in Trends:

- Prices tend to follow trends instead of random ups and downs.

Identifying these trends is crucial for successful trading.

3. History Repeats Itself:

 Historical price movements often repeat over time, so patterns and
trends we've seen before are likely to come back.

Popular Technical Analysis Tools

1. Moving Averages:

It Includes Simple Moving Average (SMA) and Exponential Moving

Average (EMA).

2. Trendlines:

Trendlines are drawn on a chart to show the trend's direction,

connecting a line of high points or low points

3. Volume Analysis;

Analyzing trading volume confirms trends and helps us spot

potential reversals. High volume during an uptrend means lots of
buying interest.

4. Fibonacci Retracement;

This tool helps us find potential support and resistance levels based
on key Fibonacci levels (like 38.2%, 50%, 61.8%).
Advantages and Limitations

Advantages;

Gives us a systematic way to make trading decisions. Works across

various timeframes, making it great for day trading, swing trading,
and long-term investing.

Helps us find entry and exit points more accurately

Limitations:

Past performance doesn't always predict future results.

Sometimes it gives false signals, which can lead to losses.

Needs constant monitoring and strategy adjustments.

Technical analysis is a cool tool for traders and investors who want to
understand market behavior and make smart trading decisions. By
analyzing historical price data and using different indicators and
patterns, we can spot trends, predict price movements, and fine-tune
our trading strategies.
 Fundamental Analysis

Fundamental analysis is a way of looking at the forex market by

analyzing economic, social, and political forces that may affect
currency prices.

If you think about it, this makes a whole lot of sense! Just like in
your Economics 101 class, it is supply and demand that
determines price, or in our case, the currency exchange rate.

Using supply and demand as an indicator of where price could

be headed is easy. The hard part is analyzing all of the factors
that affect supply and demand.
In other words, you have to look at different factors to determine
whose economy is rockin’ like a BLACKPINK song, and whose
economy sucks.

You have to understand the reasons why and how certain events
like an increase in the unemployment rate affect a country’s
economy and monetary policy which ultimately, affects the level
of demand for its currency.

The idea behind this type of analysis is that if a country’s current

or future economic outlook is good, its currency should
strengthen.

The better shape a country’s economy is, the more foreign

businesses and investors will invest in that country. This results
in the need to purchase that country’s currency to obtain those
assets.

In a nutshell, this is what fundamental analysis is:

For example, let’s say that the U.S. dollar has been gaining
strength because the U.S. economy is improving.

As the economy gets better, raising interest rates may be needed

to control growth and inflation.

Higher interest rates make dollar-denominated financial assets

more attractive.
In order to get their hands on these lovely assets, traders and
investors have to buy some U.S. dollars first. This increases
demand for the currency.

As a result, the value of the U.S. dollar will likely increase against
other currencies with lesser demand. Since currencies are
always paired, their performance is determined relative to that of
another currency.

Later on in the course, you will learn which economic data points
tend to drive currency prices, and why they do so.You will know
who the Fed Chairman is and how retail sales data reflects the
economy. You’ll be spitting out global interest rates like song
lyrics.

To be able to use fundamental analysis, it is essential to

understand how economic, financial, and political news will
impact currency exchange rates.

This requires a good understanding of macroeconomics and

geopolitics.

No need to be intimidated by such fancy-sounding words though.

For now, just know that fundamental analysis is a way of
analyzing the potential moves of a currency through the strength
or weakness of that country’s economic outlook. It’s going to be
awesome, we promise!
Congratulations 🎉 to you if you read from A to Z with
this Article,I can tell you for free that you are no longer a newbie
in forex trading…..

See you soon at our trading class where i will teach you;

How to set up a live trading account

How to know when to buy or sell

How to enter a trade and exit the trade

How to read candlesticks and their functions

How to run proper top down analysis

How to trade supply and demand

How to trade support and resistance

How to read market trend

How to read pure price action

How to know market makers trap/manipulations

How to set stop loss and take profit

How to identify key levels and trade them

How to trade break of structure

How to apply proper risk management and lot more ………

Were just getting started

See you soon praizestells

reach out to me here