Introduction To Learn Forex Trading

As an introduction this tutorial and this website in general is designed in an easy and well organized format to facilitate and make it easy for beginners & those who want learn forex to do so in a manner that will make it easy for them to understand the forex concepts explained and come up with their own strategies that are effective when it come to trading the forex market.

This guide will try to cover an introduction to the currency market and traders can read through to get a basic idea of how to go about trading the trading market. Traders can also navigate to the learn forex lessons section to get a list of the learn forex courses that are covered on this web site.

The following information shows the various forex topics that are covered on this website on the forex learning section.

Introduction to Forex

These topics covers introduction to market by covering a definition of the market basics that traders need to know before starting out in forex.

In this topic the a trader will the basic terms used in the forex market, terms like currency pairs, fx quotes, base currency, quote currency, lots, pips, spreads, margin, long position, short position, trading platform softwares and charts.

Forex Strategies

In traders must come up with a strategy to trade forex with. A strategy is a method or a system which has rules set out that the trader will use when trading the market. The rules will specify when a forex trader will open a trade position, when a trader will close-out a trade & how much profit a forex trader wants to make from each trade and at what point they'll close-out their trade if the trade transaction transaction moves in the opposite market trend market direction.

Traders can find a list of the popular strategies on forex section of this website.

Forex Analysis

These topics explain to traders the various methods used to analyze currency market move using indicators & trading analysis studies.

For example some of the popular technical analysis studies in forex are:

Support & Resistance Areas

Some traders also refer to these levels as support and resistance lines. The concepts of support and resistance levels refers to price levels where it is difficult for the price break through & move beyond these levels.

At these levels traders are likely to perceive the price of the forex pair as being cheap or as being expensive.

Support

Support prohibits the price of an asset from getting pushed downward. Support levels are therefore regarded as a floor because these price points prevent and prohibit the market from moving prices down-ward past a certain point.

Resistance

Resistance stops the price of an asset from getting pushed upward. Resistance levels are therefore regarded as the ceiling because these price levels prevent the market from moving prices upward.

FX Trend-Lines

Trendlines are used to determine the general direction of the market.

Sometimes support and resistances are formed diagonally on a similar way like a stair-case. This forms a trend, a trend is a sustained movement in one direction either upward or downwards.

A trend line depicts these points of support & resistance for price.

Trendline is an aspect of trading analysis that uses line studies to try and predict where price will move next.

A trend line is a straight diagonal line that connects two or more price points & then extends into the future to act as line of support or resistance.

Trend lines are based upon the idea that the markets move in trends. Trend Lines are used to show 3 things.

The overall direction of price movement upwards/downwards.
The strength of current price movement and
Where future support & resistance of the current price movement are likely to be located at.

If a trend line forms in a certain direction then the price mostly move in that particular direction for a period of time until a time when the trend-line breaks-out.

Up-wards trend-line - If the price of a currency is heading up then a line is formed that is also heading up. This line is called an upwards trend-line.

Downwards trend line - If the price of a currency is moving down then a line is formed that also moves downward. This line is called a downwards trend-line.

MAs Forex Indicator

MAs are also used in forex to determine the general direction of the market. MAs is a price trend following indicators which's used to show the direction of the price.

Most common method of determine direction of the trend is by using two moving averages(MAs) to form the MA cross-over system. The Moving Average crossover trading strategy is discussed in our strategies section. The MA cross-over system is made up of 2 MAs one with a lower period & the other with a higher period, for example one might use the 5 period moving average and the 7 period MA, when the price of a currency is heading up the 2 moving averages also will be moving up and when the prices are heading down the 2 MAs will also be moving down. Traders also can identify when a trend changes its direction because the 2 MAs will crossover each other once there is a change in the direction of the price movement. This cross over signal is used by the traders to determine when to open a new trade after the crossover signal has been generated & the two MA start and begin to move in the same direction. This cross-over signal is also used to determine when to close a trade and take-profit after there a crossover in the opposite market direction.

Selecting a Online Broker

Traders will need to know how to choose and select a good broker. The first thing to look for is regulation; a fx trader should research and determine if a broker is regulated before deciding to open an account with the broker.

Opening a Demo Practice Trading Account

Traders should open a practice account commonly known as a practice account and use this Demo Practice trading account to practice for a period of one or two months. Traders will use the demo account as they learn forex concepts and strategies. Traders can test their trading strategies on this demo account before deciding if the strategy is profitable enough to trade with it on a live account.

Open a Live Forex Account

After traders have completed learning forex trading and have come up with a profitable strategy they should then open a live trading with their broker and start investing and the trading market. To open a live forex account a trader will be required to fill some paperwork after which they can then login to their trading account & start placing trade positions in the online forex market through their broker.

FX Tips

Come up with a written forex plan that will be a summary of all that you have learned in forex and this plan will specify when you'll open a trade, when you'll close a trade, the money management rules that you will use when opening trade positions & also it'll set out a list of the goals that you want to accomplish when it comes to forex trading. A trader can get an example forex plan template from the learn forex lessons section of this website in the currency key concepts topics.

Learn money management rules is also another good tip - money management rules are also explained in the learn forex section of this website in the forex key concepts topics. Money management rules will help a trader to learn the best methods to follow when it comes to managing their account balance. For example a trader can learn that forex money management specifies that a forex trader should not risk more than 2% of their capital on any one single trade.

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