Learn FX Courses

FX represents the world's largest financial market, transacting $7.2 trillion daily. Participants invest in what is popularly known as Forex primarily for speculative purposes, attracted by the following characteristics:

Leverage permits traders to amplify their potential returns in Forex trading through the deployment of minimal personal capital. This is achieved as brokers extend borrowed funds to the trader for executing transactions.

Liquidity - Because forex is the biggest financial market, many traders are active at any time during the week. This high trader volume makes the market very liquid, meaning you can quickly open and close trades in seconds.

Low Transaction Cost - Because in forex there are many traders trading at any one given time means that trade costs are lower due to this big volume of trades taking place in the trading market. The only transaction cost paid by the trader is the spreads: no other cost is paid by the traders. The spread is also only when one opens a trade: therefore if one does not trade then they don't pay any cost.

The several forex education courses that are available to technical traders or traders who want to learn analysis are covered in this guide. Once traders have mastered the fundamentals of forex, they may begin to learn more about technical analysis themes that they can apply to their trading.

Forex Lessons Help Beginners Grasp Core Analysis Ideas.

Basics of Technical Analysis

Candle Charts

For those who trade using technical analysis, the main thing they look at is the chart. Charts come in three forms: line charts, bar charts, and candle charts. Traders tend to favor the candle chart most of all. This is because the candle chart is set up in a way that is pleasing to the eye and plainly shows how prices change, using different colors to show different changes: like blue when prices end up higher than where they started or red when prices end up lower than where they started. Furthermore, these candles show the gap between the starting and ending price, which makes up the main part of the candlestick. This main part of the candlestick looks like the wax part of a typical candlestick. The highest price reached will be marked with what is called a shadow, and this shadow is a thin line sticking out above the candle that looks a lot like the wick of a normal candlestick. There's also another shadow drawn below the candlesticks, and this indicates the lowest price reached.

The data conveyed by candlestick formations is known as OHCL, representing the Opening price, the High reached, the Low point touched, and the Closing price.

Japanese candlesticks were first made in Japan by a well-known rice seller who traded futures: his name was Homma Munehisa, and he later traded on the Tokyo market in the 1700s. He became very rich by using these candlesticks to trade on the Tokyo market. People say he won over 100 trades in a row.

In addition to showing the graphical representations of price traders also use candlestick patterns to gauge & determine the momentum of the price movement. Traders also study these candle patterns so as to learn how to interpret and signals from the various candle patterns. Traders wanting to about the various candlesticks patterns can learn from our forex section under the analysis topics, the various candle patterns used to trade Forex are:

1.Long & short Candles

2.Spinning Tops and Doji Candles

3.Hammer Candle-stick Setup & Hanging Man Candlestick Pattern Candles

4.Inverted Hammer Candlestick Setup & Shooting Star Candlestick Setup Candles

5.Piercing Line Candle Setup & Dark Cloud Cover Candlestick Setup Candles

Six Key Reversal Formations: Morning Star Candlesticks, Evening Star Candles, and Engulfing Candlestick Patterns.

Support and Resistance Levels

Many traders refer to these critical price levels as support and resistance lines. These levels represent areas where prices often struggle to break through or surpass due to market dynamics.

At these junctures, market participants typically judge the valuation of the forex currency pair as either undervalued or overvalued.

Support

Support levels serve to prevent asset prices from being driven lower. These areas are consequently viewed as a floor, as they actively restrain the market from pushing prices beneath a defined threshold.

Resistance

Resistance levels function to halt the upward trajectory of an asset's price. Consequently, these price ceilings are viewed as barriers that restrain and prevent the market from achieving higher price points.

Traders use these levels to pick trade spots with good risk-reward. For instance, buy at support and set stop loss just below. You see the price as a bargain there. Sell at resistance with stop loss above it. The price feels too high then. Fewer buyers step in at that peak. So prices drop soon instead of rising more.

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.

Trend-line analysis involves utilizing line studies as a component of trading analysis to attempt forecasting future price direction.

A trend-line is a straight, angled line that joins two or more price points and then keeps going to act as a line of support or resistance later on.

Trendlines are based on the principle that markets move in trends. They serve to illustrate three main aspects.

The general direction of price movement up or down.
The strength of prevailing market price movement and
Where future support & resistance of the present 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.

Rising trend line - If a currency's price is going up, a line going up is created. This line is called a rising trend-line.

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

MAs Moving Averages Indicator

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

The way most people find out which way a trend is going is by using two moving averages to make what is called the MA cross over system. You can read about the MA cross over system in our forex strategies part. The MA (Moving Average) crossover trading system uses two moving averages, one with a shorter time frame and one with a longer time frame: for example, a trader could use the Moving Average over 5 periods and the MA over 7 periods. If a currency's price goes up, the two MAs will also go up, and if the prices go down, the two MAs will also go down. Traders can also see when a market trend changes direction because the two MAs will cross over each other when the price changes direction. Traders use this cross-over signal to know when to start a new trade after the crossover signal appears and the two MAs start moving in the same direction. Traders also use this cross over signal to know when to end a trade and get their money after there is a crossover in the opposite market direction.

Bollinger Bands Indicator

Bollinger Bands constitute a highly favored forex indicator, functioning as a trend-following tool meant to illustrate the general market direction. The Bollinger Band structure comprises three distinct lines, specifically:

·Middle band - this is a moving average of 20 periods

·Upper Band - shows upper limit of price

·Lower Band - illustrates and shows lower limit of the price

Middle band will show the general direction of the price trend whether up or down.

The upper boundary serves as the point where a trader executes a short position if the price movement is bearish or closes their long position along with its take-profit order at this level if the market is advancing.

The lower band is where a trader will open a buy trade if the market trend is up or close their sell trade & take-profit at this technical level if the market is trending downward.

FX Fib Retracement Levels

Fibonacci retracements are commonly utilized by traders to identify potential levels where price retracements might occur. These levels help traders decide on optimal entry points for their trades following a price pullback.

Fibonacci retracement amounts are presented & talked about in the learn forex lessons part of this website in the analysis subjects. Traders are able to learn to utilize the Fib retracements, which amounts are often used when starting trade deals & how to show these retracement amounts by using Fib retracement indicator.

All these analytical methods are also covered within the strategies section of this Forex learning resource website. Traders can explore these concepts further and view practical illustrations of how they are applied in trading through this section, which features numerous annotated screenshots demonstrating the drawing of these technical tools on Forex charts, along with explanations on how they are used to generate tradable Forex signals.

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