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Forex 101 - Week 1, Day 1 What is forex?
The foreign exchange market is a
global decentralized market for the
trading of currencies.
This market determines foreign
exchange rates for every currency
such as the Dollar, Peso, etc..
Here is a picture presentation that can explain forex more
Forex 101 - Week 1, Day 2How do you trade forex: Understanding Quotes
Currencies are always quoted in pairs such as USD/CHF, GBPUSD, and etc.
There are 28 currency pairs.
The reason why they are quoted in pairs is b/c you are buying one currency and selling another
In the top left corner of the chart, you see the pair GBPUSD.
This is the Great British Bound against the US Dollar
If you decide to buy this pair, you are buying GBP and selling USD. If sell, vice versa.
GBP - base currency
USD - quoted currency
Join tomorrow to learn more!
This is the Great British Bound against the US Dollar
If you decide to buy this pair, you are buying GBP and selling USD. If sell, vice versa.
GBP - base currency
USD - quoted currency
Join tomorrow to learn more!
Forex 101 - Week 1, Day 3 Understanding the meaning of Bid, Ask, and Spread Price in forex.
All forex quotes are quoted with two prices: the Bid and Ask.
You say, What is the Bid and Ask?
Keep reading
The bid price is what the broker is willing to pay for a currency.
The ask price is the rate at which a broker will sell the same currency.
As you can see in the picture, when you sell a currency, the broker will buy at that bid price.
When you buy a currency, vice versa.
The ask price is the rate at which a broker will sell the same currency.
As you can see in the picture, when you sell a currency, the broker will buy at that bid price.
When you buy a currency, vice versa.
What is Spread?
The spread is the difference between the BID and the ASK prices.
Spread = Ask - Bid
Example of calculation
The spread is the difference between the BID and the ASK prices.
Spread = Ask - Bid
Example of calculation
Why is there a Spread?
Forex brokers are businesses; they provide a service with the objective of turning over a profit.
So where are these profits coming from when brokers don’t ask for monthly account fees?
The Spread! A trade will start out in negative profit b/c of Spread
Forex brokers are businesses; they provide a service with the objective of turning over a profit.
So where are these profits coming from when brokers don’t ask for monthly account fees?
The Spread! A trade will start out in negative profit b/c of Spread
Quick review!
What is a forex broker?
Forex brokers are firms that provide traders with access to a platform that allows them to buy and sell foreign currencies.
A list of some are:
- Oanda
- FXCM
- IC Markets
- Hugosway
and many more!
What is a forex broker?
Forex brokers are firms that provide traders with access to a platform that allows them to buy and sell foreign currencies.
A list of some are:
- Oanda
- FXCM
- IC Markets
- Hugosway
and many more!
Forex 101 - Week 1, Day 4 Understanding pips and lot sizes.
What is a pip?
A pip measures the amount of change in the exchange rate for a currency pair, and is calculated using last decimal point.
How to calculate pip value?
For currency pairs displayed to 4 decimal places, one pip = 0.0001
GBPUSD Price
1.2200->1.2250, 50 pips
Yen-based currency pairs are an exception, and are displayed to only two decimal places (0.01)
USDJPY Price
107.55->107.45, 10 pips
For currency pairs displayed to 4 decimal places, one pip = 0.0001
GBPUSD Price
1.2200->1.2250, 50 pips
Yen-based currency pairs are an exception, and are displayed to only two decimal places (0.01)
USDJPY Price
107.55->107.45, 10 pips
When a trader says, "I made 100 pips on a trade (sell or buy),” that means the trader profited by 100 pips.
Now, the cash value of that trade depends on the lot size!
What are lots?
Lots are the number of currency units you will buy or sell.
Now, the cash value of that trade depends on the lot size!
What are lots?
Lots are the number of currency units you will buy or sell.
The type of lot size I will be referring to here are standard lots (common in U.S.)
The standard size for a lot is 100,000 units of currency.
There are also mini, micro, and nano lot sizes that are commonly used abroad.
The standard size for a lot is 100,000 units of currency.
There are also mini, micro, and nano lot sizes that are commonly used abroad.
As I mention before, you can have a winning trade that went 20 pips, but the cash value will be based off the lot size.
Check the picture below!
Remember, the spread starts you in negative.
Risk increased when lot size increased from .01 to 1.00 at the same open price.
Check the picture below!
Remember, the spread starts you in negative.
Risk increased when lot size increased from .01 to 1.00 at the same open price.
You see that the bigger the lot size, the bigger the reward.
You also see that the bigger the lot size, the bigger the loss.
That is why money management is important in trading!
You also see that the bigger the lot size, the bigger the loss.
That is why money management is important in trading!
Forex 101 - Week 1, Day 5
Understanding Order Types
What is an order?
The term “order” refers to how you will enter or exit a trade.
We will go over the basic order types that all brokers provide.
Understanding Order Types
What is an order?
The term “order” refers to how you will enter or exit a trade.
We will go over the basic order types that all brokers provide.
Orders fall into two categories:
1. Market order: an order instantly executed against a price that your broker has provided.
2. Pending order: an order to be executed at a later time at the price you specify.
1. Market order: an order instantly executed against a price that your broker has provided.
2. Pending order: an order to be executed at a later time at the price you specify.
Here is a picture that shows the two categories and the orders that fall underneath them
The definition of these orders
A market visualization of the pending orders
How to choose a order type on a trading platform such as MT4
Forex 101 - Week 1, Day 6
Understanding Trading Sessions
In forex there are 4 major trading sessions. They are:
- New York session
- London session
- Tokyo session
- Sydney session
Forex is open 24/6. The market closes on Friday and does not open until Sunday. Accept
Understanding Trading Sessions
In forex there are 4 major trading sessions. They are:
- New York session
- London session
- Tokyo session
- Sydney session
Forex is open 24/6. The market closes on Friday and does not open until Sunday. Accept
If you are in New Zealand, it will open up Monday morning.
The advantages of having a market that is 24/6?
It allows everyone in the world to trade whatever time they want. The stock market is only open for 6 and 1/2 hours per day for 5 days (weekdays) every week if no holiday
The advantages of having a market that is 24/6?
It allows everyone in the world to trade whatever time they want. The stock market is only open for 6 and 1/2 hours per day for 5 days (weekdays) every week if no holiday
Why you should learn about the trading sessions?
It is important to learn about the trading sessions b/c some pairs in certain sessions will not move much.
For example, trading GBPUSD in Tokyo session is probably not a good idea.
Think about it
It is important to learn about the trading sessions b/c some pairs in certain sessions will not move much.
For example, trading GBPUSD in Tokyo session is probably not a good idea.
Think about it
Majority of the people in the US and Britain will be sleeping while people in Asia will be awake.
Note*
The Tokyo session is sometimes referred to as the Asian session.
Therefore, you should trade a pair such as NZDJPY which will be moving more doing that time.
Note*
The Tokyo session is sometimes referred to as the Asian session.
Therefore, you should trade a pair such as NZDJPY which will be moving more doing that time.
If you have not notice yet, the trading sessions will tend to overlap with each other at certain times.
For example, New York session and London session overlap. Volatility increases when sessions overlap.
Below is a example of trading session times in EDT and Local time.
For example, New York session and London session overlap. Volatility increases when sessions overlap.
Below is a example of trading session times in EDT and Local time.
