FOREX

The quick & fun way to learn forex trading Contains illustrations. Doesnt contain water.

15 MINUTES

BASICS & SECRETS

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FOREX IS NOT FOR EVERYONE!

Forex trading is a profession with relatively unlimited prot opportunities. However, you have to be aware that you will need not only knowledge and intuition, but also the ability to work under stress and the courage to take risks. Dont believe those who guarantee easy money with Forex, because Forex, like any other trade, requires hard work, discipline and sometimes luck as well. Before beginning in the Forex world, ask yourself if you have the following traits that describe a good salesperson:

A quick wit The ability to work and keep calm under stress The courage to take risks Persistence and the ability to make quick decisions

If you meet at least three of these criteria, its worth trying, because all the rest can be learnt!

YOU DONT HAVE TO BE GREAT TO START. BUT YOU HAVE TO START TO BE GREAT!

INTRO ON METHODICS
20%
The famous economist Pareto concluded that 80% of pea harvest comes from 20% of pea plants.

20% of people control 80% of all money 20% of employees give 80% of all company prot Its enough with 20% of the vocabulary of a foreign language to be able to communicate

The Pareto success principle

What this means is that 80% of any result come from 20% of the actions we do. The rest of our e ort is usually unnecessary. The key to success is nding out which knowledge and actions are the necessary 20%.

20% e ort

80% results

The essential 20% of Forex

This e-book contains the most important information and techniques that will allow you to begin trading in the Forex market quickly and e ciently, sparing 80% of the unnecessary information.

Advantages of forex trading

Make money even in times of crisis

While the stock market and commercial bank deposits are in deep depression during the crisis, Forex prots, because any change in currency can be used to make prot. A falling market is as protable for Forex trading as a developing one.

Work while lying in a hammock

All you need to start making money is a computer or a smart phone and an Internet connection. Your work space and goals are up to you!

25$
Easy rules

Start with $25

Unlike other nance markets, Forex doesnt require big savings for you to take part. There are good and reliable platforms with minimal deposits of as little as $25! See the Top of the Best Platforms at the end of the e-book.

Unlike stock markets with tens of thousands of di erent shares, Forex works with 8 basic currencies which are the centre of most trades. Moreover, there are signicantly less factors that inuence currency exchange rates than in the stock market.

Take your money whenever you want

A $50 billion market isnt just a miraculously beautiful number it is also what ensures that you can sell or buy any amount of currency you wish at any moment.

Forex Glossary

FOREX
foreign exchange The trade in Forex occurs between two currencies, because one currency is being bought and another sold at the same time.

Forex is an international currency market with daily deals worth $4 billion.

The most common currency pairs

EUR /USD GBP/USD USD/JPY

USD/CHF EUR /JPY USD/CAD

EUR /USD

EUR /USD
Base Currency Quote Currency

28 %

TOP PAIR
EUR/USD
Buying price (Bid) Selling price (Ask) spread point The smaller the spread, the more liquid the currency!

deals 1/3 of all

1.3000

1.3001

Point (Pip) The fourth unit after the decimal point, which is the smallest unit of an exchange rate. Spread The di erence between the sell quote and the buy quote (in pips).

What inuences exchange rates?

Central banks State economics Politics

Finance circulation Interest rates Mandatory reserve funds

GDP, ination, debt Sales amounts Interest from investors

Stability of governments Public statements Change of o cials

Example

HOW THE EURO EXCHANGE RATE DROPPED.

Prime Minister of Greece announces referendum

EUR /USD

Berlusconi resigns

ECB announces a new president

Central banks agree to stimulate liquidity of nancial transaction

The EU cannot agree upon changes in the treaty

Nov 1 2011

Dec 1 2011

Source: Morgan Stanley Research, Bloomberg.

The Golden Tool of Forex

Term

Leverage

Leverage allows one to go through with deals involving amounts of money that exceed the amount originally invested. This is an opportunity to gain signicant prot with even small changes in exchange rates.

Example

Leverage: 1:100 Invest $1000. Trade with $100 000!

Besides, each point by which the exchange rate changes will be multiplied by 100, in your favour!

The leverage e ect, naturally, also works the other way around in case of loss it increases its amount. However, there is a solution to loss the Stop-Loss Order. While using Leverage, the prot potential is limitless, but the loss will never exceed the original investment. The best platforms let you set a Stop-Loss Order and automatically close the position once the exchange rate drops below the deposit.

Make sure you have set the Stop-Loss Order before you start trading!

Transaction example 1

Following news
Information about a repeated crisis situation in Europe appeared as early as september 2011. It was already possible then to predict that the euro exchange rate should drop soon.

Sept. 16, 2011. Sept. 16, 2011.

World braces for second wave of the crisis

EUR /USD

1.4000

Choosing the transaction

1.3500

1 lot* ($1380) selling position is being opened, with a leverage ratio of 1:10 and an exchange rate of 1.3800

3
1.nov 2011 1.dec 2011 1.3000

Making the transaction

A month later, the open position is being closed with and exchange rate of 1.3108. The rate di erence is 692 points in my favour (1.38001.3108).

Prot $6920
692 points (leverage) x 1(lot) x 10

Term

*Lot

A lot is the standard transaction size in the Forex market, that equals 100 000 units of the base currency. A mini lot = 10 000 units. A micro lot = 1 000 units.

Transaction example 2

Choosing a platform
Even if youre new to Forex, there are beginner friendly platforms like ETORO that o er you an interesting opportunity to follow the best traders and copy their transactions.

Follow the leaders

Start following the best traders and watch their activities.

TOP traders Rudolph Boyle Alex Slovacek Daniel Lanham

Follow Follow Follow Follow Follow Follow

Copy the leaders

After you choose a top trader whose actions you wish to copy, decide upon an amount of money to invest into copying his transactions and press copy.

Prot
Now you can sit back and watch a professional make transactions for you. This is also a good way to learn Forex actions and tips in a real-life trading environment.

The reviews of aforementioned and other best platforms can be found in the Platform TOP at the end of this e-book

10 tips for a successful start

Start gradually
Dont open many positions at the same time. Its better to choose fewer positions, but weigh each of them carefully.

Dont stop the prot

An essential mistake beginners is closing the transaction too and thus not using the full potential. Trends last longer they might seem at rst! make soon prot than

Stop-Loss order
People often forget to limit their loss and therefore have to step out of the game very soon. With the Stop-Loss Order, you will be able to control the situation if the rates change unexpectedly.

Dont play against the trend

Transactions against a trend usually result in loss. Wait for a benecial tendency and then make your move!

Rule of 1/6
Specialists advise against risking more than 1/6 of your free capital when you arent completely condent.

If in doubt, follow the leader

If you still arent condent about your decisions, choose a platform that lets you follow leaders and copy their transactions.

Stick to the plan

Each good trader has their own plan, and the best make an e ort to hold on to it. Those who have the time, make daily transactions, others choose long-term strategies. Keep it steady!

Trends have momentum

Beginners often dont know that when trends start, they develop quickly because they are increased by traders following them. Use trends in your favour!

Multiple time frames

Diferentiate the time frames of analysis: weekly graphs are used to observe trends, daily and hourly graphs to observe the best time to open and close positions.

10 Close the unsuccessful

Dont hold unsuccessful positions open for a long time. Experience shows that its best to close them early and move on to others.

Reading graphs
The market can be analysed in several time frames: 10 minutes, hours, days, weeks. It may often seem that these indicators are contradictory. However, they arent, you just need to combine their readings. Analyses of longer time periods show tendencies, ignoring accidental changes, whereas daily and hourly graphs help in choosing the moment to open and close positions.

Example

MULTIPLE TIME FRAME ANALYSIS

time X

Let us look at a daily graph. What do most traders do when they see such a curve? They assume that its the beginning of a downward tendency and bid on the drop of the currency exchange rate. And theyre wrong!
3 November 10 17 24

1600

1550

1500

time X
1900

Now lets look at the same currency over a longer period of time. We see that the daily shift was accidental and the tendency is upward and not the other way around.

1600

1300

Aug

Sep

Okt

Nov

Dec

Conclusion

For a successful and precise market analysis, one has to use at least 2-3 time frames!

Best hours for trading

Although the Forex market is open 24 hours a day (except on weekends), there are hours which are better for making transactions. Its the London session, which is the most active period, and the time when the London session overlaps the New York session.

Trading sessions GMT (Greenwich Mean Time):

Best time
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 :0 20 0 :0 20 :0 :0 :0 :0 0 :0 :0 :0 :0 :0 :0 :0 :0 :0 :0 :0 :0 :0 :0 :0 :0 :0 22 23 24 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

London New York Sidney Tokio

Trading sessions EST (Eastern Standard Time):

Best time
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 :0 :0 :0 :0 0 :0 :0 :0 :0 :0 :0 :0 :0 :0 :0 :0 :0 :0 :0 :0 :0 :0 22 23 24 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

London New York Sidney Tokio

21

:0

:0

21

:0

:0

How to choose the right trading platform?

There are many companies that o er margin trading (Forex) services, and without the knowledge of the essential criteria, its easy to get confused in the large o er and choose an unsuitable or, in the worst-case scenario, an unreliable service provider. What is the most important when choosing a platform provider, and how does one orientate themselves in so many o ers? Below is a compilation of some advice from several professionals in the Forex market, which can be narrowed down to four basic criteria:

Reputation of the company

Evaluate the popularity of the platform provider whether there are any complaints about the services and what those complaints are, what the customer service is and whether or not prot payments are ever delayed.

Convenience of the user interface

1 2 3

You have to evaluate how easy and convenient it is to use the platform, what analytical options and extra tools it uses. It is best to check it by using demo accounts that are o ered by the best platforms.

Commission for paid transactions

The commission payments for transactions are described by the Spread, which is the di erence between the bid and o er price of the currency. The bigger it is, the more you will have to pay the service provider. In commercial banks that o er Forex platforms, these commission payments are usually higher than independent platforms.

Money transactions
The best platforms provide the opportunity to use Internet-banks, credit cards or online payment operators PayPal or WebMoney, which are the most convenient and easy methods of receiveing funds.

Best platforms of 2012

Platform

Min. Deposit

Leverage

Rating

ETORO Plus500 Ava FX ForexYard Easy Forex

$50

1:400

visit site

$100

1:50

visit site

$100

1:200

visit site

$100

1:400

visit site

$25

1:200

visit site

Demo

All of these platforms o er free demo accounts so you can practice before trading with real money!

1. RO platform review

best for

beginners

One of the most innovative and acknowledged platforms with the biggest number of clients more than 1.5 million users around the globe. Reasonably considered to be the most user, especially beginner-friendly and easy to understand platform. The interface is really amazingly convenient and visually appealing; sparing you complicated mechanisms and di cult-to-understand information. eToro is known for its unique social trading tools that let you follow other traders actions, discuss and copy the transactions of your favourite traders.

Facts
Super friendly for beginners Community for sharing & learning Social trading tools Possibility to follow & copy professionals Founded in: 2006 Registrated in: Cyprus Regulators: CYSEC, MiFID Minimal deposit: $50 Leverage: up to 1:400 Spreads: EUR/USD 3 points Payments: Creditcards, Paypal, BankWire, MoneyBookers, Webmoney Commissions: No* Contacts: + 1-866-350-0881, support@etoro.com
* Overnight commissions might be applicable

Platform pictures

visit site

2. Plus 500 platform review

best of

all-in-one

A popular platform which has proven itself since 1999. The program is also available for mobile devices including iPad which will allow you to make transactions wherever you are (Highest rated broker in UKs app store). With Plus500 you can trade not only currencies but also oil, gold, silver and even such commodities as co e or sugar!

Pros
Ease of use Low spreads Premium for rst deposit till 30% Available for many devices You can trade also with commodities

Facts
Founded in: 1999 Registrated in: UK Regulators: FSA Minimal deposit: $100 Leverage: up to 1:50 Spreads: EUR/USD 2 points Payments: Creditcards, Paypal, Bank Wire Commissions: No* Contacts: +44 203 002 7290, support@Plus500.com
* Overnight commissions might be applicable

Platform pictures

visit site

3. Ava FX platform review

editors

choice

Multiple award winning platform that is known for its reliability. The platform is well suited both for beginners and experienced traders as it is easily adaptable to your needs and preferences. A great feature is that Ava FX lets you customize and save your chosen layout and features. And the best part is the Mirror Trading which is similat to eToros CopyTrader, and allows you to use the knowledge of experienced traders by verifying your decisions and comparing them to Pros strategies. You can also use Semi Mirroring, which allows you to see buy and sell signals in real time.

Pros
Mirror trader Customisable dashboard 24h support Ultra high security

Facts
Founded in: 2006 Registrated in: Ireland Regulators: Central Bank of Ireland Minimal deposit: $100 Leverage: up to 1:200 Spreads: EUR/USD 2 points Payments: Creditcards, Paypal, Webmoney, MoneyBookers, Wire. Commissions: No* Contacts: +1-212-941-9609, customer@avafx.com
* Overnight commissions might be applicable

Platform pictures

visit site

4. My Trade Markets platform review

Forex Yard o ers the fastest registration - you will be able to start trading in 10 minutes. This platform is known for the quick transaction processing and it o ers xed spreads. For the beginners it o ers step-by-step instruction videos.

Pros
Fastest set-up Choise between downloadable or web platform

Facts
Founded in: 2004 Registrated in: Cyprus Regulators: CYSEC, MiFID Minimal deposit: $100 Leverage: up to 1:400 Spreads: EUR/USD 3 points Payments: Creditcards, Bank Wire Commissions: No* Contacts: +357-250-250-25, support@forexyard.com

* Overnight commissions might be applicable

Platform pictures

visit site

2. Easy Forex platform review

A friendly but still serious and trustworthy platform which has raised a lot of professionals. This platform o ers one of the easiest sign-up processes and multiple payment receival options. A pleasant feature is the super low minimal deposit - just $25. With one trading account you can trade from desktop, smart phone, iPhone BlackBerry or PDA. The variety of market reviews and analyses o ered by this platform is especially remarkable, which helps you make the right decisions.

Pros
Extra easy & fast sign-up Low minimal deposit Free market analysis news You can trade also with commodities

Facts
Founded in: 2003 Registrated in: Cyprus Regulators: CYSEC, MiFID Minimal deposit: $25 Leverage: up to 1:200 Spreads: EUR/USD from 3 points Payments: Creditcards, Paypal, Bank Wire Commissions: No* Contacts: cs@easy-forex.com
* Overnight commissions might be applicable

Platform pictures

visit site