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Forex for Beginners: One of the Best Forex Trading Courses

Discussion in 'Education, Tutorials & Courses' started by Kaitlin, Sep 6, 2015.

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  1. Kaitlin

    Kaitlin Forum Member

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    Dear FX Binary Point Forum Members

    This course "Forex for Beginners" will cover basic to advanced level Forex trading concepts and strategies. Before coming to the topic, first let’s briefly discuss what is forex and how you can make money by adopting good fx trading strategies based on effective forex technical analysis.

    What Is Forex Trading?

    Forex trading refers to electronic exchange of currencies, normally through an intermediary party known as broker or brokerage. Mostly there are three parties involved in online fx trading business that are:

    A Trader

    Trader may be an individual, group of people, a small company or large scale institution.

    Liquidity Providers

    Liquidity Providers (LPs) provide liquidity in the market. They are mostly large scale institutions conducting business with brokers.

    A Broker

    Broker is usually a company that connects traders with liquidity providers against some predetermined remuneration.

    How You Can Make Money With Online FX Trading?

    Just like any other trading business, online fx trading also requires complete understanding of factors that are conducive for buying or selling of currencies. The process of such understanding is commonly known as forex trading analysis. The trading analysis includes both fundamental as well as technical analysis. This forex trading course is all about the later type of analysis i.e. forex technical analysis.

    What Is Forex Technical Analysis?

    Price action is considered perhaps the best way to conduct forex technical analysis. In simple words, an analysis conducted on a naked chart is known as price action analysis. This brief forex technical analysis course will comprise of 8 articles, covering price action analysis, use of indicators, money management, and selection of broker.

    Article 1: Identify the Trend with Swing Analysis

    Article 2: Find Out Support and Resistance Levels Using Fibonacci Trading

    Article 3: Use of Trendlines in Forex Technical Analysis

    Article 4: Ins & Outs Of Candlestick Pattern

    Article 5: Money Management

    Article 6: Top 5 Mistakes in Forex Trading
     
  2. Kaitlin

    Kaitlin Forum Member

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    Swing trading or identifying the price trend with the help of swing analysis is one of the most widely used and successful forex strategies. It may be called a price action strategy because it doesn’t involve the use of lagging indicators.

    How to Identify Trend with Swing Trading Strategy?

    The price moves in the form of waves, thus leaving Higher Highs, Higher Lows, Lower Highs and Lower Lows on the chart as demonstrated below;

    ch.png

    Now in order to identify the ongoing trend, all you need is to observe these Highs and Lows very carefully. If the current wave forms a Higher High and Higher Low as compared to the previous wave then we say the ongoing trend is bullish.

    Similarly, if the price forms a Lower Low and Lower High as compared to the preceding wave then we say the current trend is bearish. Swings provide the most accurate direction about the existing trend.

    Which Timeframe Is Suitable?

    Well it depends on your forex strategy. The swing trading strategy is suitable for any timeframe. If you are a day trader then you may conduct swing analysis on hourly or four-hour timeframe, if you are a long term trader then you can do it on daily or weekly timeframes. Higher the timeframe, higher will be the reliability of the trend signal.

    How to Trade the Trend?

    If the ongoing trend is bullish then you should consider only buy (long) trades or wait for a reversal candle to emerge and vice versa. Also, the trades should not be based solely on trend analysis, the entry should be around key support/resistance levels. In our next topics, we are going to discuss how to calculate support and resistance levels.
     
  3. Kaitlin

    Kaitlin Forum Member

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    This article is all about Fibonacci trading which is considered one of the best methods for finding out forex support resistance levels. So let’s come straight to the topic.

    How To Insert Fibonacci Levels On Forex Chart?

    Inserting Fibonacci levels on forex charts is very simple, mt4 and mt4 software provide a built-in tool for this purpose. All you need is to select Fibonacci Retracement tool by selecting a symbol with dotted lines and F alphabet as demonstrated in the following chart.

    fib.png

    Once you click on the Fibonacci tool, the cursor turns into Fibonacci symbol. Now if the preceding wave has a Higher High then insert the Fibo tool at the bottom of previous wave and drag it to the top of the wave. Similarly, if the preceding wave has a Lower High then insert the fibo tool at the top point of the precious wave and drag it to the lowest point as demonstrated in the following video.

    http://screencast.com/t/dfM6mRuyf2C

    This is how you can draw Fibonacci support and resistance levels on forex charts. Not to mention, the key Fibonacci levels include 0.0%, 32.8%, 50%, 61.8%, 76.4%, 100.00% and 161.8%.

    How to Insert 76.4% Fibonacci Retracement?

    The Fibonacci tool does not have the 76.4% retracement by default. So you need to edit Fibonacci tool in order to include this importance retracement level. The addition of 76.4% into Fibonacci tool may be done by following a simple method as shown in the following video.

    http://screencast.com/t/VCHwuJGNjZS

    Besides adding 76.4% fib level, the above video clip also highlights addition of numerical value for each Fibonacci level by adding @%$.

    So this is how you can calculate forex support and resistance levels with the help of Fibonacci retracement tool.
     
  4. Kaitlin

    Kaitlin Forum Member

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    Trendline is one of the widely used trading strategies for calculating support and resistance levels in forex trading.

    Mt4 and mt5 platforms provide built-in tool for drawing trendlines on forex charts. You will need to click on a slash (/) like icon on the tool bar as demonstrated in the following graphic:

    2015-09-20_2028.png

    Once the trendline icon is selected, the mouse pointer will turn into trendline sign. Then you need to draw a trendline on chart as shown in the following video:

    http://screencast.com/t/8QBSHlyq

    You should connect as many candles as you can with a condition that the trendline should remain intact.

    In order to turn off the automatic drawing of trendlines, open the properties of trendline and uncheck the “Ray” option as shown in the following video:

    http://screencast.com/t/hBKxcRBVZXi

    Remember trendline trading strategy is successful only if it is used in conjection with other price action strategies such as swing trading, Fibonacci trading, MACD divergence etc.
     
  5. Kaitlin

    Kaitlin Forum Member

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    Ins & Outs Of Candlestick Patterns
    Candlestick Patterns Basics

    In candlestick patterns basics, we’re going to start right at the beginning with how to interpret candles.
    Each candle represents what price has done over a specific period of time. So,
    for example, let’s say you are looking at a 1-hour price chart; each candle will
    represent one hour and will show:
    • Where price was at the start of that hour
    • The lowest price reached during that hour
    • The highest price reached during that hour
    • Where price was at the end of that hour
    The Most Basic Candlesticks

    The simplest candles are the bullish candle and the bearish candle.

    upload_2015-10-4_9-36-16.png

    A bullish candle represents buyers overpowering sellers and is indicative of;
    yes you guessed it, bullishiness.

    And in a similar way a bearish candle represents selling activity being greater
    than buying activity and demonstrates bearishness.

    Single Candle Patterns

    Dojis, hammers and shooting stars

    Next to the bullish candle and bearish candle the doji candle is probably the
    one most traders will be familiar with.

    A doji candle occurs when the close of a candle is the same price as the open.
    There are two main types of doji candles. The first type indicates indecision in
    the market. The upper shadow and lower shadow will be of similar length and
    quite often you will get a few of these dojis one after the other.

    Here are a few examples of the indecision style of doji candle:

    upload_2015-10-4_9-37-13.png

    What is happening with this type of doji is that buyers and sellers are in
    balance. The traders buying and the traders selling have currently reached a
    price where they are in agreement.

    The other type of doji is what is called the ‘reversal’ doji; here is what this type
    of doji looks like:

    upload_2015-10-4_9-39-5.png

    So what is happening here? For the bullish reversal doji we are seeing sellers
    taking price lower and then buyers overpowering these sellers and taking price
    higher. This is a sign of bullishness as price tried to go down, could not stay
    down, and then was pushed back higher again.

    The same is true for a bearish reversal doji; buyers took price higher and then
    seller came in and forced price back down again – a bearish indication for sure.

    Reversal dojis also have very similar related bars; the bullish doji has a similar
    candle called a hammer; and the bearish doji has a similar candle called a
    shooting star.

    The hammer and shooting star candles are pretty much the same as their
    related reversal dojis except their closes and opens do not have to occur at the
    same price.

    Example of hammers and shooting stars:

    upload_2015-10-4_9-40-41.png

    Bullish reversal dojis and hammers can regarded as the same – the difference
    is minor; this is the same for bearish reversal dojis and shooting stars.

    Let’s take a look at some examples of bullish and bearish reversal dojis,
    hammers and shooting stars in action:
    upload_2015-10-4_9-41-39.png

    upload_2015-10-4_9-41-57.png

    upload_2015-10-4_9-42-37.png
     
  6. Kaitlin

    Kaitlin Forum Member

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    Marubozu

    Marubozu candles
    are an indication of a strong momentum-driven move.
    The fundamental feature that differentiates a Marubozu candle from an
    ordinary bullish or bearish candle is the lack of a distinct shadow. See below:

    upload_2015-10-4_9-48-9.png

    The premise behind the Marubozu is that, the after the candle has opened,
    price immediately goes in one direction without any pullback; further to this,
    the price continues in that same direction into the close of the candle, without
    any pullbacks (which would be shown by a shadow on the candle).

    In other words a Marubozu candle shows price heading in a single direction
    with very little pullback – which is indicative of a strong move with lots of
    momentum.

    Some examples of Marubozu candles:

    upload_2015-10-4_9-48-24.png

    upload_2015-10-4_9-48-36.png
     
  7. Kaitlin

    Kaitlin Forum Member

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    Two-Candle Patterns

    Bullish and Bearish Engulfing

    The Bullish Engulfing pattern consists of a first candle that is consistent with the current trend (i.e. a black candle if the market is trending down); the next candle’s low is lower, and high is higher, than the first candle.

    A Bearish Engulfing pattern is the inverse of the bullish engulfing pattern and occurs during, and can signify the end, of an uptrend. The patterns:

    upload_2015-10-4_9-57-0.png

    For the engulfing patterns to be significant they need to occur during a market phase where there is a single direction (i.e. a rally for a Bearish Engulfing pattern and a decline for a Bullish Engulfing pattern). A candle’s highs and lows will engulf a previous candle’s highs and lows often while the market is ranging– but this is meaningless and should not be considered. However, many times an engulfing pattern will appear while the market is making a move, further strengthening the move that is underway.

    upload_2015-10-4_9-58-17.png

    upload_2015-10-4_9-58-36.png

    Piercing Pattern and Dark Cloud Cover

    These final two patterns are, as with the previous patterns, the same, but one is bullish and the other bearish.

    The Piercing Pattern indicates that a downtrend may be coming to an end; and Dark Cloud Cover indicates that an uptrend may be coming to an end. The patterns look like this:

    upload_2015-10-4_9-59-32.png

    For a dark cloud cover pattern to occur the second bar must open above the first bar’s close (indicating strong upward momentum) and then close near the open price of the first candle (signifying that although the market was strong sellers have come it and taken it right back down – quickly!).

    The piercing pattern is similar to this; the second bar opens below the first bar’s close and closes near the open of the first bar – thus indicating the initial bearishness with the first bar and sudden bullishness as the second bar closes
    up significantly.

    Some examples of these patterns:

    upload_2015-10-4_10-0-30.png

    upload_2015-10-4_10-0-51.png
     
  8. Kaitlin

    Kaitlin Forum Member

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    Money Management
    Money management is a critical point that shows difference between winners and losers. It was​
    proved that if 100 traders start trading using a system with 60% winning odds, only 5 traders
    will be in profit at the end of the year. In spite of the 60% winning odds 95% of traders will lose
    because of their poor money management. Money management is the most significant part of
    any trading system. Most of traders don't understand how important it is.

    There are different money management strategies. They all aim at preserving your balance from
    high risk exposure.

    First of all, you should understand the term Core equity

    Core equity = Starting balance - Amount in open positions.

    If you have a balance of 10,000$ and you enter a trade with 1,000$ then your core equity is
    9,000$. If you enter another 1,000$ trade, your core equity will be 8,000$

    It's important to understand what's meant by core equity since your money management will
    depend on this equity.

    We will explain here one model of money management that has proved high annual return and
    limited risk. The standard account that we will be discussing is 100,000$ account with 20:1
    leverage . Anyway, you can adapt this strategy to fit smaller or bigger trading accounts.

    Money management strategy

    Your risk per a trade should never exceed 3% per trade. It's better to adjust your risk to 1% or
    2%

    We prefer a risk of 1% but if you are confident in your trading system then you can lever your
    risk up to 3%

    1% risk of a 100,000$ account = 1,000$

    You should adjust your stop loss so that you never lose more than 1,000$ per a single trade.
    If you are a short term trader and you place your stop loss 50 pips below/above your entry
    point .

    50 pips = 1,000$
    1 pips = 20$

    The size of your trade should be adjusted so that you risk 20$/pip. With 20:1 leverage, your
    trade size will be 200,000$

    If the trade is stopped, you will lose 1,000$ which is 1% of your balance.

    This trade will require 10,000$ = 10% of your balance.

    If you are a long term trader and you place your stop loss 200 pips below/above your entry
    point.

    200 pips = 1,000$
    1 pip = 5$

    The size of your trade should be adjusted so that you risk 5$/pip. With 20:1 leverage, your
    trade size will be 50,000$

    If the trade is stopped, you will lose 1,000$ which is 1% of your balance.

    This trade will require 2,500$ = 2.5% of your balance.

    This is just an example. Your trading balance and leverage provided by your broker may differ
    from this formula. The most important is to stick to the 1% risk rule. Never risk too much in one
    trade. It's a fatal mistake when a trader lose 2 or 3 trades in a row, then he will be confident
    that his next trade will be winning and he may add more money to this trade. This is how you
    can blow up your account in a short time! A disciplined trader should never let his emotions and
    greed control his decisions.
     
  9. Kaitlin

    Kaitlin Forum Member

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    Top 5 Mistakes In Forex Trading
    In this article we are going to discuss five common mistakes in forex trading that may result in losing all or most of your investment.

    Inadequate Knowledge

    Inadequate knowledge about trading is the main cause of failure for newbie forex traders. They jump into real trading even before learning and practicing the basic level technical/fundamental analysis on demo account.

    Low Capital

    Mostly newbie traders make small investment but desire insane profits in a very short period of time. This greed leads to emotional trading with improper risk/reward ratio and ultimately they reach to a point of no return. We often see new traders with expectations of making 100%-200% profit within a month or two out of just 500-1000 USD investment. In order to meet this unrealistic goal they indulge in overtrading and emotional decisions, hence blowing up everything they invest. So always set realistic goals and trade sensibly.

    Overtrading

    The only way to make consistent profit in forex industry is to wait for a perfect opportunity. Successful traders keep busy in technical analysis and open just 1-2 positions in a week which they believe 100% solid from technical and fundamental standpoint. So trade less and analyze more if you want to be successful in forex trading.

    Insane Leverage

    Choosing high leverage is also a prominent reason for failure in forex trading. Some brokers nowadays offer leverage as high as 2000:1 (because they are dealing desk brokers who earn through losses of their clients). High leverage allows you to open positions with big volume and many newbie traders consequently lose because of improper money management. It is always recommended not to select more than 200:1 leverage.

    Over Confidence

    Sometimes beginner traders lose just because of their overconfidence. After a winning streak of 3-4 successful trades, greed overwhelms and they make a bad entry with high volume, eventually losing most of what they earned during winning streak. Once it happens, their confidence and motivation levels are shattered and they lose remaining money as well.

    Conclusion

    Above was a brief summary of some common mistakes made by beginner traders. If you are a newbie trader and planning to invest in the forex market then I would suggest not committing any of the above mentioned mistakes. Spend most of your time in technical/fundamental analysis and enter a position with good money management only when you see a 100% solid opportunity.
     
  10. Tomas.Jacobs

    Tomas.Jacobs New Member Trader

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    This post is extremely helpful for the beginners..!! If you are searching for a binary or forex broker to place trades, then you must visit http://www.dailymotion.com/Products_Verified . Here, you will get all popular and completely legit brokers which take only $250 deposit to begin trading and deliver above 70% payouts.
     
  11. davidson333

    davidson333 Member Trader

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    Awesome and great Forex course. I love these type of Forex courses which can help a lot to learn Forex.
     
  12. Sarfraz Ahmed

    Sarfraz Ahmed Well-Known Member Trader

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    We should always run towards learning in whatever shape and size it comes, it’s only way we will be able to achieve positive results in long term. I have learned things really nicely and that’s especially to do with FreshForex and their mind blowing step by step educational course, it’s simply awesome and just see how many steps they have – [​IMG]
     
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