EASY FOREX TRADING BASICS

PIPS:

In simple terms, a pip is a way to measure how much the price has changed. We use pips to figure out how much money we lose or gain in a trade. Let’s look at some pairs to see how the prices look. You get a better idea of how pips are made.

In simple terms, a pip is a way to measure how much the price has changed. We Use pips to figure out how much money is lost or gained in a trade.

• If GBP/USD moves from 1.2215 to 1.2245, that is an increase of 30 pips.
• If GBP/USD moves from 1.2245 to 1.2215, that is a decrease of 30 pips.
• If CAD/JPY moves from 84.10 to 84.30, that is an increase of 20 pips.

Some pairs have different prices, so let’s look at some examples to see how they look. A 100-pip move in GBP/USD is called a “pip.” If you looked, the 2nd number after the decimal point isn’t the same as the first number.

Example:
When you figure out the pip value for this, the number is different, so you now need to add in the second decimal. A little hard to understand? Let’s try a few more.

If the CAD/JPY moves from 84.50 to 86.00, that is a gain of 150 pips. With CAD/JPY, look at the first two numbers before the decimal point. They were both the same. Here, the 2nd number before the decimal is different, so it is shown.

In simple terms, a pip is a way to measure how much the price has changed. We use pips to figure out how much money we lose or gain in a trade, because some pairs have different prices, let’s look at a few examples to see how pips work.

Let’s look at some other situations where things might be a little different:

It costs 100 pips to move the AUD/USD from 7700 to 7600. Before, the 2nd number after the decimal didn’t change, so we didn’t include it in our calculations. In this example, the second number changed so it was included in our calculations. This is the same as the previous example.

You get a better idea of how pips are made. Simply subtract the numbers to obtain the pip value.

LOT SIZE:

The lot size is the number of units you are trading per trade. Here are the main lot sizes that you should be aware of:

Suppose we open a trade on AUD/USD with a lot size of 0.01. The trade moves in our favour 20 pips. Based on the chart, you could see that for every pip on a .01 lot size, you will either gain or lose £10. So we just multiply 20 by 10, and you’ll get the amount you earned in pounds, which is £2.

Let’s look at another one. Our AUD/USD trade moves 50 pips in our direction. We open a 1.0 lot size trade. We know that for every pip on a 1.0 lot size, you will either gain or lose £10. It is simple: 50 x £10 = £500.

This will help us better understand how many people live in a certain area:
Suppose we open a trade on CAD/USD with a lot size of .40 and it moves 30 pips in our favour. How do we figure out how much .40 is? Simple.

On a .10 tells us that we make or lose $1 per pip. Four times as much as a .10. Multiply 4 x £1, and you’ll get the value per pip for a lot size of .40. For every pip on a .40, you’ll gain or lose £4. So, if this trade moves by 30 pips, we can figure out how much money we’ll make. We multiply £4 by 30 to get £120.

These examples show how leverage works in a way that isn’t real. It is important to know what to do.

Make sure you know that the leverage varies between brokers, so be aware of that. One thing that some brokers even do is allow you to buy and sell stocks 1000:1 leverage and a lot more, as well as more. Normally, people think that the more you have, the better. A lot more power you have, the more money you’ll make, Unfortunately, this isn’t the whole truth. only thing true. When you use more leverage, you have a better chance of making more money. But if going the other way round and you losing is will also increase in chance.

MARGIN:

The amount of deposit that a trader makes to open a trade in the forex market. In simplified way, it is the amount of money you need to start a new trade.

To use leverage, a broker needs to give you money. Some money from your account is set aside by the broker to keep your trades open and make sure you can pay for any losses. Margin is a way to do this.

To put it another way, you can’t use the money you used to open a trade until the trade is closed. When the trades are done, the margin is put back into your account and can be used again. Please keep in mind that different assets need different amounts of margin. It takes a lot of money to trade indices and metal in comparison to currency pairs.

Images like this one show how much money you need to open a sale with the amount of leverage you choose. It costs less money to open a position in an account with much more leverage than it does in an account with less leverage. Remember that each broker has a different amount of leverage, so think about that when you choose a broker.

When you open too many positions at once, your account gets a lot of money.

You get a margin call when your equity isn’t high enough to meet the requirements for margin. To avoid a margin call, you must therefore transfer more money into your trading account or shut your positions as soon as possible if you want to keep trading. If you keep your losing trades open, your broker may close them so that your account does not go into negative, so you don’t lose any money.

Each broker has a different amount required they want you to put up as a deposit. The margin level is the level set by the broker that will actually make the broker call you for more money.

Let’s say that the broker I’m using has a margin level of 90%, and I’m going to use it. A lot of money is at stake if I have running positions and the margin hits 90%. I won’t be able to make more trades. Unless I add more money to my account, I can only close my existing positions.

IF THE TRADE KEEPS GOING IN THE WRONG DIRECTION, WHAT WILL HAPPEN?

If you’ve received a margin call and you leave your positions in minus open, and they keep going in the wrong direction, you will get out of the trade. There is another level at which the broker starts to close the losing positions. This is called a stop-out.

Your equity goes below the margin percentage you used when it goes below that. At this point, the broker will end your positions from biggest to smallest.

CHOOSING A BROOKER

A forex broker acts as a go-between for traders and the inter-banks, which is a group of banks. This allows you to buy and sell foreign currencies. Each broker has a wide range of financial instruments, like forex, commodities, stocks, metals, cryptocurrencies, and so on.

You need to do some research and find the Forex broker that works best for you. When you choose a broker, you want to make sure they meet your own standards. Credibility, experience, fast customer service, training materials, withdrawal and deposit methods, withdrawal speed, and more are things to look for when you choose a bank.

One type of broker is not regulated and the other one is regulated. There is a regulatory body that keeps an eye on regulated brokers. It is the main job of a regulatory body to keep an eye on the financial market to make sure there aren’t any scams going on. They also keep an eye on how much risk there is in the market and make people aware of it. The regulated brokers follow the rules, policies, and standards set by the localregulatory body when they trade and operate. In addition, they are audited by the people who control them. Regulated brokers must follow the rules set by their regulator. If they don’t, the regulator can take legal action, which could even lead to the broker’s licence being taken away.

When it comes to unregulated brokers, however, there is no regulatory body to keep an eye on them. People who work for these types of brokers can’t pay you back, are more likely to be manipulated, and can leave with your money and not be held accountable by the law. Traders who choose to invest with an unregulated broker can lose a lot of money.

APPS:

Trading View

What is Trading View?
Trading View is a web-based charting tool that lets you quickly and easily look at the markets. You can use it to keep an eye on the prices of Forex pairs, stocks and many other things that can be traded on the platform. The platform is free to use, but if you can save your chart analysis and layouts, you’ll have to pay for a plan. With the paid subscription you will be able to use more features that could help you with your trading. If you go to tradingview.com, you can look at the different plans and choose the one that is ideal for you. There is a free version, a pro account, a pro+ account, and a premium account that you can get, too. Trading View also offers a free trial so you can get used to the website before you pay for it. Note that the paid subscriptions have more features, but you can get them for free. It is a good idea to go into Trading View and learn about how the platform works.

Meta Trader 4 & 5

Meta Trader 4 & 5 is the most common app for all traders. It is found on all major platforms and easy to download. It can be found on all downloadable stores and can be used on multiple devices such and mobile and computer. This software was made to make it easier to trade and they have placed quotes and charts for the traders. This software is licensed to all the forex brokers in the world, so majority of brokers have paid the platform to use there services. So therefore, you will need to sign up to a broker beforehand since it will provide you the log in details you will need to enter once you have download MT4 or MT5, so you can begin placing trades and analysing charts on their platform.

Candlesticks give us a picture of what the price is doing. It sums up whatever we need to understand about how the price moved over a certain amount of time and helps us make decisions about when to enter trades.

Candlesticks show us how the starting price and the closing price changed during a certain time. We also see how much a certain thing cost at its highest and lowest price during that time. If we look at the daily chart, for example, each candlestick on the chart shows how the price moved over the course of that day (24 hours).

Another example is if we look at the 15-min chart, each candlestick shows how the price moved in that time. Each candlestick will show the entrance, closure, lowest, and highest price that was reached during that time. You can always change the time frame you want to look at the candlestick on.

Almost all candlesticks have two wicks: one on top and one on the bottom (shadow). Each part has a different version of information that can help you figure out how the price moves. In the course, we already talked about how a candlestick looks like. However, we’ll go over it again so that you know how to read it.

● The high is the highest price that has been achieved during the time you chose.
● The low is the lowest price that has been attained during the time you chose.
● The open price is the price where the candles opened during this same time.
● The close is the price where the candlestick closes during that time.

A lot of candlesticks are green (bullish candles), but you can always change the colours of the candles to match what you want. However, as a beginner,I suggest that you stay with the standard green and red colours so that you don’t get mixed up with other people.

Each candlestick has a different body and wick. Each has a different size and length. Some are small wicks, and some are tall wicks. There is no one in charge when one candle has a small body. A lot of people aren’t sure what they want to do in the market.Whenever the candle is big green, it means that buyers are in charge of the market at that time. When the candle is big red, it implies that sellers are all in charge of the market at that time.

The Doji

It is one of the most common candlestick patterns used by traders. In this example, the body of a Doji is very short. It has a closure and opening price that are very close to each other, too. Doji’s are often a sign that the market isn’t sure what to do. This means that both traders have the  same volume strength. A lot of times, these candles appear just before major move. As seen below you will generate a deeper understanding.

This type of candle does not have a lot of colour because the opening and closing price levels are the same or close to each other. This sort of candle means that the demand isn’t sure which way to go.

Types of analysis

This is where the fun starts.

Three types of analysis are being used in the forex market. This is a list of three types of analysis: technical, fundamental, and sentiment analysis. It helps traders figure out how the prices of certain things might change. Several other traders use several of these analyses to help them with their trading. There’s no right or wrong way to look at the market. It is more about what works best for you and your own unique plan. Let’s discuss about these so you can better understand what these are.

Technical analysis:

Technical analysis is looking at the charts and finding trading trends and patterns, figuring out how timeframes and candlestick formations work together, and so on. This is when we use the platform we talked about before, Trading View, to mark up parts of our charts that we find interesting. If you don’t know what all these things are, don’t worry, we’ll go over them later in this class.

Fundamental analysis:

When you do fundamental analysis, you look at the market from a macroeconomic point of view. It takes a lot of research into the political, economic, and societal pressures that could or could not affect an asset to find out what they are.

This is because certain events in the any country, like recessions and interest rate changes, will effect how much money the currency costs. Even if you are a fundamental and technical trader, you still should keep a close eye on this calendar to stay up to date on news that could have a big impact on a certain country or pair.

When we get to the end of the class, we’ll go even deeper into the basics.

Sentiment analysis:

Sentiment analysis is purely figuring out where other traders are in the market so that you can decide when to enter the market. Traders often have a view about whether a certain pair of currencies will rise or fall in value, that helps to establish the general mood of the market. People in the market might think that GBPJPY This might make a trader think about this when he or she enters a position for this pair.

Candlestick charts:

Same information as a bar chart, but in a more interesting way. Mainly, this graph has a bigger body in its middle, which shows how the price of an asset changed between when it opened and when it closed. This body is called a”candlestick.”
People can tell a bullish candle from a bear market candle because of the way candlesticks are used to look at the market. People usually say that a bullish candle will finish with the colour “green,” and a bearish candle will finish with the colour “red.”

Bullish/Bearish engulfing pattern:

As soon as one small bearish candle comes after another large bullish candle, the bullish engulfing pattern starts to form. You’re more likely to see this type of candlestick pattern around areas of demand, support, retracement levels, or psychological key points in the stock market.

If this pattern is correct, the big bullish candle must eat the body of a small candle. The body of a big bull market candle must be bigger than the body of a small bearish candle. The bullish reversal trend means that there are more buyers than sellers in the market at that time. The bigger the candle, ever more buy mass there is in the market, and the more proof that buyers are in charge of the market. In an upswing, the configuration of this sequence can mean that the trend will keep going, and in a downtrend, it can mean that the trend will turn around. When a bullish pattern is seen, it looks like this:

Types of orders

● MARKET EXECUTION is by far the most popular type of execution that people do. At the current market price, this is used to buy and sell at the current price
● LIMIT ORDERS: This type of order can help you get into the market more precisely. In contrast to market  orders, limit orders can be placed whether slightly past or above the  market price.
● BUY LIMIT is when you place limit on an order based on the price. When the price hits your buy limit, the order will automatically be placed.
● SELL LIMIT is the opposite of this, where you place a limit to sell the order based on price. When the price hits your sell limit, your trade will automatically be sold.

Let’s say you see a good chance to buy something in the market. The current price of GBPUSD is 157.97, so you can’t buy it right now. However, you think the price will fall to 155.152 before going up.

In this case, you set a buy limit at 155.152 and wait for the price to reach that level. When the market ultimately boils down to that region, the trade will immediately begin, and you’ll be in the trade. You will be in the trade.

Let’s say you see a good chance to short (sell) the market, however the current price is GBP/USD 134.81. However, you think the price will increase to 131.02 before going down. In this case, you set a sell limit at the price you think the stock will be worth at 131.02. You then expect the price to reach that level. People who want to be in a trade will get into it when the market reaches that point.

Exit orders

Take profit:

It is also called “TP.” All this means is that you should “take profit,” which is what the name says. It is used to take the money you’ve made when you start a trade. In this case, let’s say you go long (buy) on GBPUSD at 144.00, and you want to take your profit at 145.60. If the price reaches 145.60, you’ll be automatically out of the trade and in profit at 145.60. You can place your take profit level at this price. So, if you go short (sell) on GBPUSD at 144.00, you can set a stop-loss level of 143.50. When the market reaches  143.50, you’ll be out of the trade and in profit at 145.60.

Stop loss:

If trades deviates, a stop-loss (SL) will be your closest friend. It is an action that gets you out of a trade when it goes against you. It helps us to keep your money safe by not letting a trade completely wipe out your money.

At the start of this example, let’s say you want to go long on the GBPUSD at 145.00 and set your stop loss level at 142.90. If the price goes against you at 142.90, you’ll be out of the trade at a loss. Often, people don’t use a stop loss even though those who don’t want to get out of trades when things were not going their way. The more you don’t use a stop loss, the more you could lose. This can be enticing not to set a stop loss and wish that trade turns around in your favour. Trust me, practising setting a stop loss first. People who don’t use them can lose all their money!

Limit and Stop orders overview:

At a certain price or better, a limit order is placed. This is when you only want to start or end a new position or get out of an old one. Once the market gets to the price, the order will be  filled. As soon as the market reaches the price you set, you will be able to buy into the market.

It is important to set a buy limit at a price that is above the price that you’d like to buy at. Sell limits on the other hand, will put you in the market for a sell when the market hits that price. In order to establish a sell limit, the price of the item you want to sell must be less than the value of the sell limit.

This type of order is called a “stop order.” It turns into a “market order” when a certain price is reached. The price of a buy stop order will be reached at that point, and you’ll be able to enter the market with a buy. Whenever a sell stop order attains the price you want, you’ll be able to sell in the market.

To get into a new market, stop orders are often used. If you don’t know what a breakout is, don’t read on. We’ll explain later. There are many different ways to enter a trade. For example, let’s say we want to buy something, and the trade is close to a resistance area. Position a buy stop order just few pips above the resistance line if we think the price will keep going up. When the price hits the buy stop, this will start a buy into the market.

They can be good when you’re on the go and don’t have time to keep an eye on the market to make trades. They as well give you a lot of time to think about where you want to take profits and wherever you want to stop taking losses.

One type of trading is called “market execution.” Another type of trading is called “stop orders,” and still another is called “limit orders.” Some traders use all orders, depending on how they trade. It all comes down to you and how you trade. As long as it works for you.

Types of trading styles

There will be four main ways to trade.

There is no “right” way to trade. It turns out that each person has a unique way of trading that is based on their preferences, lifestyle, and day-to-day tasks.

There are a lot of different ways to do things, so which time span you use and how long you keep a job open will depend on how you do things. Let’s look at them.

Swing trading:

There are many different types of swing trading. One is called medium-term trading, and it is when you keep an open position for several days. This form of trade is good for people who can’t always keep an eye on their trades.

This makes it very popular with people who have other things going on, like education or work . A lot of patience is needed for swing trading, because the position may take a long time to work itself out.

Scalping:

Scalping is perhaps the briefest way to trade. To use this strategy, you need a lot of time and like to trade quickly. Most of the time, those same types of trades don’t last more than a few minutes. The main goal is to profit from small changes in the market during one of the most volatile parts of the day.

They love scalping because it is exciting to open many trades a day and stay on the charts all the time. Scalpers can make a lot of trades every day in the hope of making a small profit on each.

Scalping requires a lot of time and effort to keep an eye on the charts. People who can respond quickly to changing market conditions should use this strategy.

Day trading:

Day trading is a way to make money quickly, but it does not work as hard as scalping does.

Day traders usually start and end their trades on the same day. At the end of the day, most day traders close their positions either with a profitable price or loss. For most trades, they are held for a short time to a few hours. Thus, day trading is a great starting point among scalping and swing trading because it is a good middle ground between such two.

Position trading:

Taking a position is by far the most long-term way to trade. There are many types of position trades. They can last for weeks, months, or even years! they don’t care about the short-term changes in the market. Instead, they look at how an asset moves over time.

People who trade in positions can use both technical and fundamental analyses to figure out what the long-term trend is for an instrument or asset. The effect of how economic data determines the next move for a a country that is linked to an asset is very important for a position trader to be successful.

Comparable to swing trading, the stop order on position trades can be very huge, so you need to make sure you have enough funds and margin to open position trades. Also, this trading technique requires patience.

First, let’s discuss more about structure of the market.

Market structure is just a picture of how prices move in the market. It looks at how prices move in the market to find basic support and resistance zones, as well as swing highs and swing lows.

Still can’t figure it out? Let’s go a little further.

Uptrend (Bullish market)

An uptrend would be when the market will make more highs and more lows. It is called a “bullish trend” when the high point of the next day or so is higher than the high point of the last day or so. Whenever the buy order flow volume is more than the sell order flow volume, there is an uptrend in the market.

Buyers usually buy at the high points in an uptrend because they think the market will keep going up. This then causes problems in the market, which makes the market push the price up.

Downtrend (Bearish market)

A downtrend is just the flip side of a rise in prices. It is essentially when the market will make lower lows and lower highs. A bearish trend is when the next low point starts to break the past low point.

This is how you know it is a bearish trend: There are downtrends when the sell order flow volume is more than the buy order flow rate at the same time. It is common for people who want to sell things to do so when the market is going down. They think that the market will keep going down. By doing so, the above creates inequities in the market, which causes prices to keep going down.

Ranging market

A ranging trend, also called a sideways trend, has equal highs and roughly equivalent lows. This market is not like an uptrend or a downtrend, which both make highs and lows.

Instead, it moves back and forth between support or resistance areas and does not have a clear direction. It can be a good idea for traders to stay away from trading range-bound markets, and I have found that it can be a good way to make money. In a range-bound market, you want to purchase a buy at the support level and purchase a sell at the resistance level, so that you can make money.

Identifying when the trend is changing

In an uptrend, if the price does not make a new high, the trend could be going in a different direction. In addition, failing to make a lower high in a downtrend could mean that the trend is about to change. A bullish market has changed its direction.

In the drawing above, you can see that the market starts making higher highs and higher lows, which means it is in an uptrend.

However, price drops the past higher low and makes a lower, which then makes a lower high. This split of the structure means that the trend is going to change, and that the downtrend is going to start.

In this case, more sellers are in the market, so the sell order flow volume has become powerful than the buy order flow volume.

Cycles of the market

The accumulation phase:

A lot of the time, this phase appears at the end of a declining trend. Traders and early investors usually lose money during this phase. When the losses get too big, they start to close their positions and get out of the market.

As they start to get out of their positions, this same smart money is on the other side, waiting for a good deal to come along. In the long run, as more buyers enter the market and more sellers leave, there is an imbalance that causes the price to rise.

At this point, the price does not move much at all and stays in a tight range. It is the goal of this phase to get the best deal on an asset and get as many orders as conceivable.

During this step, market makers often push prices down just below support levels to shock retail traders out of their positions and/or take out their stop losses. They then drive the price in the direction they want it to go.

The ascending phase:

This is when there are enough market makers who are prepared to move the market. As soon as the price starts to break outside from consolidation and above resistance, there will still be a big move to the right.

During this phase, the market starts to move in an upward direction. This is what causes the disparities in the market, which leads to higher highs as well as lower lows to form. Before, we talked and said that there was a lot of buy order flow. That volume is bigger than the sell order flow volume.

It is the best time to buy at the greater lows in the market when the market is going up. There would likely be a lot more people buying than selling, so you can start a trade and let it run for a while. Traders will get into the market when they see that prices are going up. This will help push prices up even more. A lot of people call this “the public taking part.”

The distribution phase:

This is when market participants make enough money to meet their goals and begin selling. These things happen at the end of an uptrend that has been going on for a long time.

Most of the time, retail traders and small investors start to buy, while the smart bet is selling to make sure they get all of their money back. There will be some sideways movement, like when you are accumulating money.

In the delivery process, they may even spread news stories so traders think the market will keep rising. People who don’t know what they’re doing will then buy at the highest part, starting to think that the price will go up, so they’ll do that.

It is just like people who want to buy things think the market is going to go up. The smart bet wants to go short (sell) inside the market instead.

The descending phase:

In this phase, buyers are going to look to go sell in the market when people think the market has been going up.

After the smart money has sold their buy positions, this phase starts. A lot of buyers will leave the market during this phase, which will push prices down quickly. A downtrend is set up during this phase. This imbalances the market, which causes lower lows and lower highs to be formed. Due to a sell order measured and expressed being bigger than the buy order flow volume.

To sell at lower highs is a great idea during a fall. There would likely be a lot more people selling than people who are buying, so you can start the trade and let it run.

Support:

Support, also known as the “floor,” is where all the bearish trend has slowed down. This is where the price has a hard time breaking below and then starts to rise. This word is used a lot because it is like how well the floor supports us once we walk. Buy at support if we have other signs that the price has a great chance of shifting to the right.

Resistance:

Bullish momentum has come to a stop at resistance, which is also called “roof.” That is where the bullish movement has stopped. This is where the value has a hard time breaking above and starts to fall. There are times when resistance is called a “roof.”

This is because it stops prices from going up. We want to sell at support when we know that the price has a better chance of getting down.

Rejection:

Rejection is when you try to break through a key level and fail. This occurs whenever a market is too high or too low. Rejection areas help you determine out if the price has a decent chance of turning around.

The way the candlestick looks and the way the price moves around important support and resistance points will help you find these rejections. Wick: You can figure out refusals through the wick of your candle.

After a support level is broken, whenever the price is going down and the price comes back up to the that level before going down again, it is very likely that this will occur more often than not.

When the market is going down, we usually sell when it comes back to where it was. Start taking a look at the picture above. People who are in a downtrend really would like to allow time for the market to come back to the broken key points.

Incorporating trend lines:

When you use trend lines accurately, they can become very useful when you trade. As long as you don’t abuse this simple and useful tool, you could end up making things worse. Trend lines are lines which we connect on the charts that show and help us see trends in the market. If you’re watching a trend, these lines can help you figure out where the high points are and where the low points are, too.

What are counter-trendlines:

As long as there’s a trend going on, countertrend lines can be quite useful. Let’s look at the two parts of a counter trend line. In the first place, it shows a smaller movement in the market than the general pattern. There is also a “countertrend line,” which is on the opposite side of the main trend.

So, if your trend is going up, the countertrend line would be used to look for a smaller downturn in your direction. As a result, it is a great chance for you to get into the bullish market multiple times.

On the other hand, if the overall trend is down, the countertrend line will be used to find a small uptick. Then, there are more chances for people to get in on the whole bearish move at the same time.

Most of the time, when you use countertrend lines, you would like the countertrend line to break and then be retested before you push in the main direction.

It is best to wait for a proper re-test of the region even though trend channels can break early. This is when the price breaks out of the channel and then comes back in. Therefore, it is important to get as much confirmation as possible before taking a trade.

In general, an ascending channel is seen as a bearish sign because it usually comes into being when the market has been going down. It usually means that the trend is planning to keep or that it is starting to alter.

Many individuals consider that the market is moving in a random way. This is not true. Price moves in cycles and always makes the same patterns. These trends can be used in your trading plan because they happen all the time and can be easily seen with a little practise.

When you want to be a good trader, you need to know how to read “chart patterns.” Every trader needs to learn how to recognise price configurations on the charts to make money. Besides what we’ve learned before, we can use these trends to give us an extra edge in the market.

Forex charts have three main types:

• Reversal patterns
• Continuation patterns
• Neutral patterns

After these reversal trends appear, they usually change the direction of the current trend and start a new one in the reverse way. Basically, if the market is going up and then makes a few of these patterns, it is very likely that the price will turn around and go down.

Head and shoulders pattern:

Head and shoulder is among the most well-known technical patterns for both novice and experienced traders. This trend is essential because it has been in use for a long time in the market.

As for the Head and Shoulder pattern, it shows when the market would be most likely to change from a bullish trend to a bearish trend. Before we go on, it is very significant to mention that head and shoulder patterns aren’t always as perfect as the picture abow.

The head and shoulders structure is made up of three well-defined peaks. The left shoulder, then the head, and then the right shoulder. Left and right shoulder must be lower than head, but they must not be the same height.

This means that even though symmetry is ideal, most of the time, the shoulders are not balanced. People sometimes have had more than one shoulder. A complicated head and shoulder pattern is formed when this happens, which is why it is called that.

Inverted head and shoulders:

In other words, the Inverted Head and Shoulder pattern is the exact opposite of the pattern we just talked about. In many other words, it looks like the head and shoulders are upside down.

This is usually a sign that a bearish trend is ending and a bullish trend is beginning. Because of this, the opposite pattern is a sign that the market is going from a downward trend to an upward trend.

You can see this pattern when you see three lows followed by two short-term price rallies. When you look at the inverse pattern, you’ll see that the mid-drop, which is the head, is the smallest.

First, the second shoulder will form. Then the prices will make a final push, trying to break above the neckline and signalling that a bearish trend has turned around and that the bulls are likely in charge of prices.

Double top/Double bottom:

In the stock market, if you’ve been trying to trade for even a few days, you’re likely to have seen this chart pattern before. This trend becomes even more common from the one we talked about before.

Double tops are formed when two highs are made at a resistance or supply zone. As prices reach their highest point in an uptrend, they often form double tops. This happens when the price tries to break above the points of resistance or supply. To make a second peak, it then makes a short run back down to the support level.

It is one of the most common myths that once the second peak has been established, the pattern is instantly exchangeable. This is not true. This is wrong and can cause a lot of money to be wasted. The best way to trade a double top pattern would be to wait until the neckline is broken and rechecked before you make a trade.

Bullish/Bearish expanding wedge:

These trends aren’t as popular as the ones we talked about before. I don’t trade them that often. If you can find them, it is still important. While the pattern is forming, it is hard to predict when it will break out because of how different it is.

The bearish broadening block is almost the same as the bullish expanding wedge. Pattern: It is just the same but flipped. It is different from the Falling Wedge, which makes the price move down as the template shapes. The bullish/bearish expanding wedge makes the price move up as the trend forms. Even though it is called a reversal pattern, the trend could still go on.

Price action traders: We use mostly price movements to make a decision when and where to enter a trade. Most people who start trading think that the only thing they should be productive is to use indicators.

This is not true, and it is a myth. There are a lot of positive indicators out there, but they should only be used as proof, not as a stand-alone tool. When we talk about indicators in this class, the only one we’ll talk about is called the moving average.

The moving average is one of the most popular indicators for traders to use. Use this indicator to get a better idea about where the price is going. Moving averages are mostly used to figure out the trend of the economy and also to figure out where dynamic support and resistance is.

Types of moving averages

There are two types of moving averages: the simple moving average (SMA) and the exponential moving average (EMA).

The SMA is the most common type (EMA). Because they look the same, they are not the same. Most essential is how each reacts to changes in the information. An EMA and a SMA are very different in this way: The simple moving average measures the average value of the assets over a certain period of time.

The exponential moving average, on the other hand, adds more recent data, which will give you more accurate data. It has a little more weight than that of the simple moving average even though newer data will have a bigger impact than older data. This is why it has more weight.

It will be above both exponential smoothing when the price is in an uptrend, and below these moving averages when the price is in a downtrend. The 200 EMA gives you a long-term look at the market, and the 50 EMA tells you when to get into the market based on that look.

We understand what support and resistance are, and we can tell them apart from each other. So, what is supply and demand about?

Besides, how are they different from support and resistance? A lot of people assume that supply and demand and support and resistance are the same thing. Even though they have some similarities, they aren’t the same at all.

Recognizing supply and demand will assist you in finding out where banks are getting into the market. If so, you might have heard of “trading with the banks.” This is what individuals mean that. It is making trades in the same place that the banks are making trades. When banks trade, they can’t put all of their positions at once so their positions are so big.

Smaller orders are placed around same price in order to avoid this, so they do not all come at the same time. Our job is to identify in which originally put their order so we could have an idea of where they most expected will push the price back to. There are many ways to trade supply and demand. You can figure out where the banks had also freely traded, and then look for opportunities when the price comes back to that area.

In plain terminology, supply and demand zones are places where price has created a major move to the right or the left. The area where the price moves quickly to the right can be thought of as a place where people want things. In this case, we would look for a possible purchase entry point at the price that would return. When the price of something goes down a lot, it can be called an area of supply. In this case, we’d look is for price to come back so that we could make a sell trade.

One of the best ways to find these areas is to look for a big change in the market. These quick changes show where banks are buying as well as where they are going to sell. When you want to find more high-probability zones, you should look for them on long periods, like the 4 hour chart, the daily chart, or the weekly chart.

The 1-hour and 15-minute charts can also be used to look for these zones. It all depends on how much expertise in the field you have or what kind of trader you are.

Supply areas could be found when a sharp drop comes either by a period of small consolidation (called the base) from one large bearish candle. To figure out where the supply is, look at the open of your last bullish candle before it fell.

If the candle right before the fall is a bearish candle, we look with the latest bullish candle that came before. This is where we draw a zone for when the opening of a bullish candle happens. It is based on the last high that the market decided to make before it went down.

In order to draw demand zones, we use the clear from the last bearish candle just before move to the upside to do this.

Zone:

We draw it from the lowest point before a move up to where it opened that same candle. In order to draw a demand zone, the candle where you’re going to draw the zone requires to be down. It is important to figure out which candle was the last one that was bearish before the move up. Then, draw your zone around it.

Why does this happen? Because banks don’t make trades on movements that are going in the way the banks want to move the market.

Supply and demand zones will not be respected or retested in every case, but some of them will be. Sometimes, the price of something does not come back to retake the test the area where it was sold or bought. As the market has indeed been ahead from a certain area, many people think that it is more likely to return. Based on what I’ve seen, this isn’t true.

More recently tested parts of the city are much more probable to be checked out. Keep an eye out for the older zones, but please remember that they’re less likely to also be retested, so don’t worry about them. Also, when they are retested, they aren’t going to become as effective as the zones that have been around for a longer time.

Multi-timeframe analysis essentially means, looking at an asset over a number of time periods. It is about keeping an eye on something over a long period of time.

There are no limits on how often timeframes you can look at for a single asset.

I usually look at three or four different timeframes to get the details I need.

The best way to look at the markets is to start with the bigger timeframes, then move down to the smaller timeframes.

A timeframe in forex trading can be any period of time in which trading takes place, like an hour, a day, or a week. Most of the time, forex timeframes will be measured in minutes, hours, days, or weeks, but this is not always the case. You will pick the time frame that is best for your trading strategy.

How you should analyse the market:

• Daily time frame

• 4-hour time frame

• 1-hour time frame

• 15-minute time frame

• 5-minute time frame

Whichever time-frame you use varies depending on how you trade.

I use the Daily as well as 4-hour for the overall vision of the market. This way, I can tell if the market is going up or down. If indeed the market is going up, I know I want to buy things. If the market is going back, I know I want to sell things.

Afterwards, I’ll go back down to look at the 4-hour or even 15 minute time frames. Here, you’ll see a lot more bends in the market, which will help you find good trades. If you say “curves” in a simple way, it means that you can see how the price moves better.

To wrap up this section, you can’t see the whole view of the market by looking at trades on just one time frame. Based on what I’ve learned, it is best to look at the bigger time frames to see where the market is going. That is when you want to look at the lower timeframes for more confirmation and trading chances.

Liquidity shows where a huge amount of money is sitting in the market. To put it another way, it is where traders set their stop losses. Banks often take liquidity (stop losses) in order to move the industry in the direction they want it to go.

There is a lot of money out there, but where do we find it? It is very easy. It is at these places that you’d expect a trader to place their stop loss, sell stop, and buy stop orders, so Liquidity can be found above resistance and below support, above equivalent highs and below equal lows, higher lows in an uptrend and below lower highs in a downtrend.

So how did we believe that the market was going to rise? That value wouldn’t keep going down.

Well, when there is a lot of money being taken, the market usually pushes in the opposite direction. This is a good sign that the price will keep going in the opposite direction of where the money was taken.

There is a lot of money in the market. Remember that trading is based on your own preferences and needs.

Everyone sees different things, so there are always people getting in and getting out of positions when the market moves. Your major aim was to find out where other traders are likely to put their stop losses.

The term “fundamental analysis” refers to market indicators that influences the prices of currencies, commodities, and stocks. Many traders use both technical analysis and fundamental analysis, or they only use fundamentals. as for myself use technical analysis more than fundamentals, but there are many other traders who do the same.

They don’t look at the financial data coming out each week even though they don’t know how to do that yet. If trades are made at the same time as these high-impact news releases, the trades could be stopped out too early and lose money. In order to keep track of important data, we have been using economic calendars.

At the start of every week, an economic calendar goes on to tell you what is going to happen with the currencies. It tells you when and on what day the news would be released, then you can plan your trades. There are a lot of things that could happen that could affect the market, like recession, Non-Farm Payroll, inflation, FOMC meeting, and more. So how do we understand which news to pay attention to?

Before you start trading in the forex market, you need to learn how to read the forex economic timetable correctly. It is a good idea to look at the calendar well over weekend and every morning each week to keep the data in your head.

Site to use:

When you look at a calendar, it will show you everything that happens in the world’s major economies, but not all news is the same. I make it show me only news that has a big impact on me. To do the same, just click the “filter” button and choose to only see news that has an impact on you by only needing that checked. You may choose in what currencies you just like to read about in the news, too.

Let’s take a look at some High-Impact releases that affect the market!

High interest rates:

A rise in interest rates means that the currency value rises because more people invest in a country with a higher interest rate. Although, having a stronger currency comes with its own set of problems. Exports will be more expensive if the currency is stronger.

Interest rates also go up, which makes it more expensive to get a loan.

Furthermore, if the interest rate of a country goes up, the value of its currency goes up, too. People in those countries would have a hard-line money policy in this case, too. To fight high inflation, countries often keep interest rates high.

Doing so as well slows things down the growth of the country. As a result, don’t be surprised when you see high inflation in a country and the country’s rate of interest goes up in order to fight it.

Low interest rates:

It happens when a country lowers its interest rates. This means that the value of the currency for that country drops.

During a time when equity rates are very low, there are hardly any investments because there are less chances for a return. When interest rates are low, shareholders don’t make as much money since they would if they had more money.

As a bonus, low interest rates make more money move around in the market, that is good for us. They use a “dovish” monetary policy to help the economy grow and fight back against bad times in the economy.

This is among the most crucial pieces of this class. In other words, no matter how well you know how to look at the charts, if you don’t use proper risk management, all of the technical indicators in the world won’t help you.

When you deposit funds in to the your trading account, you put some of your money at risk with every trade you make. This is called “risk.” If you want to make money, you should always be willing to take a small risk with each trade. When you put money at risk, you can decide how much of that money you put at risk. However, this should be an amount that you are willing to lose.

The truth is that no matter how good you are as a trader, no one can anticipate whatever the market is going to do. To make sure you stay on track with your risk management plan, you need to be very careful. This can be hard to understand, but risk management is very easy! Only risk 1% to 3% of your profile on each trade when you trade.

As a general rule, what this means is that when you risk only 1-3 percent of your account, even if the trade goes bad, you won’t be losing everything. You can only use the money that you have choose to risk.

Many traders, particularly new traders, don’t think about this because they think it will take a long time to build up an account with good risk management. Please don’t think this way. Use the right amount of risk to stay in this game for a long time, unless you are very fortunate, which is very rare in trading.

Our biggest targets are to ensure the following:

● Protect our money.

● Maximize your income.

● Keep your losses down.

How much money you make or lose will rely heavily upon that lot size you choose when you start a trade. Well, how then do I figure out how much to buy? Very easy!

Always consider this:

• The value of each pip in a standard lot is called the
• How many pips is your stop loss? (VERY IMPORTANT)
• It is how much of your money you decide to risk on the trade in question.
• Your account balance is what you have in it now

Why do the majority of people fail?

Numerous traders lose their money and don’t make consistent money for a long time. Because they didn’t work out the market, they don’t win. It is not because they can’t change their mindset that they lose. Many people think that trading is a way to make money quickly because of false stories that are spread on media and the internet.

Many people who start trading think they can leave their jobs in a week or a fortnight because they can turn their £1000 account into £100,000 in very little time. This is not true. If you think this way, you’re going to have a near-failure every time.

When you trade, you should think of it as a funding rather than a risk. In the long run, men who view the financial markets like a slot machine and think they can make lots of money straight away frequently end up losing all of their money.

We all know that trading isn’t as easy as people make it out to be. You can find a lot of clever traders who still start losing more money than they make because they have wrong mindsets.

The few traders who consistently make money in trading have the right mentality that allows them to just be steady winners. There are certain belief systems, behaviours, and psychological attributes that are important to succeeding in the world of trading.

If your mindset isn’t right, you’re going to have to change some things so that you can trade.

Your mindset and perceptions will have a major effect on how well you trade. There is a massive distinction between such a trader who makes money and one who does not. One thing that makes a good trader seems to be that they have been able to keep their confidence. Being able to keep your self-confidence even when you win and lose is very important to your success. Remember that even the biggest winners lose occasionally. Every now and then, you’ll lose a trade.

Other times, you’ll lose for days or even months. Keep in mind that once you have a long-term strategy that works, don’t start doubting yourself because of a few things that didn’t go your way. If you are a good trader, you can look past this same failures and keep going.

In contrast, many traders who lose have a lot of self-doubt. The first thing they think about when they lose is to give up. People who see themselves as losers or afflicted with poor luck are more likely to live out that way.

Traders who don’t believe they can make money often don’t take trades after they lose because they’re afraid they’ll lose again. People who do this might not be able to get good deals in the market. As long even as market does not turn out the way you would like it to, don’t lose faith in yourself.

Professional traders know that even if they use the best analysis of the market, occasionally their trades won’t go their way, even if they do everything right. However, they are still able to keep their calmness and confidence. Accept and understand the way you think now.

In this case, you probably wouldn’t be able to do this all at once. You’ll have to work on it every day.

Do not undervalue keeping a high mindset when you trade. You might think it sounds like a cliché because it does. New traders often skip over the reality that they will need to change their mindset.