Forex Trading: The Basics Explained in Simple Terms (Bonus ...

[Pages:62]Forex Trading The Basics

Explained in Simple Terms

Plus FREE Bonus Trading System

Copyright 2015 by James Brown - All rights reserved

This book is geared towards providing information in regards to the topic and issue covered. The publication is sold with the idea that the publisher is not required to render accounting, officially permitted, or otherwise, qualified services. If advice is necessary, legal or professional, a practiced individual in the profession should be ordered.

From a Declaration of Principles which was accepted and approved equally by a Committee of the American Bar Association and a Committee of Publishers and Associations. In no way is it legal to reproduce, duplicate, or transmit any part of this document in either electronic means or in printed format. Recording of this publication is strictly prohibited and any storage of this document is not allowed unless with written permission from the publisher. All rights reserved.

Respective authors own all copyrights not held by the publisher. The trademarks that are used are without any consent, and the publication of the trademark is without permission or backing by the trademark owner. All trademarks and brands within this book are for clarifying purposes only and are the owned by the owners themselves, not affiliated with this document.

Disclaimer

This book is designed to provide information that the author believes to be accurate on the subject matter it covers, but it is sold with the understanding that neither the author nor the publisher is offering individualized advice tailored to any specific portfolio or to any individual's particular needs, or rendering investment advice or other professional services such as legal accounting advice. Professional services should be sought if one needs expert assistance in areas that include investment, legal, and accounting advice.

There is a substantial risk of loss associated with trading these markets. Losses can and will occur. No system or methodology has ever been developed that can guarantee profits or ensure freedom from losses. No representation or implication is being made that using this information will generate profits or ensure freedom from losses. The trade examples provided were hypothetical only and were prepared with the benefit of hindsight. No hypothetical trading record can completely account for the impact of financial risk in actual live trading. Additionally, this book is not intended to serve as the basis for any financial decisions, as a recommendation of a specific trading system. Your personal financial circumstances must be considered carefully before investing or spending money.

No warranty is made with respect to the accuracy or completeness of the information contained herein, and both the author and the publisher specifically disclaim any responsibility for any liability, loss or risk, personal or otherwise, which is incurred as a consequence, directly or indirectly, of the use and application of any of the contents of this book and the bonus system.

Introduction

I hope you find this book useful to gain an understanding of the basics of forex trading and with this information; you become a successful trader in your own right. My knowledge of currency trading extends over a 14 year period and has evolved from the old fashioned manual charting when I first started in 2002, to trading on multiple screens and entering the arena of automated trading. During this time, I have developed and shared many trading systems for free, and I have also assisted many new Traders through my various blogs and forum participation. This book is for those of you who are just starting to consider trading Forex but don't know where to start, given the abundance of information on the internet. It is THE first book to read to have an understanding of the very basics.

I have deliberately kept the explanations quite simple and straightforward so everyone can understand it.

Best regards

Jim

Contents

Chapter 1 Welcome to the World of Forex Trading What is Forex? Why Forex? Advantages to Trading Forex When is the Forex Market Open?

Chapter 2 What Do We Trade in the Forex Market? Forex Pairs - What do the Numbers Mean? Where do we Trade Forex? What About Choosing a Broker?

Chapter 3 How Do You Actually Trade Forex? Important Information for US based Traders Lot Size and Equivalent Pip Value Information on Risk

Chapter 4 Fundamental or Technical Analysis? News and Fundamental Analysis Technical Analysis

Chapter 5 Further Information on Forex Specifics Risk-Reward Ratio Types of Orders How Many Pips is Enough?

Chapter 6 Trading Psychology Trading Psychology

Chapter 7 Time to Trade Day Trading or Longer Term Trading? Keeping a Journal or Diary

Chapter 8 Conclusion

Bonus Trading System Introduction Template and Custom Indicators My Thoughts on Trading Entry Signals Trade Management Conclusion

Recommended Reading Recommended Forums

Chapter 1

Welcome to the World of Forex Trading

So you have heard about Forex Trading and you are now curious to check it out, but really don't know where to start.

Well you have come to the right place, as this book will take you through the basics, explain Forex in a plain and simple manner and give you enough information to get started sooner rather than later, in the exciting world of Forex Trading.

What is Forex?

Forex is the common term used to describe Foreign Exchange. It is also called currency trading, or just FX trading, and every now and then you may see it referred to as Spot FX.

It is essentially the trading of the world's various currencies. Trading currencies is a little different to trading shares or stocks, as currencies are traded against each other. What I mean by this is that you are comparing one country's currency to another country's currency. It is not as confusing as it sounds, so bear with me.

Why would I want to trade Forex?

Good question! Most people have heard about trading stocks, maybe even futures and options. They have been around for years and your grandparents may have even traded them. But I guarantee you that they wouldn't have traded Forex, unless they were exceptionally wealthy individuals or worked for a major bank.

It is only in the last 15 or so years that the retail Forex industry has opened up to the likes of you and I, where you can start trading with a very small deposit into a brokerage account. Obviously the popularity of the internet has helped create this boom as about 99.9% of all transactions are carried out online.

Why Forex?

For a start, it is by far the most liquid market in the world that runs 24hrs a day for 5 1/2 days of the week. Just to give you an idea of what I mean, in early 2014 and according to the Bank for International Settlements, Forex trading increased to an average of $5.3 trillion dollars a day. To put this in perspective, this averages out to be $220 billion per hour. In fact, it would take 30 days of trading on the New York Stock Exchange to equal one day of Forex trading.

These figures are huge! There is no other way to put it. But obviously that doesn't really affect the average trader other than giving that trader very good liquidity,

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