Beginners and those early in their trading careers might benefit greatly from the information the app offers. The Forex Tutorials platform does not require registration. All functionality, including demo account trading, interactive charts, and other content like educational and training materials, are instantly available once the app is installed.
Give it a try now! Download the app and get started with a real trading platform in no time at all. The simulator allows you to access a complete history of all of your trades and other operations. Economic Calendar — never miss a beat or get caught off guard Hone your trading strategies with the economic calendar. Other apps lure beginners in by claiming to be the best option and falsely promising instant profits.
We cannot and do not guarantee any such results or any results at all. This is also commonly referred to as a direct hedge. While it can take some time to get your head around heading in the forex markets, the overarching concept is that it presents both outcomes.
That is to say, irrespective of which way the markets move, you will remain at the break-even point less some trading commissions. More specifically, the spot trade is a spot transaction, with reference to the sale or the purchase of a currency. Essentially, spot forex is to both sell and buy foreign currencies. So, without having to own the asset, you can still make the most of price movements, whilst also avoiding the need to sell or buy vast amounts of currency. CFDs are also accessible in bonds, commodities , cryptocurrencies, stocks, indices and of course — forex.
With a CFD you are able to trade in price movements, cutting out the need to buy them at all. When it comes to a MetaTrader platform, traders can use bar charts, line charts and candlestick charts. You can usually toggle between the different charts, depending on your preferences, fairly easily. Candlestick Chart The first record of the now-famous candlestick chart was used in Japan during the s and proved invaluable for rice traders.
These days, this price chart is without a doubt one the most popular amongst traders all over the world. Much like the OHLC bar chart see below , candlestick charts provide low, high, open and close values for a predetermined time frame. Live forex traders love this chart due to its visual appearance and the range of price action patterns utilised.
This allows you to gain a better understanding of how live trading works before you take any big financial risks in the market. As the title suggests, this one is a bar chart, and each time frame a trader is looking at will be displayed as a bar. In other words, if you are viewing a daily chart you will see that every bar equates to a full trading day.
The highest market price traded within the selected timeframe will be represented by the high of the bar. The lowest market price traded within the selected time frame is represented by the low of the bar. The dash on the right will represent the closing price, and the dash on the left will be the opening price.
The red bars are also called seller bars; this is due to the fact the closing price is less than the opening price. The green bars are also referred to as buyer bars; opposite to above. This is because the opening price is lower than the closing price. With this price chart, traders are able to establish who is controlling the market, whether it be sellers or buyers.
OHLC analysis was the starting block for the creation of the ever-popular candlestick charts please further down. It is a great tool for looking at the bigger picture when it comes to trends. The line chart arranges the close prices at the end of that time frame; so in this case, at the end of the day, the line will connect the closing price of that day. Forex — How to Trade In this section of our forex trading PDF, we are going to talk about the different ways in which you can sell and buy a forex position as well as things to look out for.
Ask price: This is the price you are able to buy currency at When it comes to forex trading you can trade both short and long, but always make sure you have a good understanding of forex trading before embarking on trades. After all, forex trading can be a bit complex to begin with, especially when mixing long and short trades. Long Trade Buy In a nutshell, going long is usually a term used for buying. So, when traders expect the price of an asset to rise, they will go long.
Short Trade Sell When forex traders expect the price of an asset to fall, they will go short. This means benefiting from buying at a lesser value. To achieve this, you simply need to place a sell order. Current Prices and Demand The current exchange rate of a forex pair is always based on market forces.
This will change on a second-by-second basis. As we noted earlier, you also need to take the spread into account, so there will always be a slight variation in pricing. For instance, if you exchange 1 USD for 17 ZAR, the sale and purchase price offered by your forex broker will be either side of that figure. The currency pairs with the most notable supply and demand attached to them will be considered the most liquid in the forex market. The supply and demand aspect is thanks to the investment of importers, exporters, banks and traders — to name a few.
The most liquid currency pairs are therefore the ones in high demand. Forex Trading System to Consider When you feel you are ready to take the plunge and begin live trading, you need to select a forex trading system. There is a vast amount of trading strategies for you to pick from. This is because investors, speculators, corporations and banks have been trading for decades. In this part of the forex trading PDF, we are going to explain a few of the strategies available to you.
Intraday Trade: Concentrating on 1-hour or 4-hour price trends, forex intraday trading is considered more of a conservative way of trading. Focusing on the leading sessions for each individual market, these trades remain open for anywhere between 1 and 4 hours. As such, this could make it a suitable option for beginners. Currency Scalping : This particular strategy is often viewed as a low-risk form of trading. It is focused on selling and buying currency pairs within an extremely short time frame.
This is usually anywhere between a matter of seconds, and 2 to 3 hours at the most. This strategy makes it very practical to potentially gain a number of smaller profits, with the hope of creating a stockpile of profits. Swing Trading : Often referred to as a medium-term approach, unlike scalping and intraday, swing trading concentrates on bigger price movements. With this strategy, traders are able to leave their trade open for days or even weeks.
Some traders like to use this option in order to embellish existing daily trades. Trading Platforms — Explained If you want to buy and sell currency pairs from the comfort of your home or even via your mobile device , you will need to use a trading platform. Otherwise referred to as a forex broker, there are literally hundreds of trading platforms active in the online space.
This makes it extremely difficult to know which broker to sign up with. In the below sections of our forex trading PDF, we explain some of the considerations that you need to make. Analysis Tools and Features You should also look out for analysis tools available to you. In some cases, this might be embedded, while some offer tools such as technical analysis and fundamental analysis.
This is because it will save you a lot of leg work having to move between different sites and sources of information. Crucially, both MT4 and MT5 are fast and receptive trading platforms, both providing live market data and access to sophisticated charts. Confidence in Your Forex Broker It is essential before you begin trading seriously that you fully trust the trading platform you intend on using. This is especially the case if you intend on using a scalping strategy, for example.
However, if you like to trade, it is vital for your peace of mind and your finances that you are fully confident with the fast execution of data transfer. This is also the case with the precision of quoted prices, and the speed of order processing. All of these things are going to help you to have a successful forex trading experience.
To enable you to make the most of new opportunities, the ideal forex broker will be available to you 24 hours a day and 7 days a week, in line with the forex market opening hours. Independent Account Manager To save you from having to request that your broker takes action for you, your forex broker should enable you to manage your account and your trades separately.
By doing this, you will be in a much better position to quickly react to any shifts in the market, and hopefully, make the most of potential opportunities. This will enable you to gain better control over any open positions as and when they arise.
Safety and Security It is important to ensure that your forex broker of choice is a reputable company, who will ensure that your personal information and trading funds are fully protected and backed up. Segregation is frequently used amongst forex brokers as a way to separate your funds from the funds of the company i.
So, no matter what happens to the forex broker, your money is safe and segregated. If you find that a forex broker is unable to do this, we would suggest you find a better broker as it is standard practice these days. All of the brokers listed towards the end of this forex trading PDF are regulated by at least one reputable licensing body. Forex Trading — Getting Started In terms of getting set up as an online forex trader, the steps remain constant regardless of which broker you decide to join.
Below we list some of the steps that you will need to take. Step 1: Open an Account In order to open an account, you will need to enter some personal information. Standard details requested by the broker will be things like your name, residential address, and contact details. Some brokers will also require your tax status and will ask you to provide more financial details such as employment status, net worth and any regular income.
In this instance, you will usually need to answer some multiple-choice questions based on your experience. This is usually a fairly simple process. Some brokers will verify this using scanned copies of documentation. Step 4: Depositing Funds Now you need to select your payment method of choice usually from a drop-down list. Bear in mind that how long this takes to go into your trading account will largely depend on the payment method — so always check this before parting with your cash.
Some brokers even support e-wallets like PayPal and Skrill. Step 5: Begin Trading After reading our forex trading PDF you should now be feeling confident enough to begin trading. However, we do recommend that you always try out a free forex trading demo first. This will allow you to test out your newly formed trading strategies before risking your own capital.
Forex Trading Strategies In the next section of our forex trading PDF, we explore some of the more important technical indicators and market insights used by seasoned traders. Donchian Channels First invented by Richard Donchian, the donchian channels can be adapted as you like, in terms of parameters. Should you choose to view a day breakdown, for example, the indicator will be created by taking the lowest low, and the highest high of that period so in this example 30 periods.
When observing the moving average on a donchian channel you can look at averages stretching from 25 days to the last days. The direction which is permitted is determined by the direction of the short-term moving average. With this in mind, you should think about opening one of the following two positions: Long — If the last day moving average is lower than the day moving average. Short — If the last day moving average is greater than the day moving average. You will need to sell your pair in order to exit your trade if you open a long position and visa-versa.
Simple Moving Average This is another commonly used forex indicator. The simple moving average aka SMA operates at a slower rate than the present market price known as a lagging indicator.
Each trend alternates between impulse and consolidation moves, so the correction following the high is to be expected. The situation turns interesting when the price resumes its trend and reaches the high again. Instead of breaking through and putting in another higher high, the buying pressure evaporates and the price is unable to surpass its previous high.
As you might know, uptrends are characterized by higher highs and higher lows. When the price fails to break above the prior high, it breaks the pattern of an uptrend and signals possible weakness. Perhaps it will take a bit more time for buyers to attain a new high or perhaps sellers are about to take control.
You can assume that sellers are strong enough to reverse the trend or at least drive the market into an extended consolidation. Both cases can be a good set-up for a short trade. The double top pattern is completed when the neckline breaks. Traders often set a profit target by measuring the distance between the neckline and the high of the pattern and projecting it to the neckline break.
Do not copy without permission. Double Bottom The double bottom is the mirror image of the double top. How to read the pattern: When the price reaches a new low, it shows conviction behind the downtrend. As we have pointed out, trends consist of impulse and consolidation moves. The situation turns interesting when the price resumes its trend and reaches the low again. This is problematic because the downtrend should follow the pattern of lower highs and lower lows.
When the price fails to break below the prior low, it signals a possible issue with the trend. That said, this is not yet a buy signal. Now you can assume that buyers are strong enough to reverse the trend or at least drive the market into an extended consolidation. In both cases, you can favor a long trade. The double bottom pattern is completed when the neckline breaks. Traders often set a profit target by measuring the distance between the neckline and the low of the pattern and projecting it to the neckline break.
Take a look at this guide Head and Shoulders The head and shoulders pattern is a fairly complex formation consisting of three peaks, with the center peak being the highest of the three. This forms the left shoulder.
From the low point of the left shoulder, the bullish advance continues and significantly surpasses the previous high. After some time, the price reaches a new peak and now enters a more prolonged consolidation. This forms the head. A final advance from the low of the head starts but it quickly fails, and the market turns down. This forms the right shoulder.
The right shoulder is lower than the head and roughly in line with the left shoulder. The pattern is completed when the price breaks below the neckline, which is the line connecting the low of the shoulders. The neckline can slope in any direction and is a good predictor of the severity of the price decline. You can project the height of the pattern to the neckline break and set your profit target accordingly. An example of a successful head and shoulder set-up is shown below: For a beginner trader, the head and shoulders pattern might be more difficult to recognize.
You can always zoom out a bit from the price action or switch to a line chart. Inverse Head and Shoulders The inverse head and shoulders pattern is the bearish equivalent of the head and shoulders. It can be found at the bottom of downtrends and indicates a bearish-to-bullish trend reversal.
How to read the pattern: Following a falling market, the price bumps into a bottom and then rises to form the left shoulder. From the high of the left shoulder, a bearish decline starts. It progresses significantly below the previous low to form the head of the pattern.
Then the price begins to rise again. A final decline from the high of the head starts to form the right shoulder. This trough is higher than the head and about equal to the bottom of the left shoulder. From the bottom of the right shoulder, the price starts to rise again. Once it breaks above the connected high points of the pullbacks neckline , the pattern is complete. Below are an example of a winning inverse head and shoulder set-up: We have a separate guide on Head and Shoulders patterns that you can access via this link if you want to learn more about them.
Rising Wedge The rising wedge pattern forms when the market makes higher highs and higher lows within a shrinking range that slopes upward. This pattern is trickier than those we have discussed so far because its signal depends on the trend. That is, a rising wedge in an uptrend signals reversal while a rising wedge in a downtrend signals continuation.
The price makes higher highs and higher lows, which fulfills the characteristics of a healthy uptrend. The reason the rising wedge acts as a reversal signal despite being indicative of a strong trend is the extent of the price increase. If you take a closer look at the pattern, you will notice that the lower trendline rises at a steeper angle. While the market keeps reaching higher highs, the subsequent consolidations are shorter and shorter.
This happens when investors are so enthusiastic that every time the market dips, they rush to buy and immediately bid up the price. Unfortunately, this can go on for only so long before the interest dries up and the market collapses. Every trend has a point where everybody who wanted to buy has already bought. This is when short-selling intensifies and the market begins ticking down. Thus, people cash out on their long positions, which further fuels the downward pressure.
The rising wedge marks this turning point and allows you to position yourself accordingly. The example below will illustrate: How to read the pattern in a downtrend : The rising wedge in a downtrend is created by the same overconfident buyers, except that this time the market is in a downtrend. Each time the market begins consolidating after a drop, traders are speculating on a reversal.
If these traders are in the majority, the market can indeed reverse. The reason for this is fairly simple. There is no reason to risk getting stopped out by the imminent correction. It makes more sense to wait until the correction occurs and enter at a better price. When enough traders think this way, the selling pressure will ease, allowing buyers to bid up the price. When buyers finally run out of steam, however, all the traders sitting on the sidelines will flock to the market with their shorts.
This is why the rising wedge suggests continuation in a downtrend. It marks the point where the bull run fails, and sellers force the market back into trend. Here is an example: Falling Wedge The falling wedge pattern forms when the market makes lower highs and lower lows within a shrinking range that slants downward. As the price moves to the downside, the two trendlines that connect the highs and the lows will eventually converge.
This suggests continuation if the trend is up, or reversal if the trend is down. How to read the pattern in an uptrend : Often, after a new high is reached, the market will enter a period of consolidation. The falling wedge forms when this temporary decrease happens in a rather aggressive manner but loses its momentum before it threatens the trend.
When people see that the consolidation is about to end, they begin buying at the discounted price, which results in the quick price jump at the end of the pattern AKA the breakout. The following example will help you spot a falling wedge in an uptrend: How to read the pattern in a downtrend : A falling wedge in a downtrend occurs after a severe price drop.
It signals an intensifying buying pressure, which is not surprising, as the price at this point is heavily depressed. When the supply finally dries up, invigorated buyers lift the price, providing you with a chance to catch a market reversal. We prepared an example so that you can familiarize yourself with the downtrend falling wedge. Go to this ultimate guide to learn even more about trading wedges, including strategies for different trading styles.
It forms when the price quickly shoots up and then begins consolidating. The advance is expected to continue after the consolidation. How to read the pattern: The first part of the pattern is the flagpole, which is a huge advance that breaks through a previous resistance level. This huge advance is usually triggered by a news event. Following the advance, the price goes through a consolidation phase that looks like a flag — hence, the name of the pattern.
The flag consists of two parallel trendlines that point slightly down and retraces a small portion of the trend. Note that if the retracement is too substantial, the flag is invalidated, as a reversal becomes increasingly likely.
When the price breaks out from the flag to the upside, the pattern is finished. This indicates that the market is about to make another impulse move in the trend direction. It forms when the price tumbles and then embarks on a modest rise. The selloff is expected to continue after the consolidation. How to read the pattern: A bearish flag pattern has the same components as its bullish counterpart.
However, everything points in the opposite direction. The market experiences a negative surprise shock, which results in a sharp decline. This is the flagpole. Following this decline, the price goes through a consolidation phase consisting of two parallel trendlines that point slightly upward. This is the flag itself.
The flag must retrace only a small portion of the trend, as an extended consolidation might lead to a reversal. The pattern is finished when the price breaks out from the flag to the downside. An example of the bearish flag: Warning: Flag patterns can be quite dangerous due to the heightened volatility.
Plus, they tend to be paired with unfavorable market conditions: slippage and wide spreads. Be very cautious if you decide to trade them. In this case, our dedicated flag pattern guide is the ideal place to advance your knowledge. Bullish Pennant The bullish pennant looks like a short triangle bounded by two converging trend lines. It occurs in advancing markets and hints at a price move in the direction of the prior trend leg. How to read the pattern: Pennants are pretty similar to flags in their structure.
They, too, are preceded by a strong upward move resembling a flagpole. After the upward move, buyers pause to catch their breath and the market begins consolidating. This is where the difference lies between the two patterns. In the case of bullish pennants, the consolidation phase shows a less intensive effort to reverse the trend. Remember that flags usually form in high-volatility situations such as news releases.
Traders often overreact to positive news; thus, the price jump is quickly met with aggressive short selling. The great thing with pennants — at least from our experience — is that you can often catch the breakout from the pattern. This is because, from the higher chart perspective, the pennant is often a simple impulse move toward the trend.
Unfortunately, the drawback is that trading pennants can be quite frustrating. When you trade flags, you will be less likely to catch the breakout. That said, if you do catch it, you can often capture the entire rally that comes. At the end of the day, trade the patterns that you feel most comfortable with. An example of the bullish pennant: Bearish Pennant The bearish pennant is also characterized by a triangle-like appearance and two converging trend lines.
However, unlike its bullish version, it occurs in declining markets and suggests further weakness. How to read the pattern: The discussion of the bullish pennant also applies to the bearish version. After a sharp decrease, the price moves sideways in a narrowing price range resembling a triangular flag. When the price breaks out to the downside, you can expect the continuation of the trend. The bearish flag, for instance, has a more intense consolidation where buyers substantially push up the price.
When looking at the bearish pennant, you can feel the accumulating selling pressure. An example: Thinking about trading pennants? Ascending Triangle The ascending triangle is a bullish formation consisting of a horizontal top and an up-sloping bottom.
It forms when the uptrend is struggling with resistance but eventually breaks through, suggesting continuation. How to read the pattern: From time to time, each uptrend reaches an area where the selling pressure overcomes demand.
Perhaps the price is near the yearly high and traders begin taking profits. Or perhaps a large hedge fund decided to reduce its holdings. For whatever reason, the price bumps into resistance and starts declining. The decline is quickly met by increased demand as buyers view the lower price as a steal.
The renewed buying pressure reverses the decline, and the price climbs back to the same level. At this higher price, however, more traders become willing to sell, forcing it down again. This situation repeats itself for some time. You might notice that each fall stops at a higher low.
Buyers gain more control as the price runs up to the resistance level and, eventually, a breakout occurs. This is expected to be followed by a significant increase in price. Ascending triangle set-ups occur frequently. An example is shown below: Descending Triangle The descending triangle is just the bearish equivalent of the ascending triangle. Technical analysis trading focuses on charts and graphs and how the different price movements on these charts play out. Understanding these charts and graphs will help you evaluate securities or Forex pairs and other markets and forecast the future by analyzing statistics and the price action.
Technical analysis traders have a core assumption that the price is always correct. Technical analysis traders are not looking at what could happen with the fundamentals because they believe that all known possible fundamental information is already factored into the current price. Some of the most popular technical analysis strategies include using raw price action, indicators such as moving averages and the MACD, and other strategies such as swing and trend trading.
Technical Analysis vs Fundamental Analysis Most traders who are investing over the longer term are using fundamentals. This means that they are looking at and evaluating the overall value of a stock, Forex pair, or other markets. These investors are taking into account everything from potential upcoming announcements, balance sheets, and what the potential future value could be. Technical analysis, on the other hand, is not taking into account these pieces of information. A trader using technical analysis will be using their charts and other statistics to make their trades.
The information the technical analysis trader takes into account includes price trends, indicator information, and a range of different chart patterns that could help them find where the price is moving next. Getting Started in Technical Analysis Getting started with technical analysis trading is very easy.
Whilst it is easy, that does not mean there is not a lot to learn and that you will be constantly be testing and perfecting new methods. The best way to get started is to get a free set of demo trading charts and beginning to practice some simple technical analysis strategies in a no-risk environment. With a demo account, you can practice your technical analysis without risking any real money and start to use more advanced strategies like the ones we go through below.
Mastering Technical Analysis There is a lot to master when it comes to becoming a technical analysis trader. You can choose to use just raw price action, a combination of price action and indicators, or a range of different strategies altogether. No matter what strategy you decide to use, you will need to keep some things in mind that include; You will need to have a solid risk to reward ratio trading strategy. You will need a strategy that can handle losses and make money overall.
You will need a strict rule set that is easy to follow and replicate. You will need to track your trading and constantly improve as the markets change. One of the hardest parts of trading technical analysis is that it can be hard to develop a clear rule set for making your trades. This is crucial, so you begin to create consistent and repeatable results in your trading.
One way you can do this is with a clear trading plan.
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