This free Forex mini-course is designed to teach you the basics of the Forex market and Forex trading in a non-boring way. I know you can find this information elsewhere on the web, but let’s face it; most of it is scattered and pretty dry to read. I will try to make this tutorial as fun as possible so that you can learn about Forex trading and have a good time doing it.
Day trading can take place in any market, but is commonly referred to in the context of either the Forex trading market or the stock trading market. In order to be successful as a Forex day trader, you need to have a decent amount of capital, and a good amount of knowledge of the market behind you. However, having this doesn't necessarily guarantee success. This is especially true when 'invisible hands' are at work, and when the prices fluctuate enormously during intraday Forex trading.
Trader's also have the ability to trade risk-free with a demo trading account. This means that traders can avoid putting their capital at risk, and they can choose when they wish to move to the live markets. For instance, Admiral Markets' demo trading account enables traders to gain access to the latest real-time market data, the ability to trade with virtual currency, and access to the latest trading insights from expert traders.
Similarly, if you wanted to purchase 3,000 USD with Euros, that would cost 2,570 EUR. With a leverage rate of 1:30, however, you could access 3,000 USD worth of the EUR/USD currency pair as a CFD with just 100 USD. The best part, however, is that the size of the potential profit a trader could make is the same as if they had invested in the asset outright. The risk here is that potential losses are magnified to the same extent as potential profits.

Forex is the one financial market that never sleeps, meaning you can trade at all hours of the day (or night). Unlike the world's stock exchanges, which are located in physical trading rooms like the New York Stock Exchange or the London Stock Exchange, the Forex market is known as an 'Over-the-counter market' (or OTC). This means that the trades take place directly between the parties holding the currencies, rather than being managed via an exchange.
Define your investment level: One of the most common questions about trading Forex is 'how much do I need to start trading?' For beginner traders, it's a good idea to start small and work your way up. Fortunately, many Forex brokers have reasonable minimum deposit levels for opening an account. At Admiral Markets for example, the minimum deposit amount is $200. Be wary of any brokers offering bonuses for certain deposit levels, as these might be scams, where it is very difficult to withdraw your money in the future.
Day trading also deserves some extra attention in this area and a daily risk maximum should also be implemented. This daily risk maximum can be 1% (or less) of capital, or equivalent to the average daily profit over a 30 day period. For example, a trader with a $50,000 account (leverage not included) could lose a maximum of $500 per day under these risk parameters. Alternatively, this number could be altered so it is more in line with the average daily gain (i.e., if a trader makes $100 on positive days, they keeps their losses close to $100 or less).
During the 1920s, the Kleinwort family were known as the leaders of the foreign exchange market, while Japheth, Montagu & Co. and Seligman still warrant recognition as significant FX traders.[27] The trade in London began to resemble its modern manifestation. By 1928, Forex trade was integral to the financial functioning of the city. Continental exchange controls, plus other factors in Europe and Latin America, hampered any attempt at wholesale prosperity from trade[clarification needed] for those of 1930s London.[28]
Define your investment level: One of the most common questions about trading Forex is 'how much do I need to start trading?' For beginner traders, it's a good idea to start small and work your way up. Fortunately, many Forex brokers have reasonable minimum deposit levels for opening an account. At Admiral Markets for example, the minimum deposit amount is $200. Be wary of any brokers offering bonuses for certain deposit levels, as these might be scams, where it is very difficult to withdraw your money in the future.

Scalping is a higher frequency form of trading, wherein traders focus on lower time frames, trying to profit from the market's volatility. Very often, traders make 15-30 scalps per day, whereas the profit is usually between 5-15 pips. The risk with scalping is usually 2-5% per trade, but bear in mind that if you cross 5% of your risk threshold, your account will be in a danger zone.
This is quite a nice strategy for traders that have a lot of time at their disposal. Trading breakouts can be a great day trading strategy too. With this strategy you are patiently waiting for big market moves, usually caused by the various changes in the relevant country's economies. Such changes are delivered either unexpectedly or via expected news releases. During breakout trading, a trader opens a position in the forecasted direction, and waits for the currency pair to escalate (or slump) by a large amount of pips.
Unlike stocks, forex trades have low, if any, commissions and fees. Even so, new forex traders are always advised to take a conservative approach and use orders, like stop-loss, to minimize losses. High leverage, which should be prudently applied, gives traders the opportunity to achieve dramatic results with far less capital than necessary for other markets. Forex trading requires training and strategy, but can be a profitable field for individuals looking for a lower risk endeavor. Learning currency trading gives traders a range of exciting new opportunities to invest in.
Spread: The spread is the difference between a currency pair's bid and ask price. For the most popular currency pairs, the spread is often low - sometimes even less than a pip! For pairs that aren't traded as frequently, the spread tends to be much higher. Before a Forex trade becomes profitable, the value of the currency pair must cross the spread.
Leverage: Leverage is capital provided by a Forex broker to bolster their client's trading volume. For example, if you use a 1:10 rate of leverage and have $1,000 in your trading account, you can trade $10,000 worth of a currency pair. If the trade is successful, leverage will maximise your profits by a factor of 10. However, please note that leverage also multiplies your losses to the same degree, so it should be used with caution. If your account balance falls below $0, you may trigger a broker's negative balance protection settings (if trading with an ESMA regulated broker), which will result in the trade being closed. Fortunately, this means that your balance cannot move below $0, so you will not be in debt to the broker.
Another important point for day trading is to choose a good Forex broker. The main attribute here is the spread and the commissions you have to pay. As a rule, a day trader executes a few transactions every day, and the cheaper this is for you, the more benefits you can get from day trading. Before choosing a brokerage firm, research their offers and track all of the possible expenses associated with day trading.
While searching for the cheapest Forex broker, it really comes down to a combination of spreads, execution quality, commission, and the minimum deposit. These should be the last points you consider when opening a long-term trading account. The best Forex broker for beginners depends on elements like the trading system, the quote feed, instrument portfolios, execution models, and the leverage offered.

When it comes to averaging down, traders must not add to positions, but rather sell losers quickly with a pre-planned exit strategy. Additionally, traders should sit back and watch news announcements until their resulting volatility has subsided. Risk must also be kept in check at all times, with no single trade or day losing more than what can be easily made back on another.
Wave analysis, also known as Elliott Wave analysis, is a well-known method that analyses the price chart for patterns and the direction (trend) of a financial instrument. The method is based on historical movements in market prices, with the belief that history repeats itself. The reason for this is due to market sentiment, meaning that the market as a whole moves as a herd, and reacts in a similar way to similar events and announcements.
The mere expectation or rumor of a central bank foreign exchange intervention might be enough to stabilize the currency. However, aggressive intervention might be used several times each year in countries with a dirty float currency regime. Central banks do not always achieve their objectives. The combined resources of the market can easily overwhelm any central bank.[62] Several scenarios of this nature were seen in the 1992–93 European Exchange Rate Mechanism collapse, and in more recent times in Asia.
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By contrast, the AUD/NZD moves by 50-60 pips a day, and the USDHKD currency pair only moves by an average of 32 pips a day (when looking at the value of currency pairs, most will be listed with five decimal points. A 'Pip' is 0.0001. So, if the EUR/USD moved from 1.16667 to 1.16677, that would represent a 1 pip change). The major Forex pairs tend to be the most liquid, and therefore provide the most opportunities for short-term trading.

International parity conditions: Relative purchasing power parity, interest rate parity, Domestic Fisher effect, International Fisher effect. Though to some extent the above theories provide logical explanation for the fluctuations in exchange rates, yet these theories falter as they are based on challengeable assumptions [e.g., free flow of goods, services and capital] which seldom hold true in the real world.


The foreign exchange market is an over-the-counter (OTC) marketplace that determines the exchange rate for global currencies. Participants are able to buy, sell, exchange and speculate on currencies. Foreign exchange markets are made up of banks, forex dealers, commercial companies, central banks, investment management firms, hedge funds, retail forex dealers and investors.
The foreign exchange market – also called forex, FX, or currency market – was one of the original financial markets formed to bring structure to the burgeoning global economy. In terms of trading volume it is, by far, the largest financial market in the world. Aside from providing a venue for the buying, selling, exchanging and speculation of currencies, the forex market also enables currency conversion for international trade settlements and investments. According to the Bank for International Settlements (BIS), which is owned by central banks, trading in foreign exchange markets averaged $5.1 trillion per day in April 2016.
Spread: The spread is the difference between a currency pair's bid and ask price. For the most popular currency pairs, the spread is often low - sometimes even less than a pip! For pairs that aren't traded as frequently, the spread tends to be much higher. Before a Forex trade becomes profitable, the value of the currency pair must cross the spread.

Spread: The spread is the difference between a currency pair's bid and ask price. For the most popular currency pairs, the spread is often low - sometimes even less than a pip! For pairs that aren't traded as frequently, the spread tends to be much higher. Before a Forex trade becomes profitable, the value of the currency pair must cross the spread.
Forex is a portmanteau of foreign currency and exchange. Foreign exchange is the process of changing one currency into another currency for a variety of reasons, usually for commerce, trading, or tourism. According to a recent triennial report from the Bank for International Settlements (a global bank for national central banks), the average was more than $5.1 trillion in daily forex trading volume.
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