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Forex Trading Guide v2.0 -Online Foreign Exchange Traders


Published on

“Making Money by Trading the Foreign Exchange Currencies”
-For Beginners and Semi-Advanced Currency Traders

-1- What is Forex all about?
-2- Categories of Forex Brokers
-3- Why People Trade Forex?
-4- Forex Bonus
-5- Forex Rebates
-6- Forex Trading Styles
-7- Forex Signals & Expert Advisors
-8- Forex Trading Resources
-9- Forex Glossary

By (c)
Author: George Protonotarios
May 2014

Published in: Economy & Finance, Business
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Forex Trading Guide v2.0 -Online Foreign Exchange Traders

  1. 1. ..QQeexxppeerrtt..ccoomm FFOORREEXX TTRRAADDIINNGG GGUUIIDDEE VV..22..00 BBEEGGIINNNNEERRSS && SSEEMMII--AADDVVAANNCCEEDD FFOORREEXX TTRRAADDEERRSS FFoorreeiiggnn EExxcchhaannggee TTrraaddiinngg GGuuiiddee ““MMaakkiinngg MMoonneeyy bbyy TTrraaddiinngg FFoorreexx CCuurrrreenncciieess”” FFoorreexx TTrraaddiinngg GGuuiiddee vv22..00 --CCooppyyrriigghhtt ©© MMaayy 22001144 George Protonotarios ©©--AAllll rriigghhttss rreesseerrvveedd wwoorrllddwwiiddee DDiissttrriibbuuttiioonn bbyy QQeexxppeerrtt..ccoomm wwwwww..QQeexxppeerrtt..ccoomm
  2. 2. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 2 / 50 FFOORREEXX TTRRAADDIINNGG GGUUIIDDEE vv..22..00 ““MMaakkiinngg MMoonneeyy bbyy TTrraaddiinngg FFoorreexx CCuurrrreenncciieess”” TThhee BBaassiiccss ffoorr BBeeggiinnnneerrss aanndd SSeemmii--AAddvvaanncceedd TTrraaddeerrss --TTAABBLLEE OOFF CCOONNTTEENNTTSS-- 11.. WWhhaatt iiss FFoorreexx aallll aabboouutt?? .............................................................................................. 22.. TTwwoo CCaatteeggoorriieess ooff FFoorreexx BBrrookkeerrss............................................................ 33.. WWhhyy ssoo mmaannyy PPeeooppllee TTrraaddee FFoorreexx?? .................................................. 44.. FFoorreexx BBoonnuuss PPrroommoottiioonnss................................................................................................ 55.. FFoorreexx TTrraaddiinngg RReebbaatteess........................................................................................................ 66.. SSiixx DDiiffffeerreenntt FFoorreexx TTrraaddiinngg SSttyylleess........................................................ 77.. LLiivvee TTrraaddiinngg SSiiggnnaallss && FFoorreexx RRoobboottss.............................................. 88.. UUsseeffuull FFoorreexx TTrraaddiinngg RReessoouurrcceess.................................................................. 99.. FFoorreexx GGlloossssaarryy……………………………………………………………………………………………………..
  3. 3. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 3 / 50 1. What is Forex all about? What is Forex: Forex means FOReign EXchange and it is a global market where the world’s currencies are traded, one currency against another. Central Banks, Commercial Banks, Large and Small Corporations, Institutional Investors, Individual Traders and Common Tourists occasionally need to exchange one currency for another. Examples: Take for example an importer who is based in the US and wants to import 5 Mercedes Trucks from Germany. He must exchange US Dollars for the European Currency (EUR) in order to pay for his import, so he must make a transaction in the Forex Market. ■ Importer Buys EUR and sells USD In the opposite example, a tourist from Germany wants to visit New York so in order to pay for his hotel he must exchange Euros for US Dollars. This transaction will also be made in the Forex market. ■ Tourist Buys USD and sells EUR Forex Currency Pairs & Main Categories Currencies are traded in pairs, you buy one and at the same time you sell another currency. In any currency pair (in the above example EURUSD) the purchased currency is called the Base Currency (EUR) and the sold currency is called the Quote Currency (USD). There are three Main Categories of Forex Currencies: i) Forex Majors (the most popular and traded pairs: EURUSD, GBPUSD, USDJPY, USDCHF, USDCAD, AUDUSD and NZDUSD) ii) Forex Minors (less popular pairs and thus more expensive to trade) iii) Forex Exotics (no-popularity and thus very expensive to trade)
  4. 4. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 4 / 50 What is a Forex Lot? A Forex Lot is the standard unit size of a Forex transaction. There are 3 different lot sizes: ■ Micro Lot Size (equals $1,000) → Suitable for Forex Beginners ■ Mini Lot Size (equals $10,000) → Suitable for Semi-Advanced Forex Traders ■ Standard Lot Size (equals $100,000) → Suitable for Advanced and Pro Traders But where is the opportunity to make money after all? Currencies are not traded in fixed prices -instead they are part of a free floating trading system. Every order for buying / selling a Forex currency is a factor creating either demand or supply in the market. Even tiny fluctuations in this free-floating system can be transformed into huge profits using the ability of trading leverage (as it will be described afterwards in Chapter-3). Where is the Forex Market Situated? All currency transactions take place within the Forex Market. Where is Forex situated? Actually nowhere specifically, Forex operates as a non-centralized network such is the World Wide Web. All transactions are executed within the Electronic Network of Banks (called the ECN network). There are of course several physical Financial Centers around the world. These financial centers are found in major capital cities such is New York, London, Tokyo, Sydney etc. Today Foreign Exchange is by far the largest market in the world. Forex has become so huge that volumes exceed today 5 trillion USD only in a single day. Forex Market Trading Hours The Foreign Exchange market is open 24/5 between Mondays to Fridays. The Forex daily activity is divided into 4 separate sessions: (1) New York Session, 8:00 am to 5:00 pm EST (2) Tokyo Session, 7:00 pm to 4:00 am EST (3) Sydney Session, 5:00 pm to 2:00 am EST (4) London Session, 3:00 am to 12:00 noon EST
  5. 5. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 5 / 50 Forex Market Overlaps Forex overlaps occur when two of the above sessions are opened simultaneously. Here are the three Forex Session Overlaps: (i) New York and London Session Overlap: 8:00 am to 12:00 noon EST (ii) Sydney and Tokyo Session Overlap: 7:00 pm to 2:00 am EST (iii) London and Tokyo Session Overlap: 3:00 am to 4:00am EST During these overlaps, both trading activity and market liquidity are maximized. Many traders select to execute orders only during these overlaps. To highlight the importance of time when trading Forex, just think that there are automated systems trading exclusively the London and Tokyo Overlap. That means that during the other sessions remain inactive. Moreover, there are automated systems trading only as the Asian Session begins. These short-trading systems are commonly scalping the market. Many of these Scalping Systems are presented in Chapter-7. So what is Forex Scalping Then? Scalping is a promising way of trading Forex based on the assumption that you hold state-of-the-art trading technology and the right system to do the job. Scalping Forex means opening and closing trading positions lasting less than one minute and targeting returns as low as 0.001%. Those traders who scalp the market are called scalpers. This is a common trading style and you may find more trading styles at Chapter-6. Why should anyone targeting tiny returns of 0.01%? Wait until the next chapter, the chapter about trading leverage, and you will understand the reason why.
  6. 6. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 6 / 50 Online Forex Platforms What is a Forex Trading Platform? A Forex Trading platform is simply your ticket to Online Forex Trading. A Trading Platform is working like a bridge between you and your Forex Broker. When you execute a trading order (for example selling British Sterling against the US Dollar) this order is passing instantly from your platform to your broker. Then again almost instantly it is passing to the Forex Market. The fantastic thing is that almost all Forex Trading Platforms (Desktop and Mobile) are offered for free to download and to use. Freeware and open source software matters when you trade Forex. The industry’s standard platform is the MetaTrader4 platform from Metaquotes. This platform is called also MT4 and allows manual and automated trading in both desktop and mobile devices. Almost all Trading Platforms today offer features such is the use of indicators, technical analysis tools, trading on charts, 1-click-trading, news alerts etc. ■ Learn the basics about Forex Trading at the web-site » Learning Here is some basic information and download links of popular Forex Platforms: WEBTRADER FOREX PLATFORM ■ Info: The easiest-to-use category of Forex Platforms. Forex brokers provide their own Web-Traders. As the name suggest it’s 100% web-based and no software installation is required. The disadvantage of a web-trader platform is that it can not perform complicated tasks as automated trading and Expert Advisors. Moreover the variety of trading orders is usually limited to basic order types. ■ Download: Each Broker offers its own web-trader (photo: HotForex WebTrader) ■ Experience Level: Beginners and Semi-Advanced Traders
  7. 7. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 7 / 50 METATRADER-4 or MT-4 NINJA TRADER FOREX PLATFORM ■ Info: Very advanced Forex platform offering high technology and rich charting capabilities. The disadvantage here is that only a few Forex brokers support it. In general keep in mind that the wide popularity of any platform means also a lot of providers supporting it. NinjaTrader has everything except popularity. ■ Download: » Download here NinjaTrader ■ Experience Level: Advanced and Professional Traders ■ Info: MT4 is a clear Forex industry standard. Every broker that respects himself must offer MT4 or at least a MT4 bridge. This platform is essential for complicated tasks as Forex Robots (EAs). The disadvantage of MT4 is mainly found on what concerns the money management. Beginners will find it really difficult to execute the right order sizes. It is highly recommended for beginners to use MT4 in micro-lot account sizes so that they will be able to learn how to use MT4 in tiny risk. ■ Download: » Download here for free at MetaQuotes ■ Experience Level: Advanced and Professional Traders
  8. 8. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 8 / 50 cTRADER FOREX PLATFORM ■ Info: The same as NinjaTrader. cTrader offers exceptional capabilities including advanced charting, market depth etc. As concerns popularity not many Forex brokers support it but it is more popular than NinjaTrader. ■ Download: » Download cTrader here ■ Experience Level: Advanced and Professional Traders Delays on Execution -The Slippage Factor The delay between the time you press the button on your PC and the time your order is actually executed in the Forex Market is called the slippage. If we measure this delay in real time we might say that this delay is between 0.1 seconds to 1.5 seconds. Slippage is generating price manipulation and that is why it is measured in pips. One pip equals commonly 0.0001 of the value of a currency pair. The average slippage in the market today is between 1-2 pips. The Importance of Tiny Segments of Time But why should a trader even care about such a tiny delay of less than 2 seconds? Think about that. There are numerous arbitrage systems today that are trading Forex in timeframes measured in million-seconds. These systems constitute the so called ‘Million-Second Forex Market’. One (1) second for a scalping system equals 1 month for a regular trader. Furthermore if you trade the news (News-Trader) 1 second is the difference between making a huge profit and suffering a huge loss. News-Trading is one of the six trading styles presented in Chapter-6. “Time is the most disputed issue in the men’s history”
  9. 9. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 9 / 50 ■ Find full reviews and multiple comparisons regarding Scalping Forex Trading Systems at » Forex Robots and other Automated Systems
  10. 10. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 10 / 50 2. Two Categories of Forex Brokers -The Need for Reliable and Regulated Partners In order to trade Forex you need also a broker. Forex Brokers operate as intermediaries between a trader and the aggregate Forex Market (The ECN network mentioned before). Basically there are two main categories of Brokers based on their execution model, the Dealing Desk and the No-Dealing Desk Brokers. Two (2) General Categories of Forex Brokers (a) Dealing Desk Brokers (DD) or Agents or Market Makers These brokers operate as a Dealing-Desk, meaning that they are making their own market within the Forex market. In simple words, Market Makers sum all the buying and selling orders of their clients and execute trades instantly on both sides. Actually they accept all orders from opposite sides and earn money by staying in the middle, without risk. Sometimes Market Makers are trading against their clients just to fill all their orders. Professional traders don’t like the fact of trading against their brokers and that is why they are constantly avoiding Dealing Desk Brokers. Dealing Desk Brokers or Market Makers are not considered as pure Forex Brokers Dealing Desk Brokers offer usually a wide asset index including Forex, Stocks, Indices, Commodities and Energy trading. In general, Dealing-Desk Brokers are considered a good choice only for beginners and semi-advanced traders. This perception exists as Dealing-Desk Brokers offer currency pairs in wide spreads. EURUSD for example can be found usually at 2 pips minimum. Moreover Dealing- Desk Brokers provide trading with slippage and re-quotes. The only important advantage of trading with a Dealing Desk Broker is the Forex Bonus offered. Dealing- Desk Brokers offer very high welcome bonuses up to 100% (find Forex Bonus Promotions later in this eBook). ■ Tip: If you want to trade with a Market Maker, choose a broker offering withdrawable bonus. Trade your bonus as many times required and then withdraw your funds and your bonus. It is the best chance you have to win. (b) No-Dealing Desk Brokers (NDD) -ECN or STP Forex Brokers
  11. 11. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 11 / 50 In this category we find brokers that are transferring their client orders directly to the Forex Market, meaning transferring orders directly to the Electronic Network of Banks (ECN). The great advantage of trading with an ECN/STP broker is the low transactional cost and the very fast order execution. Transaction cost in Forex Trading is deriving mainly from spreads And from trading commissions charged on volume. Cost may be also the outcome of slippage. ECN/STP brokers offer by rule the lowest slippage in the market. The ECN/STP Forex brokers are the only choice of professional and advanced Forex traders and the only choice for all those wishing to trade Forex via automated- trading systems (explained in Chapter-7). Note: Not all ECN/STP brokers offer good trading terms to their clients. There are good, medium and bad performers as in every other industry. Here are two examples of an ECN/STP Broker offering EURUSD: i) EURUSD spread at 1.4 pips without any trading commissions ii) EURUSD spread at 0.4 pips plus $3.5 commission per $100,000 volume The Essence of Trading with Regulated Forex Companies Reliability is priority number one when your industry is the Online Financials. Everyone who wants to trade the world’s currencies needs a reliable Forex Broker. There are hundreds of Forex Brokers available in the market, but it is extremely important to trade only with those that are high regulated and reliable. Regulation means that a company is supervised and controlled by external independent bodies. Regulation works as a great incentive for any broker to behave ethically and respect his client’s interests. Another factor that adds reliability to a Forex Company is the existence of Segregated Client Bank Accounts. That means that when you make a deposit your funds are safely deposited in an external bank. The country where a Forex Broker is situated also matters, avoid companies situated in offshore countries. Offshore countries are providing weak legislative frameworks regarding corporations, and that is not good for any online trader. Here is a list with some High-Regulated Forex Brokers offering also segregated Bank Accounts to their Clients:
  12. 12. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 12 / 50 REGULATED FOREX BROKERS LIST (NO-US CLIENTS LIST) Here is a list of regulated Forex Brokers offering funds safety via segregated client bank accounts. FOREX BROKER REGULATED SEGREGATED BANK ACCOUNTS MINIMUM DEPOSIT WELCOME BONUS INFORMATION ■ XeMarkets STP MODEL FSA UK, CySEC Cyprus, ASIC Australia Yes $50 30% up to 10,000USD ► Review Broker » XeMarkets Web ■ HotForex ECN / STP MiFID Europe and CySEC Yes $50 30-100% ► Review Broker » HotForex Web ■ IronFx ECN / STP ASIC Australia, FCA UK, CySEC Cyprus Yes $500 50% ► Review Broker » Ironfx Web ■ AvaTrade DEALING DESK ASIC Australia and CBI Ireland Yes $100 50% up to 10,000USD ► Review Broker » Avatrade Web ■ Find Forex Brokers Ratings at
  13. 13. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 13 / 50 Forming the Profile of the Perfect Forex Broker -For the Average Trader Here are some characteristics of the Ideal Forex Broker: (i) Offering maximum safety of trading funds (high regulation and segregated client bank accounts) (ii) Offering minimal transaction cost (low spread, low commissions, no re-quotes) (iii) Offering a wide asset index containing more than 60 currency pairs (majors, minors and exotic pairs as mentioned before) (iv) Offering fast order execution with minimal delays and no price manipulation (v) Offering a good variety of trading platforms allowing mobile trading, automated trading and scalping (vi) Providing a variety of different deposit / withdrawal methods by not charging commission on withdrawals or on inactive accounts (vii) Providing fast and reliable customer service (emai, live chat and phone support) Rating Brokers Formula by -The New and Revolutionary Way of Rating Financial Services Based on recent research, most of the user ratings found in the Internet today are fake. This is happening as Online Companies pay outsiders to rate them favorably in user-rating sites. In this uncomfortable environment the Rating Formula Series was designed to provide a completely objective framework of rating financial services. The Rating Formula Series includes all the major factors forming the ideal Broker. This innovative rating formula is designed by Here are the four (4) generic rating categories forming the maximum rating value of 100%.
  14. 14. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 14 / 50 FORMULA v.4.0 TOTAL RATING (The structure of Rating Formula v4.0) WEIGHT (%) Factor-1: Safety of Funds 26.0% Rating + Factor-2: Trading Cost 28.0% Rating + Factor-3: Available Trading Options 26.0% Rating + Factor-4: Technology 20.0% Rating = 100% max Here are the First Rating Results using the Formula 4.0 at RATING ASPECTS TRADING STYLES FOREX BROKER Overall Rating Funds Safety Trading Cost Trading Options Technology Beginners Advanced Pros FULL RATING ■ XEMarkets 80.76% 81.78% 71.43% 100% 67.50% 71.63% 72.70% 68.99% ► Rating ■ LQDMarkets 83.38% 81.26% 78.57% 91.35% 82.50% 71.00% 82.21% 84.73% ► Rating ■ Alpari UK 79.40%96.74% 60.71% 85.58% 75.00% 72.51% 75.69% 75.25% ► Rating ■ HotForex 77.78% 63.59% 66.07% 97.12% 87.50% 80.64% 81.76% 78.98% ► Rating ■ AvaTrade 76.47% 84.50% 58.93% 92.31% 70.00% 70.10% 66.71% 60.42% ► Rating ■ InstaForex 65.46% 47.92% 44.64% 100% 72.50% 54.99% 62.28% 63.42% ► Rating ■ eToro 59.71% 84.46% 41.07% 54.81% 60.00% 60.44% 55.35% 49.50% ► Rating → Learn more about the Rating Formulas These are the latest versions of the Rating Formula series: ► Rating Formula v5.0 –Forex Brokers, at ► Rating Formula v4.0 –Forex Brokers, at ► Rating Formula v3.5 –Binary Options Brokers, at
  15. 15. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 15 / 50 3. Why so many People Trade in the Forex Market? –The Profit Potential Two factors are forming the great Profit Potential of Forex Trading, liquidity and trading leverage. Here is a short analysis of these two trading factors. 2.1 Forex Market Huge Liquidity and Low Cost of Transactions As it was mentioned before the Foreign Exchange Market is really huge with daily turnovers of more than 5 trillion US dollars. That means that there are tens of thousands of currency buyers and currency sellers at any given second. That enormous volume activity pushes the distance between buyers and sellers (called the spread) in minimal ranges. The average spread on EURUSD for example is less than 2 pips. That means that if the first buyer is at 1.3800 then the first seller is at 1.3802. This distance in the example given is just 0.002, or else 2 pips spread. Why is this fact so important? This is important because you can open and close a trading position with an extremely low transaction cost. (i) 2.2 Multiplying Funds via the Use of Leverage Forex trading provides the unique advantage of huge trading leverage. What does trading leverage means? Trading leverage means that you can trade more funds that you really hold. But what makes that advantage astonishing is the number of times you may leverage your funds. Most Forex Brokers today offer leverage up to 500:1. Therefore, if you open an account with $1,000 you may trade theoretically $500,000. (ii) By combining minimal transaction cost and high trading leverage {(i) and (ii)} it is obvious what makes Forex Trading so lucrative and popular in a global scale. Example: If you open a position worth $500,000 and you gain 1.0% then your earnings are calculated as: ■ Earnings Computation = $500,000 X 1.0% - Hypothetical Cost of Transaction = $5,000 - $300 = $4.700 ■ Your Initial investment was $1,000, so you gained 370% on your investment with just 1.0% currency movement Be aware that this procedure incurs high risks too, as you may win or lose money, especially if you are not familiar with this process. This example is given to highlight the profit potential and why Forex Trading attracts so many people worldwide.
  16. 16. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 16 / 50 2.3 The Leverage Formula (Semi-Advanced Traders) The rate of capital leverage defines in a high extend which trade will prove profitable and which not. When you constantly use high trading leverage you are very vulnerable to market volatility while you are forced to place your stop-loss orders really close. I created this simple equation to highlight how the trading leverage can be optimized in any trade. The following leverage formula aims to provide a simple framework for understanding the attractiveness of each individual trade and therefore choose respectively the ideal leverage ratio. Here is the formula (it is briefly explained below): ◘ Leverage Formula= [ (P/L) * (1/Spread) * (R/2) ] % Where: (P/L) = Profit to Loss Ratio (Profit derives from Take Profit and Loss from Stop Loss Orders) (Spread) = The difference between Ask and Bid Price (First Seller and First Buyer) (R) = Risk Tolerance (values 1-100, equals your overall risk acceptance as a percentage %)
  17. 17. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 17 / 50 4. Forex Welcome Bonus -Another Great Advantage of Forex Trading High Deposit Bonus and No-Deposit Bonus Forex Welcome Bonus –The Difference between a Credit Bonus and a Withdrawable Bonus Forex Brokers in order to attract new clients offer promotions that are called Forex Bonuses. A common welcome bonus is 30% but it can be up to 100%. What means 100% welcome bonus on deposit? It means that if you are a new client and you deposit 1,000USD then the broker will add you another 1,000USD in your account as an extra trading capital. There are two types of Forex welcome bonus: i) Withdrawable Bonus (usually 30% on new deposit) ii) Credit Bonus (usually 50-100% on new deposit) You may withdraw a Withdrawable Bonus by trading it several times according to the Terms & Conditions of any promotion. From the other hand, you can not withdraw a credit bonus but you may still withdraw the gaining generated by a credit bonus. Risk-Free Trading via a No-Deposit Bonus Account Additionally, Forex Brokers in order to make traders more familiar with their platforms offer also the so called No-Deposit Forex Bonuses. That means that you get a bonus amount between 20-100USD just by confirming your email or phone and without depositing any funds at all. That is an excellent risk-free way to get in touch with Forex Trading for the first time. Where is the Catch? Be aware that you may withdraw a No-Deposit Forex Bonus but you must first trade it at least 20-25 times. Anyway that is a great way to start trading without any risk.
  18. 18. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 18 / 50 NO-DEPOSIT BONUS & BROKER (1) AvaTrade offers $50 No-Deposit Bonus ► Review Broker and Information | » Claim $50 Free Bonus (2) InstaForex No Deposit Bonus ► Review Broker and Information | » InstaForex Free Bonus (3) XeMarkets offers $20 for joining the innovative Trading Contest Arena ► Review Broker and Information | » XeMarkets Free Bonus (4) $25 No-Deposit Forex Bonus ► Review Broker and Information | » $25 Free Bonus
  19. 19. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 19 / 50 Binary Options Trading Bonus Binary Options constitute a relative new instrument to Trade Forex and other Financial Markets. These are some Binary Option Brokers and their bonus offerings. Be aware that trading binary options is considerably risky. BINARY OPTIONS BROKER US TRADERS TRADING MINIMUM DEPOSIT & BONUS INFORMATION ■ GOptions Yes Max Payout: 90% 70+ Assets $200 25-100% Bonus ► Review Broker » Web-Site ■ CapitalOption No Max Payout: 85% 90+ Assets $100 100% Bonus ► Review Broker » Web-Site ■ StockPair Max Payout: 82% 120+ Assets $200 40% Bonus ► Review Broker » Web-Site ■ OptionRally No Max Payout: 78% 70+ Assets $200 30% Bonus ► Review Broker » Web-Site ■ OptionsXo No Max Payout: 89% 40+ Assets $100 Up to 100% Bonus ► Review Broker » Web-Site ■ Banc DeBinary No Max Payout: 75% 90+ Assets $250 50% Bonus ► Review Broker » Web-Site Note: Brokers Features & Promotions presented in this eBook may change any time. ■ Information, Reviews and Comparisons about Binary Options at No
  20. 20. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 20 / 50 5. Forex Trading Rebates –Promotions designed for Advanced Traders What is a Forex Trading Rebate? A Forex trading rebate means making money from your trading volumes. For example if you have joined a rebate plan offering $5 per lot (lot = $100,000), and during a certain month you have traded 20 lots, you earned $100. A trading rebate has nothing to do with your overall trading performance, only volumes matter. Where is the Catch? There is no catch here. Simply Forex Brokers provide rebates to Professional Investment Consultants as an incentive to introduce them new clients. A part of this rebate is given back from those professionals to real traders. This circle of money is called a Forex Trading Rebate. Automatic Forex Rebates –The best way to Trade Forex An automatic Forex Rebate means a rebate that is earned directly to your trading account without any interventions. You need again a Professional Investment Consultant as the intermediary. Here are three Trading Rebate Plans from advanced ECN Brokers and information how you can join them. All three rebates are fully automated and 100% free of any charge (sign or other fee). Furthermore all your other trading terms on these brokers will remain exactly the same. ECN BROKER REBATE PLAN US CLIENTS MINIMUM DEPOSIT FUND METHODS INFO HotForex ECN / STP Forex Broker ■ Automatic Rebate No $50 Bank Wire, Credit Cards, MoneyBook ers, and more methods » Learn more here Find more Information ► Automatic Rebate Link XeMarkets STP Forex Broker ■ $7.0 / lot ■ Automatic Rebate No $50 Bank Wire, Credit Cards, MoneyBook ers, and more methods » Learn more here Find more Information ► Manual Rebate Link ■ $5.6 / lot
  21. 21. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 21 / 50 ECN BROKER REBATE PLAN US CLIENTS MINIMUM DEPOSIT FUND METHODS INFO FinFx ECN Finnish Broker ■ FinFx $0.6 / lot discount on ECN Accounts ■ The same $0.6 / lot for ECN Pro Accounts ■ Automatic Rebate Or ■ 0.25 pips manual rebate for Micro Accounts $150 Bank Wire, Credit Cards, MoneyBook ers » Learn more here Find more Information ► Automatic ECN Rebate Link Minimum deposit $1,000 Dukascopy Bank ECN Swiss Broker ■ Dukascopy 30% Rebate on all commissions charged ■ Automatic Rebate No $5,000 Bank Wire, Credit Cards DUKASCOPY BANK » Learn more here During the registration process at the step KNOW US FROM indicate 8410 as your Introducing Agent ► Register at Dukascopy Bank -Indicating ‘Known us from IB’ 8410 Dukascopy Europe ECN Branch of Dukascopy ■ Dukascopy 10% Rebate on all commissions charged No $100 Bank Wire, Credit Cards DUKASCOPY EUROPE » Learn more here During the registration No
  22. 22. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 22 / 50 ECN BROKER REBATE PLAN US CLIENTS MINIMUM DEPOSIT FUND METHODS INFO Bank ■ Automatic Rebate process at the step KNOW US FROM indicate IB- 8411 as your Introducing Agent ► Automatic Rebate link Other Web-Sites with Forex Promotions (1) (Binary Options Bonus) (2) You may also find promotions in the Facebook page » Visit Facebook/OnlineFx
  23. 23. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 23 / 50 6. Six Different Forex Trading Styles – Select your Own Style These are the six main categories of Forex Traders (Trading Styles): 1. Curry Traders (Long Traders) WHAT THEY DO? They open positions lasting from 1 month to 9 months and aim to exploit inefficiencies’ in the level of interest rates between two economies. They usually like to buy currencies offering huge interest rates (10-15%) and at the same time sell currencies offering lower interest rates. This difference can be transformed into huge profits for those who know how and when to trade it. REQUIREMENTS: When you open a position in the Forex Market that remains open more than 1 day you pay or get paid what is called as the Swap value. Swap charges are calculated based on the level of interest rates between two currencies. These interest rate differences can sometimes work for you and some other times against you. Therefore if you trade long you need a Forex Broker offering the best terms as concerns the swap charges. Additionally you need a broker offering a wide asset index. An asset index is the portfolio of currency choices that you will be able to trade. This asset index varies depending on your broker. The more currency choices you have the easier it will be for you to exploit interest rate inefficiencies. When you trade long, you don’t care about the spreads, the technology, delays etc. It is essential that a long-trader must be able to understand fundamental analysis and the correlation between inflation, interest rates and the current Forex currency rates. I would need another eBook just to explain this correlation furthermore. 2. Swing Traders WHAT THEY DO? They open and close positions lasting from 1 day to 15 days. They aim to exploit mid-term trends because 1 week is considered mid-term in Forex Trading. Swing traders are some of the most successful Forex Traders there is. They avoid trading intraday as they don’t like the so called ‘market noise’ of intraday trading. REQUIREMENTS:
  24. 24. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 24 / 50 Swing trading is one of the best ways to trade Forex. In order to evolve as a Swing Trader you need a little bit about everything. You need narrow spreads, reasonable swap charges, relative good technology and also a broker offering a wide asset index. Swing traders are using both technical and fundamental analysis. 3. Intraday / Short Traders WHAT THEY DO? They open and close positions in the same day. This type of Forex traders is focusing solely on technical analysis. Short-traders use either their own system to trade or they pay a monthly subscription to an external signaling service. The alerts of signaling services are delivered via SMS, email, Facebook, Member’s Area etc. Information about Live Forex Signaling Systems is found in Chapter-7. REQUIREMENTS: Basically two things really matter. First of all you need the perfect technology with minimal delays. Secondly you need a Forex Broker offering very tight spreads and small trading commissions. Short-Trading is all about paying minimal cost. If you want to evolve as an Intraday Trader, think about joining a trading rebate plan too. A trading rebate can minimize your trading cost. You may find three ECN rebate plans at the Chapter-5 of this eBook. 4. News Traders WHAT THEY DO? They are trading important news and events, perfect information and top technology are considered absolutely a ‘must’ for News-Traders. REQUIREMENTS: The same requirements needed as the Intraday Traders (News-Traders are Intraday Traders too). 5. Forex Scalpers WHAT THEY DO? As it was mentioned in Chapter-1, scalpers open and close positions in tiny timeframes lasting less than one minute. They aim to ‘scalp’ the market and earn 2- 10 pips. REQUIREMENTS:
  25. 25. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 25 / 50 Scalpers need perfect technology and minimal transaction cost -But all that is needed in a much higher extend than the case of the usual intraday trader. Usually scalpers are not trading Forex manually but instead they trade via the use of an automated system (copier or Robot). You can learn about automated scalping systems in the Chapter-7 of this eBook. Keep in mind that usually scalpers trade exclusively three currency pairs. The reason is that these 3 pairs enjoy high liquidity and therefore minimal transaction cost: i) Euro against the US Dollar (EUR/USD) ii) British Pound against the US Dollar (GBPUSD) iii) US Dollar against the Japanese Yen (USD/JPY) 6. Copy Traders / Social Traders WHAT THEY DO? Following (copying) the trading activity of other traders. This procedure is also called as Social Trading (nothing to do with common Social Media). REQUIREMENTS: Social trading is booming nowadays. In order to make money from this type of trading you need a social trading platform, for example ZuluTrade and MirrorTrader. Social trading platforms are again free to download and to use. ► The ZuluTrade Platform Furthermore you need good technology too, but most importantly you need an excellent instinct to select the perfect signal provider. All social trading platforms offer the chance of monitoring the past performance of any signal provider. You can also compare providers based on your criteria.
  26. 26. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 26 / 50 7. Live Forex Trading Signals & Forex Robots (i) Live Forex Trading Signals What is a Live Forex Trading Signal? A Live Forex trading signal is an alert for buying or selling a Forex Currency Pair. This alert can be delivered either manually or automatically. Manual alerts are delivered via classic methods as email, Facebook, SMS, twitter, member’s area etc. Automatic alerts are delivered via a signal copier. Usually automated trading signals are based on MetaTrader4. Which are the Criteria When Choosing a Forex Signaling Service? A Forex signaling service is provided usually for a monthly subscription between 50- 150 USD. First of all you must focus on a service that is able to cover all your needs (manual or automated trading, delivery method, frequency of signals etc). Furthermore, it is important to focus also on the past performance of each service. Sometimes, these services offer also a trial period of a few days. Here is a list with popular Forex Signal Providers: SIGNAL PROVIDER STYLE TRADING COST INFORMATION SIGNALS & MENTORING CLUB ■ Automated Trading ■ Manual Trading ■ News Trading ■ Social Trading ■ Forums with Reports ■ Learning ■ Forex Currencies ■ Gold Trading ■ Stocks & Indices Trading ■ 77 USD per month ► Review System » Visit Web
  27. 27. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 27 / 50 SIGNAL PROVIDER STYLE TRADING COST INFORMATION TRADE MINER ■ Desktop Trading Software ■ Manual Trading ■ Forex Currencies ■ Futures Trading ■ Stocks Trading ■ Metals ■ 97 USD for one-time ► Review System » Visit Web MBFX TRADING ■ Manual Trading ■ SMS Alerts ■ Forex Currencies ■ Gold Trading ■ Stocks Trading ■ 97 USD for one-time ► Review System » Visit Web AUTO BINARY OPTIONS SIGNALS ■ Manual Trading ■ SMS Alerts ■ eMail Alerts BINARY OPTIONS TRADING ■ Forex Currencies ■ Stocks & Indices Trading ■ 120 USD for one-time ► Review System » Visit Web ELITE SIGNALS ■ Automated Trading ■ Manual Trading ■ Forex Currencies ■ Gold Trading ■ 49 USD per month ► Review System » Visit Web FX TRENDY TRADING SYSTEM ■ Manual Trading ■ eMail Alerts ■ Forex Currencies ■ 37 USD every 3- months ► Review System » Visit Web ■ Find Signal Providers and Trading Systems Reviews at ■ Expert Advisor Reviews at
  28. 28. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 28 / 50 (ii) Forex Robots (Expert Advisors) What is a Forex Robot? A Forex Robot (or else an Expert Advisor) is a piece of software that plugs in a Trading Platform in order to trade Forex automatically. These systems are usually running on Metatrader4. If you want to trade using a Forex Robot you need top technology and probably a VPS hosting service (explained later). The Criteria When Choosing a Forex Robot A Forex Robot is designed to perform a very difficult task so there are many parameters defining your best choice. Here are some important factors that must be taken into consideration: (1) Past Performance of the Robot (2) Who is the Developer? (3) What is the average frequency of trading? (4) Is there any Money Management Mechanism (spread and slippage control etc.) (5) What is the Price of this system? Can I use it in more than one Live Account? (6) Does my broker allow the use of a Forex Robot? (usually ECN /STP brokers allow trading via the use of Forex robots) (7) Is my broker suitable for automated trading? (spreads, execution speed etc) (8) Will I need a VPS hosting service? (probably the answer is yes) Furthermore: (9) Test always any system in a demo account before using it in a real trading account. (10) Never mix the use of a Forex robot with other trading activity, it may confuse the robot’s Money-Management System
  29. 29. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 29 / 50 POPULAR FOREX ROBOTS (EXPERT ADVISORS) Here is a list with popular Forex Robots (Expert Advisors): FOREX ROBOT STYLE PLATFORM ONE-TIME COST INFO FAP TURBO FOREX ROBOT ■ Scalping many Forex Currencies in the M15 Chart ■ MetaTrader4 ■ 149 USD for one-time ■ Free Lifetime Updates ■ 1 Forex License ► Review System » Visit Web WALLSTREET ROBOT ■ Scalping: EUR/USD, GBP/USD, USD/JPY, USD/CHF, AUD/USD, NZD/USD ■ MetaTrader4 ■ MetaTrader5 ■ 299 USD for one tine ■ 3 Forex Licenses ■ Free the Omega Indicator ► Review System » Visit Web GPS FOREX ■ Scalping many currencies during the Asian Session ■ MetaTrader4 ■ MetaTrader5 ■ 149 USD for one time ■ 1 Forex Account License ► Review System » Visit Web VOLATILITY ROBOT ■ Scalping only EUR/USD, GBP/USD ■ MetaTrader4 ■ 190 USD for one time ■ 1 Forex Account License ► Review System » Visit Web FX MEGADROID ■ Scalping only EURUSD ■ MetaTrader4 ■ ZuluTrade ■ 67 USD for one time ► Review System » Visit Web ■ Find Expert Advisors and Trading Systems Reviews at What is a VPS Hosting Service? In order a Forex Robot to trade effectively it requires to remain active 24 hours per day. This problem can be solved via the use of a VPS. A VPS is an external hosting service that allows the Robot to trade 24 hours per day without having your PC, Laptop or Tablet turned on. A VPS usually costs about $40 per month but certain brokers offer that service for free.
  30. 30. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 30 / 50 8. Forex Trading Resources (i) Major Currency Symbols CURRENCY CODE SYMBOL FOREX SLANG US DOLLAR USD $ Dollar Buck EUROPEAN EURO EUR € Fiber SWISS FRANC CHF CHF Swissy BRITISH STERLING GBP £ Cable JAPANESE YEN JPY ¥ Yen CANADIAN DOLLAR $ Loonie AUSTRALIAN DOLLAR AUD $ Aussie NEW ZEELAND DOLLAR NZD $ Kiwi (ii) Six (6) Main Types of Trading Orders These are the six (6) important order types when trading Forex: (1) Market Order Buying or selling a currency pair at the current market price. (2) Limit Order Buying or selling a currency pair at a pre-determined (limited) price. (3) Stop-Loss Order A stop-loss is the most important order type. A stop-loss sets a limit to the maximum amount you are willing to risk in any trade. (4) Target Profit Order This common order sets your targeted price level. It pre-determines your profit potential. (5) Limit Entry & Stop-Entry Buy or sell a currency pair below or above the market at a pre-specified level. (6) OCO Order OCO means One-Cancels-Other. Based on this order if a trade is executed then another trade is automatically cancelled. (7) GTC Order GTC means Good-Till-Cancelled. A GTC order remains in the market active until it is either filled or cancelled.
  31. 31. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 31 / 50 (iii) Currency Pairs and Changes in Historic Volumes Source: Aite Group ‘Global FX Market Update 2013: Increased Market Transparency, More Competition’
  32. 32. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 32 / 50 (iv) Forex Calendar / Heat Map This Forex Heat Map Table is based on statistics between the years (2000-2013). The full research was published on Source: /
  33. 33. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 33 / 50 9. Forex Trading Glossary A ADX (Average Directional Index) ADX is a technical analysis indicator measuring the strength of a trend. Appreciation of a Currency A currency is appreciated when it earns value against another currency. This may be due to fiscal or monetary developments or simply due to market psychology. A monetary policy aiming domestic currency appreciation is called a “Hard-Currency Policy”. The opposite situation is called currency depreciation. Arbitrage Arbitrage is a short-term trading type that aims to take advantage of market inefficiencies. That means buying an asset in a particular market and at the same time selling the same asset in another market. Ask and Bid Ask means the price that you may buy a financial traded asset and bid means the price that you may sell it. ■ Example: Buying at 80.00 (bid) and Selling at 80.02 (ask) Aussie Aussie is a slang name that is used for the Australian dollar (AUD). B Bank of Canada (BOC) Bank of Canada is the Central Bank of Canada responsible for the Canadian monetary policy. ►Visit the Bank of Canada Bank of England (BOE) Bank of England is the Central Bank of England responsible for the UK monetary policy. ►Visit the Bank of England
  34. 34. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 34 / 50 Bank of Japan (BOJ) Bank of Japan is the Central Bank of Japan responsible for the Japanese monetary policy. ►Visit the Bank of Japan Balance of Trade Balance of Trade measures the difference between the value of imports and exports of a country for a particular time frame (usually monthly or annually). When the outcome is negative Trade Deficit is created and when it is positive Trade Surplus is achieved. Bank Rate A Bank rate is the interest rate charged by the central bank of a particular country when it lends capital to the domestic commercial bank institutions. It is used by central banks as a tool to control money supply in the economy. Bar Chart A Bar Chart is a very popular chart type where prices are indicated as bars and lines. Base Currency In a currency pair, the base currency corresponds to the first quote. Bear Market or Bearish Market Bear or Bearish market is a market that is expected to trend downwards. Beige Book The Beige Book is a collection of US FED (Federal Reserve) reports containing important reviews regarding the US economy. Breakout Broker A broker is the market participant who operates as the middleman between traders and commercial institutions. A broker may execute buy and sell orders on behalf of his clients charging a predefined commission. » Compare Forex Brokers using the Rating Formula v4.0 Breakout is technical analysis term describing the breakdown of a trend below support levels or above resistance price level. When a breakout occurs usually traders react nervously and the result is high volatility and high trading volume.
  35. 35. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 35 / 50 Brokerage Brokerage is the act of a buying and selling financial assets on behalf of third parties. Bull Market or Bullish Market Bull Market or Bullish Market is a market that is expected to trend upwards. The opposite is a bearish market. Bundesbank Bundesbank is the Central Bank of Germany. As Germany is a member of eurozone, Bundesbank is coordinated with the policies of European Central Bank (ECB). ► Visit the German Bundesbank C Cable Cable is a Forex slang used for the British Pound against US Dollar (GBP/USD currency pair). Candlestick Chart A Candlestick chart is a technical analysis chart where prices are indicated using ‘Japanese Candles’. Carry Trade Carry trade means keeping a trading position with a positive overnight interest return. Individuals who are practicing curry trading are called curry traders. Cash Flow It is the difference between cash inflow and cash outflow of a company during a particular period from one month to one year. Cash flows are indicating the ability of a company to generate money and are highly valued by all investors. Categories of Forex Pairs There are three Main Categories of Forex Currencies: iv) Forex Majors (the most popular Forex pairs) v) Forex Minors (expensive to trade) vi) Forex Exotics (very expensive to trade) The Forex majors include: EUR/USD, GBP/USD, USD/JPY, USD/CHF, USD/CAD, AUD/USD and NZD/USD.
  36. 36. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 36 / 50 CCI (Commodity Channel Index) CCI is a cyclical technical indicator identifying when a market is overbought / oversold. Central Banks Central Banks are authorized institutions by governments to regulate and to control the domestic banking sector. In addition central banks are implementing the national monetary policy. CFD (Contract for Difference) A contract for difference is a specialized trading instrument that provides speculation on stocks, indices, commodities and other financial assets. Chain Store Sales Indicator It is an economic indicator for measuring the dynamics of retail sales. Clearing Process Clearing is the process of trade settlement. Collateral The term collateral describes the amount that is deposited by a trader as insurance in order to trade. Commission Trading Commissions are charged by brokers in order to offer their brokerage services. Some brokers do not charge commissions as they gain profits from the spread between bid and ask. Confirmation Confirmation in technical analysis is the process when some indicators are used to confirm the results of another indicator. Correction Correction means a pullback of the price of an asset after a strong movement has occurred. A normal correction should count no more than 10% of the master movement. Counter Currency In Forex trading the counter currency is the second currency of a Forex pair. For example in EURUSD, the counter currency is USD.
  37. 37. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 37 / 50 CPI CPI stands for consumer price index. CPI is the statistical measure of inflation and it is based upon the changes of prices of a specified goods and services. Currency Option A Currency Option is an option contract that has as its underlying asset a Forex currency pair (for example GBPUSD). In general a currency option provides its holder with the opportunity but not the obligation to buy or to sell one currency for another at an agreed quote and within an agreed time period. → Valuating a Currency Option: As in the case of every other Option Contract the valuation relies on: (i) Intrinsic Value (The difference of the Current Exchange Rate and the Pre-Agreed Exchange Rate) (ii) Time to Maturity (More time adds value) (iii) Volatility (The greater the volatility of the underlying asset the greater the value of the option contract) Currency Pair A currency pair is a quote of two currencies. In any currency pair the purchased currency (First) is called the Base Currency (EUR) and the sold currency (Second) is called the Quote Currency. Currency Rate A currency rate is the price rate of a particular currency against another particular currency. Currency Symbol A Currency Symbol (i.e. USD, NZD) is indicating a particular currency. D Day Order A Day Order is an order to buy or to sell a financial traded asset that will stay active until the end of the trading day. Divergence Divergence in technical analysis means that the charts produced by indicators differ from price charts.
  38. 38. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 38 / 50 Double Top / Bottom Formation This is a technical analysis pattern which occurs when the price of an asset reaches twice a certain price level and then reverses its trend. There is also the Triple Top / Bottom Formation. E Economic Indicator An Economic indicator is a fundamental indicator describing important trends in an economy (GDP change, unemployment, inflation etc). ECN Broker An ECN broker is a Forex brokerage company that is able to provide its clients with direct access to the Electronic Network of Banks (ECN). ECN brokers usually offer the best terms to trade Foreign Exchange (tight spreads and no price manipulation). In addition most ECN brokers allow Forex scalping and hedging. ECN brokers don't trade against their clients as market makers and in general they are considered as the best choice to trade Forex. Efficient Market Theory It is a market theory which assumes that all important economic and other factors are already incorporated in the current prices. European Central Bank (ECB) The European Central Bank is the financial institution authorized by the European Union to regulate Eurozone and implement Europe’s monetary policy. ► Visit the European Central Bank Exchange Rate In Forex an exchange rate is the rate that a currency can be bought or sold for another. Expert Advisor An Expert Advisor (EA) is a piece of software (script) that plugs into a trading platform and it is designed to open and close positions automatically without human control.  FAP Turbo  Forex Bullet Proof  ForexGrowth Robot
  39. 39. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 39 / 50 F Fed FED or Federal Reserve Bank is the central bank of the United States of America. ► The FED’s web-site Fibonacci Retracement The Fibonacci Retracement is a popular technical analysis tool for trading Forex, Stocks, Indices etc. The Fibonacci Retracement indicates the crucial levels for a trend break or bounce. These levels are calculated as the 23.6%, 32.8%, 50.0% and 61.8% of the current trend range. Flat Market A Flat Market is a market without a particular direction. Flat markets are common phenomenon at periods when trading activity is minimized (for example during July or August). The Fibonacci Levels: 23.6% | 32.8% | 50.0% | 61.8% Forex Forex means FOReign EXchange and it is a global market where the world’s currencies are traded, one currency against another. Central Banks, Commercial Banks, Large and Small Corporations, Institutional Investors, Individual Traders and Common Tourists occasionally need to exchange one currency for another. Free Float Free Float in stocks trading is the number of free shares available to the investing public as a percentage of the total shares capital outstanding. Fundamental Analysis Fundamental Analysis is the financial analysis which is based only on fundamental news and events. Fundamental Analysis includes economic factors such is the change of inflation, GDP, unemployment, interest rates etc. G G8 G8 is a group of the 8 most developed countries in the world, including the US, Japan, United Kingdom, Germany, Russia, France, Italy and Canada.
  40. 40. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 40 / 50 Gap A Gap is the price difference between the previous period's closing and the next period's opening. Usually gaps are occurring after weekends (Friday's closing price and Monday's opening price). GDP The Gross Domestic Product (GDP) is measuring the aggregate value of goods and services produced by an economy during a certain time period. The Gross Domestic Product is a very important economic figure. GNP The Gross National Product (GNP) is measuring the total gross domestic product (GDP) plus income, gained from investments or work abroad. Greenback Greenback is the Forex slang for the US Dollar. H Hard-currency policy A monetary policy imposed by Central Banks aiming the domestic currency appreciation against other currencies. This policy is achieved usually via the increase of the level of domestic interest rates. Hedge Funds Hedge Funds are investment funds that hedge their investment positions against risk. ► Find Hedge Funds at Hedging Hedging is a method of diversifying risk when trading the world’s Financial Markets. Practical it means opening and maintaining a certain market position in order to offset the risk of another trading position. For example if you are long (buy shares) on Apple’s stock you may short (sell) the whole Nasdaq Index. Professional traders are always trying to hedge against their portfolio risk and avoid trading ‘naked’. Home Sales Indicator It is a macroeconomic indicator measuring the sales of real estate at the secondary housing market.
  41. 41. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 41 / 50 Housing Starts and Permits It is an index measuring the current number of houses under construction and the current number of construction permits. I IFO IFO is the German business optimism index measured by the German Institute of Economic Research. ► Visit the German Institute of Economic Research Industrial Production Index It is an important macroeconomic index measuring the total output of industrial production in a certain time period. Interbank Rates Interbank Rates are the currency rates imposed by large International Banks in order to lend capital to other banks. Intraday High It is the highest price of trading activity in a particular day. Intraday Low It is the lowest price of trading activity in a particular day. Intraday Trading Intraday-Trading or Day-Trading means buying and selling a financial traded asset (for example a currency pair) during the same day. Inflation Inflation is an economic index measuring changes in the level of prices of goods and services. Inflation is often called as the ‘hidden tax’ as it diminishing the purchasing power of consumers. In general, higher levels of inflation constitute ‘bad news’ for the economy. J Japanese Economy Watchers Survey It is a survey measuring the business climate in Japan.
  42. 42. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 42 / 50 Japanese Machine Tool Orders Indicator It is an indicator measuring the total value of new orders placed with machine tool manufacturers. Jobless Claims It is an important macroeconomic indicator measuring the number of registered unemployed. K Kiwi Kiwi is the Forex slang of the NZD (New Zealand Dollar). Knock-Ins Strategy It is an options trading strategy that requires the underlying asset to reach a certain price level before a previously bought option becomes active. L Leading Indicators By Leading Indicators we are referring to an index containing the most crucial macroeconomic indicators. Leverage Leverage Rate describes the ratio between the owned capital and the total capital invested. The total capital invested incorporates the owned capital plus the borrowed capital. □ Stocks Trading: Leverage usually 2:1 □ Forex Trading: Leverage usually 200:1 Liquidity / Liquid Market A liquid market is a market that a lot of buyers and sellers are participating. That high market activity is generating high trading volumes. Liquid markets offer the best terms for short-trading (tight spreads, easy entry, easy exit). Long Go Long means buying a financial asset. The opposite of Go Long is to Go Short (Selling).
  43. 43. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 43 / 50 Lot Lot is the standard unit size of a transaction. As concerns Forex Trading there are three lot sizes: ■ Micro Lot Size which equals $1,000 ■ Mini Lot Size which equals $10,000 ■ Standard Lot Size which equals $100,000 M Margin and Margin Call Margin is the minimum capital that an investor is obligated to keep in his trading account as insurance in order to maintain a trading position. If a position worth $10,000 and the margin level is 50% then the investor must maintain $5,000 cash on his account. If this position is losing money then his broker may issue a ‘Margin Call’ which means demand for more cash in order the position to remain active. Momentum Momentum is technical analysis term which means that the price of a financial asset shows strength to move in a particular direction (uptrend or downtrend). Moving Average (MA) Moving Average is one of the most popular technical analysis indicators. The moving average is calculated as the average price of a series of periods. The most common moving averages are calculated by the average price of 50 and 200 periods. There are a lot of different ways to calculate a Moving Average: 1- Simple Moving Average 2- Exponential Moving Average 3- Weighted Moving Average 4- Cumulative Moving Average N Net Factory Orders Net Factory Orders are measuring the net change of industrial activity (industrial orders).
  44. 44. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 44 / 50 Nonfarm Payrolls The Nonfarm Payrolls measure the aggregate number of employees on the payroll in an economy except the agricultural sector. O Old Lady Old Lady is a Forex slang which corresponds to the Bank of England (BOE). Open Order An open order is an order that will stay active until it is filled or canceled Open Position An open position is an active trading position. Oscillator An Oscillator is a technical analysis tool used for price movement forecast. Output Index An output index is an index measuring the production volume output. P PAMM Account PAMM means Percentage Allocation Management Module and it is an account type offered by some brokers allowing Professional Asset Managers to manage other’s trading funds. PAMM accounts offer reliability and security on behalf of traders as Money Mangers can’t withdraw their funds. ► Compare PAMM Accounts at Forex Automatic Personal Spending Indicator The personal spending indicator measures the change of individual spending in an economy. When individual spending is increased then the market expects higher growth and higher inflation in the future. Pip A Pip is the minimum level that a price can change. In Forex Trading a pip is the last digit of an exchange rate ■ if GBP/USD rate is 1.5001 then 1 pip equals 0.0001.
  45. 45. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 45 / 50 Pivot Point A Pivot Point is an average price that is calculated based on the previous High, Low and Close and it is considered as an important support / resistance level. PPI (Producer Price Index) PPI is the index of producer prices. When PPI increases it means ‘bad news’ for the corresponding economy. Premium A premium measures the amount at which future prices will surpass the current spot prices. The opposite of a premium is a discount. Price Channel A price channel is a range that sets the limits of price movement. Q Quotation Quotation is the process of indicating the value of a currency in the units of another currency. Quote Quote is a market price. Quote Currency In Forex Trading, the quote or counter currency is the second currency in a currency pair. For example, in EURUSD, USD is the quote currency. R Retail Price Index (RPI) It is a UK macroeconomic indicator measuring the change of retail prices. Rollover Rollover has many meaning in finance, when trading derivatives it means moving the delivery date forwards.
  46. 46. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 46 / 50 RSI RSI means Relative Strength Index and it is a very popular technical analysis indicator that measures the strength of a price movement and indicates overbought and oversold levels. ■ Overbought above RSI=70 | ■ Oversold below RSI=30 S Scalping Scalping is a Forex Trading technique that means opening and closing many positions in tiny segments of time (maximum 1-2 minutes) and targeting returns of 5-20 pips. Those traders who scalp Forex are called Forex Scalpers. Slippage Slippage on execution of an order means opening or closing a trading position in different price than expected. It is a delay on order execution that can highly disturb short-term traders and especially scalpers. Spot Spot is a transaction that is carried out immediately but the payment is settled within two days. Spread Spread is the difference between ask and bid of the price of an asset and it is measured in Pips. Square It is a situation when the total profits materialized in a certain trading period are equal to the total losses. Sterling Sterling corresponds to the British Pound (GBP). STP Execution STP means Straight-Through-Processing and it is a type of Forex Execution that doesn’t involve manual intervention or order execution. Support & Resistance Resistance is a price level of important expected supply and support is a price level of important expected demand.
  47. 47. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 47 / 50 Swap SWAP charge is the overnight value for holding a trading position. In Forex trading, the SWAP value may be negative or positive based on the level of interest rates of the two currencies you buy and sell. Swissy Swissy is the Forex slang name for Swiss Franc (CHF). T Take-Profit Order A Take Profit Order is a trading order that will close a certain trade when it will reaches a particular price level. Technical Analysis Technical Analysis is a popular method of forecasting the future price direction of an asset or a market based on historic price data and chart examination. Thin Market A thin Market is a market suffering from limited liquidity. Tick Tick is the minimum one time price change of a financial traded asset. Time Cycles Time Cycles are used to describe the repetition of price movements forming a pattern in particular time frames. Trader A trader is an individual who is buying and selling financial assets in order to make a profit. Trading platform A Trading platform is a software program that can be used for trading the financial markets. ► Compare Trading Platforms at
  48. 48. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 48 / 50 Trailing-Order A trailing order is an order that changes as the price changes. This could be a trailing stop-loss or a trailing take-profit order. Transaction Cost Transaction cost is the incorporated trading cost when buying or selling a financial asset. Trend A Trend is a strong market direction that may be either an Uptrend or a Downtrend. U Uncovered Transaction An uncovered position is a position that isn’t yet filled (open position). Unemployment Rate The unemployment rate is a very important macro-economic figure which indicates the percentage of unemployed population against the total number of labor-able population in an economy. Uptick An uptick is called the new price quote if it higher than the previous price quote. Uptrend An uptrend is an ascending price trend which is usually found in bullish markets V Value Date Value date is the date of settlement of a spot or a rward deal. Value Spot Value Spot means a settlement after two working days from today. Volatility Market Volatility is a statistical measure that calculates the number of price changes in a market for a given period of time. Volume
  49. 49. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 49 / 50 Volume measures the level of trading activity in a financial market. VPS VPS means Virtual Private Server and it is a method of hosting a software application on an external server. VPS is commonly used for trading Forex via Expert Advisors (Forex Robots). The advantage of a VPS hosting is that it allows trading 24/5 without having your PC open. W Wash-Trade Wash Trade means a trade with neutral results, no profit no loss. Wholesale Prices Index Wholesale Prices Index is a macroeconomic index measuring the rate of change in the wholesale prices. Y Yard Yard in Forex Trading is a slang that means 1 billion US Dollars. Z ZEW ZEW is the Center of European economic research. It was found in 1990 and it is located in Germany (Hamburg). ► Visit the ZEW
  50. 50. FFoorreexx GGuuiiddee vv..22..00 –– QQeexxppeerrtt..ccoomm 50 / 50 ©© GGeeoorrggee PPrroottoonnoottaarriiooss 22001144 FFoorreexx TTrraaddiinngg GGuuiiddee vv..22..00 -- CCooppyyrriigghhtt ©© MMaayy 22001144 CCOOPPYYRRIIGGHHTT IINNFFOORRMMAATTIIOONN AALLLL RRIIGGHHTTSS RREESSEERRVVEEDD.. NNoo ppaarrtt ooff tthhiiss eeBBooookk ((iinncclluuddiinngg tteexxtt,, iinnffoorrmmaattiioonn,, ttaabblleess,, aannaallyyssiiss,, rreessoouurrcceess aanndd iimmaaggeess)) mmaayy bbee ccooppiieedd,, rreepprroodduucceedd,, mmiirrrroorreedd oorr ssoolldd.. DDIISSCCLLAAIIMMEERR AANNDD LLEEGGAALL NNOOTTIICCEE TThhee iinnffoorrmmaattiioonn pprreesseenntteedd iinn tthhiiss eeBBooookk rreepprreesseennttss tthhee vviieeww ooff tthhee aauutthhoorr.. EEvveerryy aatttteemmpptt hhaass bbeeeenn mmaaddee bbyy tthhee aauutthhoorr ttoo vveerriiffyy aallll iinnffoorrmmaattiioonn iinncclluuddeedd iinn tthhiiss eeBBooookk,, bbuutt tthheerree iiss nnoo gguuaarraanntteeee aabboouutt tthhee aaccccuurraaccyy aanndd tthhee rreelliiaabbiilliittyy ooff aannyy iinnffoorrmmaattiioonn pprreesseenntteedd iinn tthhiiss eeBBooookk.. IInn aaddddiittiioonn,, tthhiiss FFoorreexx GGuuiiddee iinncclluuddeess aaffffiilliiaattee lliinnkkss.. TThhiiss eeBBooookk iiss nnoott iinntteennddeedd ffoorr uussee aass aa ssoouurrccee ooff ffiinnaanncciiaall oorr iinnvveessttmmeenntt aaddvviiccee.. RRIISSKK WWAARRNNIINNGG TThheerree iiss ccoonnssiiddeerraabbllee eexxppoossuurree ttoo rriisskk wwhheenn ttrraaddiinngg FFoorreexx,, FFuuttuurreess aanndd OOppttiioonnss.. TTrraaddiinngg FFoorreexx aanndd ootthheerr lleevveerraaggeedd pprroodduuccttss iinnvvoollvveess aa ssiiggnniiffiiccaanntt lleevveell ooff rriisskk aanndd iiss nnoott ssuuiittaabbllee ffoorr aallll iinnvveessttoorrss.. BBeeffoorree uunnddeerrttaakkiinngg aannyy ssuucchh ttrraannssaaccttiioonnss yyoouu sshhoouulldd eennssuurree tthhaatt yyoouu ffuullllyy uunnddeerrssttaanndd tthhee rriisskkss iinnvvoollvveedd aanndd sseeeekk iinnddeeppeennddeenntt aaddvviiccee iiff nneecceessssaarryy.. TThhee ppoossssiibbiilliittyy aallwwaayyss eexxiissttss tthhaatt yyoouu ccoouulldd ssuussttaaiinn aa ssuubbssttaannttiiaall lloossss.. NNeevveerr ttrraaddee wwiitthh ffuunnddss tthhaatt yyoouu mmaayy nneeeedd iinn tthhee ffuuttuurree.. PPaasstt ppeerrffoorrmmaannccee iiss nnoott nneecceessssaarriillyy iinnddiiccaattiivvee ooff ffuuttuurree rreessuullttss.. AAnnyy ooppiinniioonnss,, ssuuggggeessttiioonnss,, bbrrookkeerrss,, ssyysstteemmss,, sseerrvviicceess,, ssooffttwwaarree,, rreevviieewwss,, pprroommoottiioonnss,, bboonnuuss,, rreebbaatteess,, lliinnkkss aanndd wweebb--ssiitteess mmeennttiioonneedd oonn tthhiiss eeBBooookk aarree pprroovviiddeedd aass ggeenneerraall mmaarrkkeett ccoommmmeennttaarryy,, aanndd ddoo nnoott ccoonnssttiittuuttee iinnvveessttmmeenntt aaddvviiccee iinn aannyy wwaayy.. FFoorreexx TTrraaddiinngg GGuuiiddee vv..22..00 -- CCooppyyrriigghhtt ©© MMaayy 22001144 GGeeoorrggee PPrroottoonnoottaarriiooss --AAllll rriigghhttss rreesseerrvveedd wwoorrllddwwiiddee DDiissttrriibbuuttiioonn bbyy QQeexxppeerrtt..ccoomm wwwwww..QQeexxppeerrtt..ccoomm