2. WHAT IS FOREX TRADING ?
Forex is the largest financial market in the world. It has been traded in large amounts
reaching $ 5 Trillion in a single day since forex opened to the public in 1994.
Forex(FX) = Foreign Exchange
Just like any other business ,we buy a currency at a low price and resell it after the rise to
make a profit.
Forex is one of the most popular investments because of its high profit returns.
Profits can reach up to 100% within a few days. As a result of such rapid movements, there
is no doubt that forex is also at high risk of incurring losses when you do not have enough
knowledge.
4. The FOREX exchange known today began in 1973, but this currency trading has
actually taken place since the first coins were introduced in the ancient days of the
Egyptian pharaohs. When after World War II ended, the U.S. economy was stronger
than most European countries. The US dollar became a well -known currency at the
time and was recognized as a global reserve currency.
In 1982 it became the first time a currency pair was offered as a purchase option to the
United States, and more currencies appeared in 1983. By 1987, both the United
Kingdom and the United States were fully traded in foreign exchange, but there were
many more countries. Countries such as China, South Korea and Iran (in 1991) also
participated.
The first online trading of the currency took place in 1994, which in turn led to the
development of the Euro currency in Europe. The rise of the Euro threatens the
dominance of the US Dollar as a global reserve currency. The euro is currently the
official currency in 19 European countries
6. Forex trading law in Islamic countries is one of the hot topics discussed in
fact. there are muftis who say it is haram and there are those who say it
should be. The law of forex trading should be if it does not have the element
of gambling, usury and the element of SWAP.
if there is it will continue to be illegal. when we trade, there must be
knowledge in the trade so that there is no element of gambling where we
just guess the price fluctuations without any analysis and basis
(Fundamental).
A swap -free account is an account that should be used by Muslim traders if
they want to trade forex. “Trade using knowledge. Forex is not a place for
gambling!”
8. One of the reasons is supply and demand. When the world needs more US
dollars, then at that time the value of the dollar can increase. When there are
too many US dollars circulating in the market, the price of that currency can
decrease.
The forces that move the market can also reflect changes in the value of a
currency. In addition, other factors such as interest rates, new economic data
from the largest countries and geopolitical tensions can also affect the price of a
country's currency.
9. STOCKS VS FOREX
STOCK FOREX
TRADER SELLS AND BUYS STOCK TRADER BUYS,SELLS CURRENCY
LIMITLESS TYPES OF STOCKS ONLY 6 MAIN CURRENCIES
WORLDWIDE
LIMITED BUYER AND SELLER UNLIMITED BUYER AND SELLER
SOME STOCKS ARE HARD TO SELL EASY TO SELL AND BUY
TRADER CAN TRADE IN WORKING
HOURS
TRADER CAN TRADE 24 HOURS FOR 5
DAYS CONSEQUTIVELY
ONE WAY MARKET 2 WAY MARKET
10. To buy and sell stocks, investors must open an account and register with Bursa
Malaysia through a brokerage company, while for Forex, only need to register through
an online Forex broker.
Investing in stocks involves companies listed on Bursa Malaysia. As for Forex, it
involves all the world's foreign currencies such as USD, EUR, JPY, GPB, WON and so
on.
Transactions in and out of money to the account have two ways, namely through online
banking and also through a remisier/registered stock dealer. While Forex requires
deposit through existing brokers and all deposit or withdrawal transactions only
through online brokers.
The profit of the stock is through the performance of the counter/company bought in
addition to a little influence on the economy and politics while Forex is based on the
performance of world currencies. It always involves some political factor, world
economy, and others.
11. PLAYER IN THE FOREX MARKET
Tier 1 : Central Bank / Interbank (Bank Negara, BOJ, BOC, BOE)
Tier 2 : Institutional Funds (CitiGroup, JP Morgan, Goldman Sachs and Hedge
Funds .
Tier 3 : Retails Traders (We are here!) In each tier there is its own story or
narrative. Each has its own role. These three roles are interdependent in building a
market.
12. MAIN CURRENCIES
There are many currencies you can trade, you can start with a major currency
known as "Major Currencies" because it is the most traded currency and represents
some of the largest economies in the world. 7 this is the most important currency.
Currency Pair Types
Major = Major currencies always include USD.
Minor = Currency that does NOT include USD is known as “Cross Pair ”.
Exotic = A currency that has some advanced market characteristics, but does not
fully meet its standards.
13.
14. WHEN TO TRADE FOREX
The Forex currency market runs 24/7 but can only be traded on Monday to Friday
only (5 days). This is because the broker closes on Sundays including public
holidays.
In a day not every time the market is active. There are brisk times, there are slow
times. The London and New York sessions were most active. In these two sessions
there is an overlap time.
Midweek is the most active day. Friday is a better time to close all positions or make
a breakeven because it is the last day for the week.
15.
16. BEST TIME TO TRADE FOREX
Monday: Usually trading activity is a bit slow, probably a factor just started
working.
Tuesday, Wednesday, Thursday: Most active trading activity.
Friday: Hard to expect as traders are more likely to close positions.
By being aware of the above key sessions along with the related pairs you can find
the best period to trade further improving your trading performance.
18. There are 8 time frames in forex :
1. M5 ( represents 5 min )
2. M15 (represents 15 min )
3. M30 (represents 30 min )
4. H1 ( represents 1 hour )
5. H4 ( represents 4 hours )
6. D1 ( represents 1 day )
7. W1 ( represents 1 week )
8. MN (represents 1month )
If you select H1, it means one candlestick stick on the H1 graph represents
the movement of a graph over a period of 1 hour.
If you choose M5, it means one candlestick stick on the M5 graph represents
the movement of a graph over a period of 5 minutes.
20. Bid = The price you sell.
Ask =The price you buy.Ask value is higher than bid.
Spread = Bid/Ask Difference (Broker Charge)
The spread is different on each pair determined by the broker. Some brokers charge
fixed spreads and some charge in the form of floating or both. Always changing all
the time.
22. Leverage is a characteristic feature that enables your trading strategy by using
borrowed money. The goal is to get a big profit potential.
Types of Forex Leverage :
- 1:1 = 100%
- 1:50 = 2%
- 1:100 = 1%
- 1:200 = 0.5%
- 1:500 = 0.2%
- 1:1000 = 0.1%
- 1:3000 = 0.3%
Dangers of leverage :
- Overlot.
- The margin call (MC) opportunity is getting bigger.
- High leverage is higher risk
24. Pip = Pip (Percentage in point) is the change value in one pair. A pip is the
smallest price movement that can be made by an exchange rate based on the forex
market. How to calculate pips:
1pip = 10points
EXAMPLE :
Sl 25pips = 250point
Buy
Entry point = 64.869
SL = 64869 point (entry price) - 250 point = 64619 point = price 64.619
Tp = 64868 point + 250 point = 65118 point = 65.118 price,
25. Swap = Charge imposed by the broker if there is a position not yet
closed or brought to the next day. Positive or negative swap depends
on the number of lots. Swap rates change from time to time.
To avoid swaps can open an Islamic account (Swap Free)
27. Market Order: Market order is a type of order to BUY or SELL at current price.
Pending Order (PO)
Limit Orders
- Buy limit: Buy below the current price.
- Sell limit: Sell above the current price.
- Take Profit: To target and take profit. Can be happy to 20pips - 100pips.
Stop Orders
- Buy stops: Buy above the current price.
- Sell Stops: Sell below the current price.
- Stoploss: To limit your loss. Can use Stoploss to 30pips - 50 pips from entry.
29. How to reduce risk in FOREX trading? You need to set Stop Loss
(SL) and Take Profit (TP) on each entry.
Take Profit: To target and take profit. Can be divided into 20pips - 100pips.
Stoploss: To limit your loss. Can use this Stoploss, usually 30pips - 50 pips
from entry.
Using step win ratio 1:2 = 10pips(SL):20pips(TP) 1:3 =
10pips(SL):30pips(TP) and so on
31. Balance is the amount of funds in your account.
Equity = Balance + Floating Profit / Loss
If you do not have an open position then Equity = Balance
If you have an open position with a floating profit of USD 500, then:
Equity = Balance + USD 500 and if you experience a temporary loss (floating loss) of
USD 600, then:
Equity = Balance – USD 600 Margin is related to Leverage. If you choose 1:100
leverage then your guarantee fund is 1% of the contract value. If the leverage is 1:200
then the guarantee fund is 0.5% of the contract value.
If you open a regular (standard) account and trade EUR/ USD, GBP/USD, AUD/USD
or NZD/USD, then the contract value for 1 lot is USD 100,000
32. In this case, calculations for Margin is:
Margin = (USD 100.000) X (value of lot) X (percent of margin) X market price
Eg : standard account with leverage 1:200, you buy 2 lot EUR/USD at the price 1.0885, so your margin = (USD
100.000) x 2 x 0.5% x 1.0885 = USD 1,088.50
Free Margin is the difference between your Equity and your total Margin to open a position (if there are several
positions that are still open). If there is no position, it means that all funds in your account are free. Free Margin =
Equity – Total margin For example, your total funds are USD 5,000, and you have several positions that are still open
with a total margin of USD 1,750 and your profit position is USD 870, the loss is USD 240, then:
Equity = USD 5,000 + USD 870 – USD 240 = USD 5,630. Free Margin = USD 5,630 – USD 1,750 = USD
3,880
Margin Level is also known as Margin Call Level or the level at which you will be hit by a Margin Call. Margin Level
(in percent) is the ratio between Equity and total Margin.
Margin Level = (Equity / Margin total) x 100% Usually brokers set Margin Level = 80% – 100% to charge a
Margin Call (each broker is different). Suppose you are trading with a broker that applies the Margin Level 100% rule
for Margin Calls, and you still have USD 5,000 with several trading positions still open and total loss (excluding
margin), with a total margin of USD 500
34. Margin Call (MC) and Stop Out (SO) indicate the limit of a specified amount of equity,
when you experience a loss or a floating loss term.
Balance: The amount of funds in your account.
Equity = Balance + Profit / Loss
Profit floating: open position that is in profit.
Floating loss: open position that has a loss.
MC and SO are determined from the Margin Level.
Margin Level = (Equity / Total Margin) x 100%
MC = 100%, which means that if Margin Level = 100%, then you will be exposed to
MC. In this case, you will be hit by MC when Equity = Total Margin.
SO = 30%, which means that if Margin Level = 30%, then you will be hit by SO, and
your trade will be stopped. In this case, you will be SO when Equity = 30% of the total
Margin.
36. Download the trading platform on the website of any broker of your choice for free.
Easier and easier than before.
There are 2 types of platforms, Metatrade 4 and Metatrade 5. The popular
platform used by traders is Metatrade 4.
WHY?
1. User friendly.
2. Can open many charts at one time.
3. Can open several MetaTraders at one time even different brokers.
4. Easy to download.
5. Supports multi timeframes.
6. Supports many other currencies and pairs.
7. Available in Mobile and PC versions.
37. WHAT IS IMPORTANT TO OPEN A TRADING
ACCOUNT
1. I C/License/Passport
Register the details of the information with and make sure it is the same as the details stated in the IC, License
or Passport.
2. Utility Bills
Verification of the current residential address. Make sure the name and address are the same as on the bill.
3.Bank Account
Have an online bank account to make transactions and facilitate Deposit / Withdrawal.
4. Phone.
For security safety. Some brokers use an online banking system (Twofactor authentication). Each time a
Deposit/Withdrawal, A verification code will be sent via the owner's phone first.
5. Capital
Make sure the capital to start a trade is sufficient before trade because the choice of account type depends on
capital.
43. THE ART OF TECHNICALANALYSIS
The study and Interpretation
Between Analytical Phases that Flow Throughout The Foreign
Exchange Market
KHANPIPSTER
44. SUPPORT AND RESISTANT (SNR)
- Technical analysts use support and resistance levels to identify price points on a chart
where the probabilities favor a pause or reversal of a prevailing trend.
- Support occurs where a downtrend is expected to pause due to a concentration of demand.
- Resistance occurs where an uptrend is expected to pause temporarily, due to a
concentration of supply.
- Market psychology plays a major role as traders and investors remember the past and
react to changing conditions to anticipate future market movement.
KHANPIPSTER
48. TRENDLINE
The trendline is among the most important tools used by technical analysts.
Instead of looking at past business performance or other fundamentals,
technical analysts look for trends in price action. A trendline helps
technical analysts determine the current direction in market prices.
Technical analysts believe the trend is your friend, and identifying this
trend is the first step in the process of making a good trade.
KHANPIPSTER
50. ENGULFING CANDLE
Engulfing Candles, due to their distinct characteristics, provide potential reversal signals
for Forex traders
Here's how to spot them...
KHANPIPSTER
52. Fibonacci retracement is a method of technical analysis for determining
support and resistance levels. It is named after the Fibonacci sequence of
numbers, whose ratios provide price levels to which markets tend to retrace
a portion of a move, before a trend continues in the original direction.
Fibonacci is often used in trending market condition.
FIBONACCI RETRACEMENT
KHANPIPSTER
57. 1. Draw support and resistant level
2. Identify the market structure (HH HL LH LL)
3. Draw trendline
4. Draw the fibonacci retracement
5. Search for reversal candlestick (engulfing) at the right location
6. Make sure to do top down analysis from monthly timeframe to m15
7. Calculate risk and reward before entry
8. Beware of the news to avoid spike during trade.
TRADE STANDARD OPERATING
PROCEDURE (S.O.P)
KHANPIPSTER
58. TYPES OF FOREX TRADERS
This world was created for different types of beings, human beings are born with different attitudes and
lifestyles. That's how it is in forex, there are several types of trades used by traders according to their
respective souls.
Basically traders are divided into the following types:
1. Swing trader
2. Intraday trader
3. Scalping trader
Swing Trader
If you have a permanent job, maybe a swing trader is right for you. The swing technique only requires
30 minutes to 1 hour or maybe less for you to analyze the market before deciding to enter a position.
Usually this type of trader uses TF H1-H4-D1. This technique requires medium to large capital.
1. This technique requires a patient person. You may hold your position for days or weeks.
2. Requires a large SL - 100pips.
3. You do not panic if the market is against your position where you know it is just a retracement and
will move back towards your position.
59. Intraday
Do you have free time or are you not tied to work hours? Or are you self - employed? If Yes, I suggest you
become an intraday trader.
Basically this Intraday trade allows you to:
1. Know the value of daily profit
2. Prevent you from being charged -ve swap
3. Open and close positions in the same day
For intraday traders, you need to be aware of every daily news that will be issued through the economic
calendar. In this daily trade, you can use "trade with trend" techniques, retracement counter trend and
breakout (Snr, Pivot, Chart Pattern)
Scalping
If you have a lot of free time, maybe you can choose to be a scalper. Scalping techniques require faster time
and analysis that wisely change the bias of this market understanding quickly because you enter and exit
positions frequently in one day. This type of trader uses TF M1-M5-M15. This technique requires small or
medium capital.
61. MM stands for Money Management and is widely used in the forex world. The meaning of
MM in forex is very broad but the original concept was the method of capital management in
trading. Therefore, MM is one of the important risk management factors if you want to stay
longer in this trading world.
Types of MM in Forex:
3% x Total Capital = Risk Value
Risk Value / Number of Pips = Lot Value.
Example:
3% x USD 300 = USD 9
USD 9/50 pips = 0.18
Therefore the lot used is 0.18 and if the entry is hit by SL, then you have a loss of 3% and
have a balance of 97% to continue the trade. The number of Pips is taken into account
based on the SL value that is set based on the respective trading SOPs.
62. Percentage For Trade x Trade Capital
Trade Capital x Number of Pips = Lot Value.
Example: 10% x USD 300 = USD 30
USD 30 /5000 pips = 0.006
Often those who use this method will use a cent account because the number of lots is too small and can
only be executed in a cent account. Therefore, they only need to focus on executing the entry and placing
the TP and do not need to care where it is necessary to place the SL.
Mistakes Made By Traders
Most traders who are wrong in managing risk is that they put all their trading capital and rely on
endurance pips. Therefore, when they are MCs, they feel very frustrated and lose direction because all the
money invested has been spent as a result of MCs.
In conclusion the two methods outlined have their respective advantages and as a trader, you should not
have to follow the words of other traders, you just have to choose which method is more suitable for your
psychology.
63. RISK MANAGEMENT
Risk management means knowing exactly how much money can be invested at any
given time because you have calculated this amount. This is an attempt to assess the
possibility of losses in any trade and then take the right steps based on your risk
tolerance.
The reward-risk ratio indicates the amount of risk, or potential risk, versus potential
reward. Essentially, the risk -reward ratio outlines profit potential and gives traders
a way to measure and analyze trading potential. To determine the risk-reward ratio,
you need to know where you have set your stop loss and take profit orders. The risk
potential is the distance between the entry and the stop loss, while the reward is the
distance between your entry and the profit order
64. LOT SIZE TRADE RECOMMENDED
Lot is a unit measure that is commonly used by brokers in determining the trading size
of each entry. There are several lot fractions that are commonly used by brokers against
their clients. Generally the standard lot is equivalent to 100,000 units of purchase or
sale but to provide convenience and flexibility of trading style to traders who do not
have large capital, then smaller types of lots have been introduced. The types of lots are
as follows:
1. Standard Lot (1.00) = USD 10 per pips
2. Mini Lot (0.10) = USD 1 per pips
3. Micro Lot (0.01) = USD 0.10 per pips
4. Nano Lot (0.001) = USD 0.01 per pips
Learning the basics of technicalities such as lot trading is necessary to become a
professional trader. Therefore, you are advised to take some time to find out a little
about how to count trading lots in forex before acting in the real market.
68. HOW TO DETECT TREND
The trend in SNR Magic line technique is divided into 3
1. UPTREND
2. DOWN TREND
3. WEAK TREND
Trend Recognition Settings
Indi Bollinger Band
1. PARAMETER - Setting default
2. VISUALIZATION – Tick daily
3. Indi Moving Average
I. Period – 7
II. Period – 7
MA method – Simple MA method – Simple
Apply to – Close Apply to - Open
Style – RED Style – BLUE
3. VISUALIZATION – Tick daily
69. MARKING MAGIC LINE
1. Only in Timeframe H1
2. Marking CS 5 days Before
3. Marking between HIGH SHADOW and HIGH BODY 5 days before
4. Marking between LOW SHADOW and LOW BODY 5 days Prior
70. SOP MAGIC LINE
1. Open Daily Chart and determine the current Trend For each Currency Pair you
want to enter the market
2. Marking High and Low 5 days Before
3. Entry According to Trend Direction
4. Make sure each of your entries is in accordance with your money management
equity
5. Think about the losses that you are willing to bear before entering the market if
the market changes direction
73. TIPS BEFORE ENTERING THE MARKET
Chat or ask yourself
- What Setup for you to make an entry?
- Where is the appropriate Stop Loss (SL)
- How much LOSS are you willing to face from your equity/capital
THINK OF LOSSES FIRST, PROFITS WILL COME LATER ..
TECHNIQUE ZONE
I. SUITABLE FOR ALL PAIRS
II. REFER TO TF H1 WHEN MARKET OPEN
III. MAKE SURE YOU INSTALL A SEPARATOR PERIOD
1ST STEP : LOOK AT TF H1
2 ND STEP : MARKING HORIZONTAL LINE AT HIGH
LOW CS H1 TIME MARKET OPEN
3 RD STEP : INSERT RECTANGLE INTO THE ZONE THAT WAS MADE
74.
75. BREAKOUT BUY
- TF H1
- CS1 BULLISH BREAK BODY GOING ABOVE ZONE
- CS2 MUST BE BULLISH FOR CONFIRMATION
- CS3 INSTANT BUY
FOR THOSE WHO MISSED THE ENTRY, CAN PUT PO BUY LIMIT ABOVE
