Forex trading for dummies

FOREX TRADING
FOR DUMMIES
How to Master the
Market in 30 Minutes.

2
Contents:
1. The Basics of Forex trading ……………………………….....3
 The Forex Market’s Characteristics ……………………………………..4
 Top Currency Traders and Major Currencies Traded ……………..4
 A Forex Trade …………………………………………………………………..5
 The key players in the Forex market ……………………………………5
2. Fundamental Analysis of the Forex Market ………………6
 Why should you analyze the market? ………………………………….6
 Fundamental Analysis ………………………………………………………..7
3. Forex Technical Analysis ………………………………………8
 2 main goals that every Forex Technical trader must have ….10
4. How to Read Forex Charts11
 Forex price charts, what do they mean and how to use them.11
 Pricing ..………………………………………………………………………….12
 The Chart Data Window …………………………………………………..12
 Chart Intervals & Time Frames. ………………………………………..13
5. Psychology and the Market …………………………………14
 Forex trading as a mind game .…………………………………………14
 It’s all about the numbers ………………………………………………..15
6. What is the Best Forex Trading Strategy ………………..17
 What Is A Forex Trading Strategy? ……………………………………17
 Which Forex Trading Strategy To Choose? …………………………18
7. 7 Steps to Choose a Good Forex Broker …………………19
8. The Best Forex Brokers Comparison And Reviews ……22
 eToro Review ……………………………………………………………..23
 AvaTrade Review ………………………………………………………..23
 Anyoption Review ……………………………………………………….24
9. Special Bonus: How to Succeed in Forex Without any
Skills and Experience …………………………………………25
 How to trade like a PRO from day 1 …………………………………25
 How to start copying ……………………………………………………….26

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The Basics of Forex Trading
Forex trading or Foreign Currency Exchange Trading refers
to the simultaneous trading. That is buying and selling of
two different currencies at the same time. It is done
between major financial institutions such as central banks,
small retail currency traders, large international companies,
government institutions, companies with international
operations, etc.
Based on the amount of money being traded on a daily
basis, the international Forex trading market is the world’s
biggest financial market. Everyday, Forex trading market
circulates an average of 1 trillion US dollars, an amount far
greater than the total volume produced by all the stock and
bond markets in the world.

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The Forex Market’s Characteristics
Forex trading is a kind of over-the-counter trading. It occurs
directly between two financial institutions or currency
traders. The trading markets may be interconnected but
there is no single unified market. Hence, there is also no
single or standard rate. Each rate or price depends on what
is being traded. However, the traders traditionally use nearly
similar rates.
Another characteristic of Forex trading is that it operates 24
hours a day from Monday to Friday. Thus traders can trade
any time of the day. Also, there is no need of an exchange
office, as the Forex market works through a global electronic
network where trading occurs over computer networks. This
characteristic also prevents delays in order execution that
could take a lot of time.
Forex trading market is also very competitive and is highly
volatile. This allows the parties to get low dealing costs and
better price.
Top Currency Traders and Major Currencies Traded
According to the Wall Street Journal the 10 major market’s
participants are responsible for 73 percent of the total Forex
trading volume. Among them are Deutsche Bank, UBS,
Citigroup, HSBC, Barclays, Merrill Lynch, J.P. Morgan Chase,
Goldman Sachs, ABN Amro, and Morgan Stanley. As for the
currencies the mostly traded ones are the US, Canadian, and
Australian dollars; Euro; Yen; and Swiss Franc.
The Bank for International Settlements made a research
study that shows that the most traded currency pairs in the
Forex market are EUR/USD, USD/JPY, and GBP/USD. The

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study noted that despite of Euro’s continuous growth, the
Forex trading market remains to be traded in US Dollars.
A Forex Trade
A trade happens when you accept the offered price and
when the dealer confirms it. There are always two different
currencies involved in every trade. Each currency has a price
expressed in another currency such as 1 Euro is equivalent
to 1.204 US dollars. In this example, the Euro trader sells
the Euros and buys the US dollars. There are no further
costs in the trade. There are no commissions and other fees
as well.
Large international companies participate in Forex trading
when they are buying or selling goods to other countries.
However, this kind of Forex trading evolves only a small
portion of the daily activities in the foreign exchange market.
Most of the trading activities are carried out by currency
traders who earn from the changes in value of a particular
currency.
The key players in the Forex market
BIS study shows that more than 50% of the Forex trading
transactions are happen to be the interbank transactions.
The amounts circulating in the Forex transactions are done
through the banks.
Central banks play a big role in the Forex trading market.
These banks control the supply of money, interest, inflation
and target rates in order to stabilize the Forex trading
market.

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Fundamental Analysis of the Forex
Market
Why should you analyze the market?
The Forex trading market is an around-the-clock cash
market where the currencies of nations are bought and sold,
typically via brokers. For example, you buy Euros, paying
with U.S. Dollars, or you sell Canadian Dollars for Japanese
Yen. Forex prices can change at any moment in response to
real-time events, such as political news, crude oil prices
changes, inflation, import and export increase, or industrial
production drop.
The Forex market traders typically use Forex analysis as a
way to predict currency prices movements. Forex analysis

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itself is divided into two types: fundamental and technical. A
fundamental analysis uses economic and political factors as
the means of predicting currency movements. A technical
analysis uses reliable historical data in order to forecast
these movements.
Fundamental Analysis
A fundamental analysis uses economic and political factors,
such as housing stats, the unemployment rate, or inflation,
to predict the changes in the Forex market. Fundamental
analysis is concerned with the reasons or causes for the
price changes. Many Forex traders who rely on fundamental
analysis plan their trading strategies around a number of key
U.S. Government economic indicators. Some of these
indicators are the Gross Domestic Product (GDP), Foreign
Exchange Rates, Import and Export Prices, Industrial
Production/Capacity Utilization, the Composite Index of
Leading Indicators, Consumer Credit, the Consumer Price
Index (CPI), Retail Sales, Housing Starts, the Employment
Cost Index, and Consumer Confidence.
All of these Federal economic indicators have a marked
effect on both the stock market and Forex. Some of these
indicators are released weekly, while others are released
monthly or quarterly. Their sources include the Federal
Reserve Board, the U.S. Bureau of Labor Statistics, the U.S.
Department of Agriculture, the U.S. Bureau of Economic
Analysis (BEA), and the U.S. Census Bureau.
The best way to be updated about the most important
economic data for your favorite currencies is to use an
economic calendar. One of the best economic calendars may
be found on the www.ForexFactory.com website.
*Learn how to use the Forex Factory calendar here.

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Forex traders must take other economic indicators into
consideration as well. The world's leading economies (for
example, the United Kingdom, Japan, France, and Germany)
also release their own economic indicators that often have a
significant impact on the Forex market. For example, leading
economic indicators in the United Kingdom include Housing
Prices, Gross Domestic Product (GDP), Vehicles per 1,000
People, Telephones per 1,000 People, and the Percentage of
People Employed in Agriculture
Forex Technical Analysis
The Technical Analysis is the easiest and the most precise
way of analyzing the Forex market. All available information

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on any particular currency and its impact on the market and
the traders are already reflected in the currency's price.
The foreign exchange market is mostly composed of trends
and therefore is a place where technical analysis can be
used very effectively. Experience has shown that history
repeats itself over time, certain chart patterns become
consistent, predictable and very reliable. The problem is
being able of spot them.
Prices move in trends and those traders who don't know this
fact obviously don’t need to implement the technical analysis
to analyze the market as they don’t realize its importance.
But, over 100 years of research has shown that those who
trade "with the trend" greatly improve their chances of
winning in the Forex markets.
Many times finding the main trend will help you become
aware of the overall market direction and offer you better
visibility, especially when the shorter-term movements tend
to clutter the picture. And many times following the trend
will bail you out of an initially uncertain entry point. The
main question you may be asking yourself by now is how
does technical analysis help you determine what the trend of
the market is and how does it help your efforts to trade with
the trend and not against the trend?
It is important to mention that no one is claiming technical
analysis being a magic tool of trading. And if you ask, which
indicators are the best in Forex trading, the answer is none.
Technical indicators should simply be the components of
your overall customized / personalized trading system and
not the systems themselves.

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2 main goals that every Forex Technical trader must
have:
1. To figure out the price action of the currency pair. Price is
the main concern. If the EUR/USD is at 1.3226 and goes to
1.3219, 1.3112, 1.3008 - the market is in a down trend.
Despite what every technical indicator might predict, if the
trend is down, stay with the trend. Indicators showing where
price will go next or what it should be doing are useless. A
trader need only be concerned with what the market is
doing, not what the market might do.
2. Always remember that technical indicators are only giving
you confirmations based on what the market is telling you.
So listen and pay close attention to the market and let it
dictate which method you will use and which tool you will
pull out of your bag of strategies and techniques. Only by
listening to the markets you will be able to conquer it
successfully and become a profitable trader.
A popular website Investopedia.com states that "In a
shopping mall, a fundamental analyst would go to each
store, study the product that was being sold, and then
decide whether to buy it or not. By contrast, a technical
analyst would sit on a bench in the mall and watch people
go into the stores. Disregarding the intrinsic value of the
products in the store, his or her decision would be based on
the patterns or activity of people going into each store."
Some Forex traders depend on fundamental analysis while
others depend on technical analysis. However, many
successful Forex traders use a combination of both
strategies. However, the important point to remember here
is that no approach or combination of approaches is 100%
certain.

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How to Read Forex Charts
Forex price charts, what do they mean and how to
use them?
One of the most important things you should do before
starting trading is: learn to read the charts as charts
represent the lifeblood of the market. I admit that reading
charts, and interpreting patterns, are more an art than a
skill. Base and apply your entry and exit decisions on your
own combined methods of technical and fundamental
analysis.
Forex charts, are easier to interpret and to use. They reflect
a slower moving, stable economy of a country, compared to

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the stock market, with its daily drama of company reports,
Wall Street Analysts and shareholder demands. Unlike
stocks, currency charts do not spend much time in trading
ranges and have the tendency to develop strong trends.
Furthermore, Forex with its 4 Mayor currencies is easier to
analyze than tens of thousands of stocks. (Mayor currencies
are: USD/JPY, EUR/USD, GBP/USD and USD/CHF).
Understanding just a few basic points about the technical
analysis of currency chart can lead to increased profit
potential.
Pricing
Price reflects the perceptions and action taken by the market
participants. It is the dealing between buyers and sellers in
the Over-The-Counter (OTC) or “interbank” market that
creates price movement. Therefore, all fundamental factors
are quickly discounted in price.
By studying the price charts, you are indirectly seeing the
fundamental and market psychology all at once, after all the
market is fed by two emotions - Greed and Fear, and once
you understand that, then you begin to understand the
psychology of the market and how it relates to the chart
patterns.
The Chart Data Window
Most of the charts will display a small box of data usually
called a display window which will contain the following
items:
H = Highest Price
L = Lowest Price
O = Opening Price
C = Close Price (or Last Price)

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The most common types of price bars, used in Forex
trading, are the Bar Chart and the Candlestick chart:
1. Bars Charts is when the price bars are a linear
representation (a line) of a period of time. This enables the
viewer to see a graphic representation summarizing the
activity of a specific time frame. Each bar has similar
characteristics and tells the viewer several important pieces
of information.
First, the highest point of the bar represents the highest
price that was achieved during that time period. The lowest
point of the bar represents the lowest price during the same
period. Regular bars display a small dot on the left side of
the bar which represents the opening price of the period and
the small dot on the right side represents the closing price of
the period.
2. Japanese Candlesticks, or simply Candlesticks as they are
now known, are used to represent the same information as
Price bars. The only difference is the open and close form
the body of a box which is displayed with a color inside.
A red color means that the close was lower than the open,
and the blue or green color represents that the close was
higher than the open. If the box has a line going up from
the box it represents the high and is called the wick. If the
box has a line going down from the box, it represents the
low and is called the tail.
Chart Intervals & Time Frames.
A chart time scale, or time frame, basically refers to the
duration of time that passes between the open and the close
of a bar or candlestick. For instance, with your broker

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software, you will be able to view a currency pair, in a 1-
hour time frame over a 2-day period, 5-day period, 10-day
period, 20-day period and 30- day period. Most of the short-
term time intervals (5-min and 1-min charts) are used for
entry and exit points and the longer-term time intervals (1-
hour and daily charts) are used to see where the general
trend is.
Psychology and the Market
Forex trading as a mind game
When it comes to trading on the Forex market, winning is a
matter of the mind rather than mind over matter. Any trader
who’s been in the game for any length of time will tell you

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that psychology has a lot to do with both your own
performance on the trading floor and with the way that the
market is moving.
Playing a winning hand depends on knowing your own mind
and understanding the way that psychology moves the
market. Studying the psychology of the market is nothing
new. It doesn’t take a genius to understand that any arena
that rides and falls on decisions made by people is going to
be heavily influenced by the minds of people. Few people
take into account all the various levels of mind games that
motivate the market.
If you keep your eye on the way that psychology influences
others, including the mass psychology of the people that use
the currency on a daily basis, but neglect to know what
moves you, you’re going to end up hurting your own
position.
The best Forex coaches will tell you that before you can
really become a successful trader, you have to know yourself
and the triggers that influence you. Knowing those will help
you overcome them or use them.
It’s all about the numbers
Let me break it down into more manageable pieces for you.
Anything involving winning or losing large sums of money
becomes emotionally charged. All right, you’ve heard that
trading in the Forex market is a mathematical game. Plug in
the right numbers, make the right calculations and you’ll
come out ahead. So why is it that so many traders end up
on the losing end of the market? After all, everyone has
access to the same numbers, the same data and the same
info? If it’s math, there’s only one right answer, right? The
answer lies in interpretation.

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The numbers don’t lie, but your mind does. Your hopes and
fears can make you see things that just aren’t there. When
you invest in a currency, you’re investing more than just
money, you make an emotional investment. Being ‘right’
becomes important. Being ‘wrong’ doesn’t just cost you
money when you let yourself be ruled by your emotions, it
costs you pride.
Why else would you let a loser ride in the hope that it will
bounce back? It’s that little thing inside your head that says,
“I know I’m right on this, dammit!”
Bottom line: You can’t keep emotions out of the picture, but
you can learn not to let them control your decisions.
To most people, being right is more important than making
money. Here’s the deal. The way to make real money in the
Forex market is to cut your losses short and let your winners
ride. In order to do that, you have got to accept that some
of your trades are going to lose, cut them loose and move
on to another trade. You’ve got to accept that picking a loser
is not an indication of your self-worth; it’s not a reflection on
who you are. It’s simply a loss, and the best way to deal
with it is to stop losing money by moving on, and really
move on. Moving on means you don’t keep a running total
of how many losses you’ve had, that’s the way to paralyze
yourself.
This brings us to the next point: Losing traders see loss as
failure. Winning traders see loss as learning.
Winning traders see loss in a certain way. They haven’t
failed; they’ve learned something new about the way that
they and the market work. Winning traders can look at the
big picture while playing in the small arena. But how do you

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keep on trading when you’re losing in trade after trade?
Simple, just remember that one trade does not make or
break a trader. Focus on the trade at hand, follow the
triggers that you’ve set up, but define yourself by what
really matters - the overall record.
What is the Best Forex Trading
Strategy?
What Is A Forex Trading Strategy?
A Forex trading strategy is a set of rules which are aimed to
ensure that you are trading in a way that is free of bias and
the influence of emotion. Most beginner traders will look to
learn a Forex trading strategy whereas more experienced

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traders will eventually move to build a trading strategy of
their own.
A good Forex trading strategy should look to encompass and
cover for all possible eventualities which the markets may
through up. In that respect, they should comprise of rules
which govern, amongst other things the following:
1. Which currency pairs to trade
2. When exactly to enter and exit a trade
3. Where to place Stop Losses and Take Profit rates
Forex trading strategy must always be tested against
historical data (known as back-testing). Beginner traders,
when looking to purchase a Forex trading system, should
always ensure that the system was properly back tested and
that the results are genuine.
Which Forex Trading Strategy To Choose?
This will depend upon your trading style. Some traders are
swing traders and will look to keep positions for days, weeks
or even months. Others prefer a day trading style and will be
in and out of a trade within the same day. A typical swing
trading strategy will look to take larger moves ranging from
100-300 pips over a period of a few days or weeks.
On the other hand, an intraday Forex strategy looks for
smaller opportunities ranging from 25-50 pips. Forex
scalping strategies have become popular of late as well.
Scalping is a trading style which looks to take profits on very
small price changes, usually soon after a trade has been
entered into and becomes profitable. It is a strategy that
does not look to capture 50+ pip moves; rather it is more
about watching the price and getting in and out of trades for
quick 5 pip moves which little by little add up. While this

19
might sound risky, it can be quite a low risk strategy if
performed correctly.
As with all trading strategies, the most important parameter
which has to be addressed here is money management.
Having a strict exit strategy and rules on how much of your
equity to risk per trade must be clearly outlined.
7 Steps to Choose a Good Forex
Broker
The more we live the more we find out that we are
dependent on many things besides our brain. Smartness will
only get us so far, but unless we make use of systems set
up for our convenience we are apt to fail. This is so with the
Forex market. The way how the market works means we

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have to work through a broker to get our trades started and
completed.
You can find Forex brokers in every part of the world just as
you will find currencies traded in almost every corner of the
globe. However, you should consider a few points when you
go out shopping for the right broker to help you with your
trades.
1. Qualifications. Probably the most important thing of all is
ensuring the Forex broker you use has the correct
qualifications. Therefore, choose a broker registered with the
Commodity Futures Trading Commission (CFTC) as a Futures
Commission Merchant (FCM). This means that you have
legal protection against any abusive trading practices and
scams that may arise.
2. Is the broker regulated? This means that when you sign
up to use their services you will have protection and
insurance against any internal fraud. Also, your funds will
remain separate from the broker's operating funds.
3. What business model does the broker use? Some brokers
are market makers while others are ECN brokers, providing a
dealing desks for many traders.
4. Look at the types of spreads they offer. The spread is the
difference between the bid and ask prices of the currencies
you trade. Brokers do not make a commission on your
trading, instead they take the spread as compensation. Your
broker may also offer fixed or variable spreads, and they can
be different for large accounts and mini accounts.
5. Slippage. Can they provide you with details of just what
slippage they would expect to occur during normal and fast
moving markets?

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6. Margin requirements. What is their margin requirement?
That is, what percentage of the investment in your trades do
they expect you to pay to open a trade. You also want to
know about their margin calls, and the time you need to
respond to such calls.
7. What is their Rollover Policy? Do they have any minimum
margin requirements which they use to earn interest on any
overnight positions? Plus, do they have any other
requirements or conditions about you earning interest on
any rollovers?
Once you have done your research and have selected one or
more Forex brokers, then it is time to set up your trading
account. When your funds are credited you can start
trading.
Remember to read carefully the trading instructions to know
how the broker can help you manage your trades. If you
overlook some relevant details, you can lose money on your
first trade.
So take the time to read the details and ask the brokers or
their support staff any questions you may have before you
open your first trade.

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The Best Online Forex Brokers
Comparison and Reviews
In the brokers comparison table below you will find the
oldest and the most popular brokers in the market. We have
researched and picked up only regulated brokers with the
most positive feedbacks left by their clients:
Broker Min Deposit Bonus Free Demo
$50 Yes Yes
$100 $1,200 Yes
$200 Yes Yes

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If you want to learn more about the brokers, below you will
find their detailed reviews that will help you choose the best
broker for you to trade in the Forex market.
eToro Review:
eToro is the biggest social investment
network in the world. The company has
developed a unique Forex trading
platform, fitting both novice and experienced traders alike.
Its user friendly trading interface, and various trading
features make the vast world of Forex trading accessible to
new traders. eToro is one of the most popular trading
communities in the world.
eToro is one of the most popular trading communities in the
world. You can chat with other traders, see how they trade,
follow them and even copy their trading positions. eToro is
by far the perfect choice for novice traders who want to
learn how the best traders are trading and improve trading
skills.
Click here to join eToro now >>
AvaTrade Review
AvaTrade is one of the world’s leading
Forex broker. The company is dedicated
to creating the best trading conditions
and ultimate trading experience to its customers. With 24/7
professional support, 3 different trading platforms and high
level of funds security, AvaTrade is built to give the

24
individual trader a full range of trading tools and instruments
for your successful trading.
AvaTrade is a great place to grow from a novice trader to a
professional Forex guru. A friendly interface, free live
webinars, trade leader’s investment program and free Forex
trading course are available to increase your trading
experience and help you reach high results when trading
Forex online.
Click here to join AvaTrade now >>
Anyoption Review
Anyoption™ is the world's first, most
professional and most reliable binary
option trading platform with hundreds
of thousands of loyal users from around the globe.
Anyoption’s website and mobile application offer exciting
ways to make big, fast profits.
Anyoption is an advanced trading platform for binary options
and other innovative derivatives, allowing customers to trade
and profit from fluctuations in financial markets, whether
positive or negative. Traders can earn huge profits within
minutes, with a simple click of a button.
No experience is needed as the products are suitable for
professional traders and beginners alike. Trading is available
even when markets are closed, and profits can be as high as
380% per trade!
Click here to join Anyoption now >>

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Special Bonus:
How to Succeed in Forex without
any Skills and Experience
Today many people start trading Forex with a purpose to
increase their income and make more money. In order to
trade successfully you need to analyze graphs, be updated
about important events and news of the world’s economy. It
is not a secret that Forex trading is not an easy job and
involves high risk of losing money if you don’t know what
you are doing.
How to trade like a PRO from the day 1
If you are one of those people who is looking for the best
way to invest your funds for profits without trading

26
experience and skills, eToro CopyTrader would be the best
solution for you.
eToro CopyTrader tool is absolutely revolutionary. With
CopyTrader, you can follow other traders and copy all their
trades with a single click of a mouse. Instead of reading
news and spending much time with the technical analysis of
the charts, you just automatically COPY successful traders.
So all you need to do is to identify successful traders in
eToro Network and then copy their actions with eToro
CopyTrader. So this sounds almost as if you could copy the
best chess players in the world and win every game.
How to start copying
Follow the steps below to start copy the best traders
immediately:
1. Register with eToro and log in to your account. The
registration is free and will take you 15 seconds to complete:

27
2. Click on the PEOPLE on the top left corner of the page to
see the best eToro traders’ rankings.
3. A new window with the list of the best traders will
open. Here you can see the performance of the traders, how
much they are making (under Gain), how many people copy
them (under Copiers).
4. We recommend choosing those traders who have higher
gain and higher number of copiers.

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5. Click on the name of a trader to open his/her profile and
then press the COPY button on the left.
6. In the new opened window set up the amount you wish
to copy your trader with and press the button COPY
TRADER. (You need to have at least $50 in your trading
account. You can use up to 20% of your balance to copy a
trader.)

29
7. Your CopyTrader is set up. You can view the performance
of the copied traders in your account in real time, anytime.
eToro CopyTrader will automatically copy all trades that
your copied trader will open and close. You will make as
much as your copied trader in percentage ratio. For example
if the trader you copy makes 68% profit a month, you will
make the same profit automatically. Imagine how amazing it
is to trade like a PRO without analyzing any graph!
Click here to join eToro CopyTrader now >>
THANK YOU FOR READING AND
GOOD LUCK IN TRADING!
BY Forex Trading In Singapore, 2015

Forex trading for dummies

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