LEARNFOREX TRADING
MASTER THE
FOREX MARKET
Learn the fundamentals of forex trading, from basic concepts to advanced strategies. Master currency pairs, order types, and risk management techniques.
FOREXBASICS
What is Forex Trading?
Foreign Exchange (Forex) trading is the buying and selling of currencies on the global market
Global Market
The forex market is the largest financial market in the world, with over $6 trillion traded daily
24/5 Trading
Trade currencies around the clock from Sunday evening to Friday afternoon
Currency Exchange
Profit from the changing values between different currencies
ORDERTYPES
Understanding Order Types
Learn about different types of orders and when to use them
Buy (Long) Orders
Purchase a currency pair expecting the price to rise
- Market Buy: Immediate purchase at current price
- Buy Limit: Order to buy at a lower price
- Buy Stop: Order to buy at a higher price
Sell (Short) Orders
Sell a currency pair expecting the price to fall
- Market Sell: Immediate sale at current price
- Sell Limit: Order to sell at a higher price
- Sell Stop: Order to sell at a lower price
UNDERSTANDINGSPREADS
Understanding Spreads
Learn about the difference between bid and ask prices in forex trading
What is Spread?
The spread is the difference between the buy (ask) and sell (bid) price of a currency pair
Types of Spreads
Fixed spreads remain constant, while variable spreads change based on market conditions
Cost of Trading
The spread represents the cost of trading and is how brokers make their commission
Spread Example
If EUR/USD has a bid price of 1.1000 and an ask price of 1.1002:
- Bid (Sell) Price: 1.1000
- Ask (Buy) Price: 1.1002
- Spread = 0.0002 (2 pips)
What this means:
- You buy at the higher price (1.1002)
- You sell at the lower price (1.1000)
- The difference (spread) is the cost of trading
CURRENCYPAIRS
Understanding Currency Pairs
Learn how currency pairs work and their role in forex trading
Currency Pair Structure
Base Currency (EUR): The first currency in the pair
Quote Currency (USD): The second currency in the pair
/ Separator between base and quote currencies
Reading the Price:
If EUR/USD = 1.2000, it means:
- 1 EUR = 1.20 USD
- If price rises to 1.2100: Euro strengthens against USD
- If price falls to 1.1900: Euro weakens against USD
Major Pairs
Most traded currency pairs involving USD
Minor Pairs
Pairs not including USD but major currencies
Exotic Pairs
Pairs including one major and one emerging market currency
PENDINGORDERS
Understanding Pending Orders
Learn how to use pending orders to automate your trading entries
Buy Limit
Place an order to buy at a price lower than the current market price
Current price: 1.2000, Buy Limit: 1.1950
Sell Limit
Place an order to sell at a price higher than the current market price
Current price: 1.2000, Sell Limit: 1.2050
Buy Stop
Place an order to buy at a price higher than the current market price
Current price: 1.2000, Buy Stop: 1.2050
Sell Stop
Place an order to sell at a price lower than the current market price
Current price: 1.2000, Sell Stop: 1.1950
Important Tips
- Always set your pending orders at key support and resistance levels
- Consider market volatility when placing pending orders
- Use pending orders to trade breakouts and reversals
RISKMANAGEMENT
Risk Management with Stop Loss & Take Profit
Learn how to protect your trades and secure profits with proper risk management
Stop Loss
A Stop Loss order helps limit potential losses by automatically closing your position if the market moves against you.
Example:
Buy EUR/USD at 1.2000
Stop Loss at 1.1950 (-50 pips)
Never trade without a Stop Loss - it's your safety net against large losses
Take Profit
A Take Profit order automatically closes your position when it reaches your desired profit target, securing your gains.
Example:
Buy EUR/USD at 1.2000
Take Profit at 1.2100 (+100 pips)
Set realistic Take Profit levels based on market conditions and analysis
Risk Management Guidelines
Risk per Trade
Never risk more than 1-2% of your account balance on a single trade
Risk-Reward Ratio
Aim for a minimum risk-reward ratio of 1:2 or higher
Position Sizing
Calculate position size based on your stop loss and risk tolerance