learn forex in 15 min from a pro trader
TRANSCRIPT
VOL II
BEST FOR
BEGINNERS
FOREXTRADING
in 15 minutes
If you want lots of theory and complicated analysis, you picked up the wrong e-book! You don't need another classic, boring "learning material". What you need are easy-to-apply
strategies and ready-to-use tools to help you become a better trader faster.
The popularity of the Forex Basics & Secrets in 15 Minutes e-book has encouraged us to create a second upgraded edition. We received a lot of great feedback about the first e-book (thank you!) and we hope that everyone will enjoy the new strategies in this second edition.
This e-book will help you learn Forex trading skills in the fastest time possible! It doesn't matter so much what education and background you have. Our program has shown interesting results: people with no previous financial market experience often delivered better performance than those with the experience! Watch the TV series “Million-Dollar Trader” and this fact is confirmed as well.
Gone are the days when you have to have thousands of dollars to participate in the Forex market. Now, you can start trading with as little as $100! You can also forget about spending years reading piles of brain-busting books on economic analysis. We have gathered and filtered the most pertinent information and strategies that will let you make money.
With Forex, you can be free. You can live and work anywhere in the world, be free from the routine, and not answer to anybody!
About this e-book
Trading involves risk. Leveraged trading has large potential rewards, but also large potential of risk. Be aware and accept this risk before trading.
30 days after you read this e-book, your friends will notice your success!
forex market at a glance
Make money even in times of crisisWhile the stock market and commercial bank deposits are in deep depression during the crisis, Forex profits, because any change in currency can be used to make profit. A falling market is as profitable for Forex trading as a developing one.
Take your money whenever you wantA $50 billion market isn’t just a miraculously beautiful number – it is also what ensures that you can sell or buy any amount of currency you wish at any moment.
Work while lying in a hammockAll you need to start making money is a computer or a smart phone and an Internet connection. Your work space and goals are up to you!
Easy rulesUnlike the stock market with tens of thousands of different shares, Forex works with 8 basic currencies, which are the center of most trades. Moreover, there are significantly less factors that influence currency exchange rates than in the stock market.
Start with $100Unlike other finance markets, Forex doesn’t require big savings for you to take part. You can have significant results by starting with just $100 - $200.
$100
breaking the biggest forex myth
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London
EST time
MON TUE WED THU FRI SAT SUN
New YorkSidney
Tokio
Best time
We strongly advice you to avoid all resources that tell you Forex market is a fairy-tale place where you can trade 24/7! The timing in forex trading is crucial!
The Forex market is open 24 hours a day, but it is not active all this time! In Forex trading money is made when the market is active (when traders are bidding on the prices) so it is crucial for you to learn about the most productive hours of the day and of the week for trading the forex!
There are three major trading sessions of the Forex market: London, US and Tokyo session. The busiest times are when the sessions overlap as traders can
then purchase currencies from different continents. The Forex market of London is usually the most active as it involves many countries of the European Union. The US market comes next, so the time when the London session intersects with the US session usually provides the biggest returns. Expert traders consider 10 AM to be the best time as this is the period when the London market is preparing to close the trades and traders are getting ready to move to US market. This creates big swings in currency prices thus opening great opportunities for profit.
THE BEST TIME OF THE WEEK TO TRADE FOREX
According to research, the biggest movement in the four major currency pairs (EUR/USD, GBP/USD, USD/JPY, USD/CHF) is observed on Tuesdays and Wednesdays. Fridays are busy as well, but only until 12:00 PM and during the second half of the day the movements can be very unpredictable.
USD/CHFEUR/JPYUSD/CAD
EUR/USDGBP/USDUSD/JPY
exchangeforeign
The most common currency pairs
Forex is an international currency market with daily deals worth $4 billion.
The trade in Forex occurs between two currencies, because one currency is being bought and another – sold at the same time.
FOREX
TOP PAIR
EUR/USD
dealsof all1/3
EUR/USD
1.30011.3000Selling price (Bid) Buying price (Ask)
Base Currency
QuoteCurrency
28%
EUR/USDEUR/USDPoint (Pip)The fourth unit after the decimal point, which is the smallest unit of an exchange rate.
SpreadThe difference between the sell quote and the buy quote (in pips).
The smaller the spread, the more liquid the currency!
spread
point
forex glossary
What influences exchange rates?
How the Euro exchange rate dropped
Dec 12011
Nov 12011
EUR/USD
Example
Prime Ministerof Greece announces
referendum
The EU cannot agree upon
changes in the treaty
Central banks agree to stimulate liquidity of finan-cial transactionECB announces
a new president
Berlusconi resigns
Source: Morgan Stanley Research, Bloomberg.
Finance circulationInterest ratesMandatory reserve funds
GDP, inflation, debtSales amountsInterest from investors
Stability of governmentsPublic statementsChange of officials
Central banks State economics Politics
leverage & Lots
Term Leverage
Term Lot
Stock market Forex market
Through the use of leverage, traders are able to invest a small amount of money and trade much larger deal sizes. This is useful because the movement in currency rates can be very small, and larger trades represent larger profits/losses for every pip change in the rate.
Leverage allows you to trade with more money than you have in your account, because you effectively “leverage” your free balance to open a larger trade. Leverage is shown as a ratio, for example 1:100. Note that leverage amplifies both potentialprofits and losses alike.
In Forex, all transactions can be conducted via standard, mini, and micro lots. Each lot size accounts for a different measure of units of the base currency, which in turn presents a different pip value. Below is a simple chart to illustrate the differences in lot sizes, measured in units, volume for the major pairs where the base currency is USD.
The smaller contract sizes have a broad appeal to beginner investors who do not want to take on a disproportional amount of risk. Generally speaking, mini account holders have access to the same materials as the regular account holders such as charts, trading plat-forms, support, etc. Those traders who are looking to get started in the forex market should consider opening a mini account because of the smaller contract sizes.
Maximum leverage 1:2 from 1:50 to 1:400
Varying lot sizes
Standard Lot 100,000 units 1 1 pip = $10
Mini Lot 10,000 units 0.1 1 pip = $1
Mini Lot 10’000 units 0.1 1 pip = $1
Units of base currency
Pip Value(base: USD)Volume
Micro Lot 1,000 units 0.01 1 pip = $0.10
How leverage works
You decide to buy 100,000 EUR and sell USD at a rate of 1.4100. Do you need more than 100,000 US dollars to open the trade? No! With a leverage of 1:50 you will need to put down only 1/50 of the deal size as the margin, which works out to $2,820.
Calculate the margin:Leverage 1:50Divide 100,000 by 50=2000 EUR2000 EUR x 1.41=$2,820Margin=$2,820
This is the amount that will be used to cover your potential losses. In other words, the margin is the actual amount that you are risking to lose if the trade goes against you.
Leverage is a very aggressive investment strategy and only those with high risk tolerance and a long time horizon should consider leverage.
Use leverage appropriate to your comfort level: Using 1:50 leverage means that a 2% adverse move could wipe out all your equity or margin. If you are a relatively cautious investor or trader, use a lower level of leverage with perhaps 1:5 or 1:10 leverage.
The leverage available on positions carried over the weekend may vary.
Maximum leverage limits vary in different countries, varying from 1:10 to 1:400.
Example Tips & Warnings
Leverage“Leverage” simply means borrowed funds. While the high degree of leverage used in forex trading magnifies returns and risks, a few safety precautions used by professional traders may help mitigate these risks.
Trading strategy – leverage
1.dec2011
1.nov2011
1.3500
1.3000
1.4000
EUR/USD
Going short on euro You expect the euro to fall against the US dollar.
Open @ 1.3800
Close @ 1.3108
Case B: Leverage 1:200You open a position of 1 lot, which requires an initial deposit of (€100,000*1.3800/200) $690.
You were right. Euro depreciates against the dollar to 1.3108 and you decide to close your trade and take your profits.
Result: The euro fell by 692 pips (1.3800 - 1.3108 x 10’000). Your profit is 692 x 1(lot) x 200(Leverage) = $138,400
Investment: $690Profit: $138,400
Case B: Leverage 1:50You open a position of 1 lot, which requires an initial deposit of (€100,000*1.3800/50) $2,760.
You were right. Euro depreciates against the dollar to 1.3108 and you decide to close your trade and take your profits.
Result: The euro fell by 692 pips (1.3800 - 1.3108 x 10’000). Your profit is 692 x 1(lot) x 50 (Leverage) = $34,600
If the trend moves against the investor, leverage magnifies losses the same way it magnifies returns in the examples above.
Investment: $2,760Profit: $34,600
how to read graphs
time X
time X
Let us look at a daily graph. What do most traders do when they see such a curve? They assume that it’s the beginning of a downward tendency and bid on the drop of the currency exchange rate. And they’re wrong!
Now let’s look at the same currency over a longer period of time.
We see that the daily shift was inconsequential to the long-term tendency as it is upward and not the other way around.
MULTIPLE TIME FRAME ANALYSIS
The market can be analysed in several time frames: 10 minutes, hours, days, weeks. It may often seem that these indicators are contradictory. However, they aren’t, you just need to combine their readings. Analyses of longer time periods show tendencies, ignoring accidental changes, whereas daily and hourly graphs help in choosing the moment to open and close positions.
For successful and precise market analysis, you must use at least 2-3 time frames!
Example
Conclusion
November3 10 17 24
1500
1550
1600
Aug Sep Okt Nov Dec
1300
1600
1900
8 FOREXSTRATEGIESYOU NEEDTO KNOW
1. The Double-Red Strategy
The double-red strategy is a short-term reversal system based on price action and resistance. The trade is planned on a 5-minute chart and is signaled when twobearish candles form following a test ofresistance.
1. Choose an asset and watch the marketuntil you see the first red bar. Then waitfor a second red bar.
2. If the second red bar closes lower thanthe first red bar, then it’s a jackpot.
3. Usually, what happens is that the thirdbar will go even lower than the secondbar. This is the point where you shouldopen a short position.
are taking place
Watch outDescription
Resistance level
Sell
1.
2.
2. copy trading STRATEGYCopy the trades of experienced traders.This is the best solution for beginners who don’t have much free time.
1. Choosenetwork
2. Choosetraders to copy
3. They makemoney for you
Social trading networks like eToro or Ayondo offer an opportunity to follow the best traders and copy their trades with a click of a button. Choose the traders you like, and then sit back and watch them make profit for you. This is also a good way to learn Forex strategies in a real-life trading environment.
EASIESTstrategy
best for dummies
Key elementsSupport is the level at which the price seldom falls below; resistance is the level the price seldom exceeds. Each time the price hits the resistance or support, the price appears to hit a wall and reverses. At support levels, the number of buyers gen-erally exceeds the number of sellers; this pushes the price back up. At resistance levels, the number of sellers exceeds the number of buyers causing the price to go back down.
Description
3. Support & Resistance
Resistance level
Support levelBuy
Sell Sell Sell
Buy
one price bar closes below/above the support or resistance.
line or below the resistance, but not too close to avoid common movements and flat widening.
Key elementsWhen a price trades within a range for some time, sooner or later, there will be a breakout either up or down. This breakout is usually very fast and volatile. Therefore, it is possible to open a trade in the same direction.
Description
4. Breakouts
Resistance level
Support levelBuy
2. Upper shadowat least 2x the sizeof the real body
3. Confirmationof a downtrend.
A Pinocchio bar is a candlestick bar that has a very small body and a very long wick (nose). It is also called Shooting Star, Hanging Man, Hammer and Inverted Hammer. You may remember that Pinnochio’s nose grew long when he was lying. The same happens with this strategy: when the wick is longer than the body, this tells us that the market is deceiving us and that we should trade the opposite way.
The entry point varies: some traders prefer to wait for the next candle to retrace to the 50% Fibonacci level of the Pin bar, while others enter immediately after the Pin bar closes. A long wick indicates strong selling pressure; a long tail suggests intense buying power.
bearish Pinocchio signal must come after an uptrend (see image above). Trying to trade the bearish Pinocchio pattern in neutral market conditions can be risky.
Key elements
Watch out
Description
Bearish Pinnochio Sell
5. The Pinocchio Strategy
68%win
rate
6. The 1-2-3 Strategy
1. After an uptrend or, at least, a strongmove up, look for the 1 – 2 – 3 pattern toform, starting, of course, with the firstpeak (1).2. If a counter-move starts, mark thebottom of that move with (2).3. If the new move up does not surpasspoint (1) and starts turning down, markthe highest point of this new move upwith (3).
4. The pattern is now complete. There isstill a very important rule that must beobserved: the price must move down tobreak the low created at point (2). If thathappens, all of our conditions are met andwe enter the trade with a short position.
Description
If a peak is not surpassed,it becomes point 1.
1
Point 2 marks the end of a counter move.
2
Point 3 does not gohigher than point 1.
3 Sell
A sell signal is indicated when the spot rate crosses under the moving average.The fact that the "double-top" chart pattern occurs at roughly the same point, reinforces the sell signal.
A buy signal is indicated when the spot rate crosses over the moving average. The "reverse head and shoulders" pattern (as seen in the chart above) confirms the buy signal.
Key elementsUsing moving averages to determine trend direction is the oldest form of technical analysis and remains one of the most commonly used indicators. Moving averages "smooth out" fluctuations and help distinguish between typical market fluctuations and actual rate reversals.
Description
7. Moving average
Sell
Buy
Moving Average
when working with oscillators to avoid bigger losses if a breakout should happen.
Key elementsOscillators can provide clues when the market’s momentum is slowing down, which often precedes a shift in the trend.
Momentum shifts directions when the two lines (blue and red) cross. Therefore, a trader takes a signal in the direction of the cross when the blue line crosses the red line.
Description
8. Oscillators
Extremum
Extremum
Buy
Sell
top 10 expert tips for success
An essential mistake beginners make is closing the transaction too soon and thus not taking advantage of the full profit potential. Trends last longer than they might seem at first!
6 Don’t stop the profit
Transactions against a trend usually result in loss. Wait for a beneficial tendency and then make your move!
7 Don’t play against the trend
If you still aren’t confident about your decisions, choose a platform that lets you follow leaders and copy their transactions.
8 If in doubt, follow the leader
Don’t hold unsuccessful positions open for a long time. Experience shows that it’s best to close them early and move on to others.
Close the unsuccessful
Beginners often don’t know that when trends start, they develop quickly because they are increased by the number of traders following them. Use trends in your favour!
9
10
Trends have momentum
Don’t open many positions at the same time. It’s better to choose fewer positions, but weigh each of them carefully.
1 Start gradually
People often forget to limit their loss and therefore have to step out of the game very soon. With the Stop-Loss Order, you will be able to control the situation even if the rates change unexpectedly.
2 Stop-Loss order
Specialists advise against risking more than 1/6 of your free capital when you aren’t completely confident.
3 Rule of 1/6
Differentiate the time frames of analysis. Weekly graphs are used to observe trends while daily and hourly graphs are best used to observe the best time to open and close positions.
Multiple time frames
Each good trader has their own plan, and the best traders make an effort to hold onto it. Those who have the time, make daily transactions, others choose long-term strategies. Keep it steady!
4
5
Stick to the plan
There are many companies that offer margin-trading (Forex) services. Without the knowledge of the essential criteria, it’s easy to get lost in the details of a large offer and choose an unsuitable or, as a worst-case scenario an unreliable service provider. What is most important when choosing a platform provider, and how does one orientate themselves in so many offers? Below is a compilation of some advice from several professionals in the Forex market, which can be narrowed down to four basic criteria:
Reputation of the companyEvaluate the popularity of the platform provider – whether there are any complaints about the services and what those complaints are, what the customer service is and whether or not profit payments are ever delayed.
Convenience of the user interfaceYou have to evaluate how easy and convenient it is to use the platform and what analytical options and extra tools it uses. It is best to check the user interfaces by opening demo accounts offered by the best platforms.
Commission for paid transactionsThe commission payments for transactions are described by the spread, which is the difference between the bid and offer price of the currency. The bigger the spread, the more you will have to pay the service provider. Commission payments are usually higher for independent platforms rather than commercial bank Forex platforms.
Money transactionsThe best platforms provide the opportunity to use wire transfers or other online payment operators such as PayPal or Money Bookers, which are the most convenient and easy methods of receiveing funds.
1 2 3
how to choose the right broker
* eToro is a Social Investment Network.**Plus 500 is a CFD only Service. Your Capital may be at risk.
Easy Forex
eToro*
Platform Min. Deposit Max. Leverage Rating
$50 1:400
$25 1:200
visit sitevisit site
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2
1
4
3
5Ducascopy
$100 1:300
Plus 500** $100 1:200
For optimum resultsrecomended to
invest at least $250
FxPro $500 1:500
copied trades are profitable.
about their strategies to their followers
Facebook, Amazon, Apple etc.BankWire, MoneyBookers, Webmoney
Platform pictures
FactsPros
* Overnight commissions might be applicable
visit sitevisit site
beginnersbest for
Cons
eToro is the world's leading social investment network with over 3 million registered users from over 200 countries. The eToro platform is considered to be the most user friendly and intuitive for beginners. eToro is known for its unique “social trading tools” that let you see, follow and copy the best performing traders in the network. You don't need to be an expert to invest like a top performer.
A popular platform which has proven itself since 1999. Plus 500 is one of the rare brokers listed on the London Stock Exchange. This platform has an app available for mobile devices including the iPad, which allows you to make transactions wherever you are (Highest rated broker in UK’s app store). Plus500 is suitable for experienced traders and not beginners. Plus500 is a CFD service. *Your Capital is at risk.
on the London Stock Exchange account verification
iPhone, Android and Windows phone)
Financial Conduct Authority.
Skrill, Bank Wire
Pros
Cons
Platform pictures
Facts
* Overnight commissions might be applicable
visit sitevisit site
editor’s
choice
Bank Wire
Platform pictures* Overnight commissions might be applicable
best of
all-in-one
visit sitevisit site
Cons
Pros Facts
A user friendly, yet professional and trustworthy platform that has trained many professionals. This platform offers one of the easiest sign-up processes as well as multiple payment receival options. A pleasant feature is the super low minimal deposit - just $25. With one trading account, you can trade from your desktop, smart phone, iPhone, BlackBerry, or PDA. The variety of market reviews and analysis tools offered by this platform is remarkable, all of which will help you make the right decisions.
FxPro has been a major player in retail FX since it was established in 2006, and has quickly risen through the ranks to become one of the largest and most influential brokers in the world. Regulated by both the UK’s FCA and the CySEC FxPro is a truly global broker serving clients in over 150 countries worldwide. FxPro has been a force for change in the industry, leading by example it continues to campaign for increased levels of transparency and for the eradication of any and all conflicts of interest between broker and client. When FxPro’s clients take a position on the world’s markets they receive the very best bid and ask prices, executed rapidly, and with no intervention from a dealing desk. FxPro offers also a true ECN trading with spreads from 0 pips on the major pairs.
No Dealing Desk interventionInsured Client FundsNegative Balance ProtectionCommission-less tradingLeverage from 1:1 to 1:500Offers also ECN tradingBest tools in the market
spread)
within 1 business day
Bank Wire, Skrill, Neteller, and more.
Pros
Cons
Platform pictures
Facts
visit sitevisit site
Markets Authority
1million USD deposit
Platform pictures
visit sitevisit site
Cons
Pros Facts
Ducascopy is one of the most reliable and secure brokers out there. Dukascopy Europe is a European subsidiary of Dukascopy Bank of Switzerland. It is a heavily regulated broker and secured by governmental regulations up to 20’000 EUR per customer. Ducascopy Europe is one of the safest places to trade and also provides the lowest spreads and highest liquidity.
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