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TRADING
m i n u t e s
in 1 5 VOL II
BEST FOR
BEGINNERS
30 days after you read this e-book,
your friends will notice your success!
Trading involves risk. Leveraged trading has large potential rewards, but also
large potential of risk. Be aware and accept this risk before trading.
forex market at a glance
Make money even in times of crisis
While 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.
Easy rules
Unlike 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.
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London
New York
Sidney
Tokio
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.
Best time
foreign exchange
EUR /USD
28 %
EUR /USD
Base Quote
Currency Currency
EUR/USD
Point (Pip)
Selling price (Bid) Buying price (Ask) The fourth unit after the
decimal point, which is the
1.3000 spread 1.3001 smallest unit of an exchange rate.
Spread
point The difference between the sell
quote and the buy quote (in pips).
Example
How the Euro exchange rate dropped
Prime Minister
of Greece announces EUR /USD
referendum
Berlusconi
resigns
Central banks
agree to stimulate The EU cannot
liquidity of finan- agree upon
ECB announces cial transaction changes in the
a new president treaty
Nov 1 Dec 1
2011 2011 Source: Morgan Stanley Research, Bloomberg.
leverage & Lots
Term Leverage
Through the use of leverage, traders are Leverage allows you to trade with more
able to invest a small amount of money and money than you have in your account,
trade much larger deal sizes. This is useful because you effectively leverage your free
because the movement in currency rates can balance to open a larger trade. Leverage is
be very small, and larger trades represent shown as a ratio, for example 1:100. Note
larger profits/losses for every pip change in that leverage amplifies both potential
the rate. profits and losses alike.
Term Lot
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.
Mini Lot
Micro Lot 10000
1,000 units
units 0.1
0.01 11pip
pip==$1
$0.10
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.
How leverage works
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.
You decide to buy 100,000 EUR and sell Leverage is a very aggressive investment
USD at a rate of 1.4100. Do you need strategy and only those with high risk
more than 100,000 US dollars to open tolerance and a long time horizon should
the trade? No! With a leverage of 1:50 consider leverage.
you will need to put down only 1/50 of
the deal size as the margin, which works Use leverage appropriate to your
out to $2,820. comfort level: Using 1:50 leverage means
that a 2% adverse move could wipe out
Calculate the margin: all your equity or margin. If you are a
Leverage 1:50 relatively cautious investor or trader, use
a lower level of leverage with perhaps 1:5
Divide 100,000 by 50=2000 EUR or 1:10 leverage.
2000 EUR x 1.41=$2,820
Margin=$2,820 The leverage available on positions
carried over the weekend may vary.
This is the amount that will be used to
Maximum leverage limits vary in
cover your potential losses. In other
different countries, varying from 1:10 to
words, the margin is the actual amount
1:400.
that you are risking to lose if the trade
goes against you.
Trading strategy leverage
Going short on euro
You expect the euro to fall against the US dollar.
EUR /USD
1.4000
Open @ 1.3800
1.3500
Close @ 1.3108
1.3000
1.nov 1.dec
2011 2011
You were right. Euro depreciates against You were right. Euro depreciates against
the dollar to 1.3108 and you decide to the dollar to 1.3108 and you decide to
close your trade and take your profits. close your trade and take your profits.
Result: The euro fell by 692 pips (1.3800 Result: The euro fell by 692 pips (1.3800
- 1.3108 x 10000). Your profit is 692 x 1 - 1.3108 x 10000). Your profit is 692 x 1
(lot) x 50 (Leverage) = $34,600 (lot) x 200(Leverage) = $138,400
If the trend moves against the investor, leverage magnifies losses the same way it
magnifies returns in the examples above.
how to read graphs
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 arent, 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.
Example
MULTIPLE TIME FRAME ANALYSIS
time
X
time
X
1900
Now lets look at the same
currency over a longer period
of time.
1600
Conclusion
For successful and precise market analysis, you must use at least 2-3 time frames!
8 FOR
STRA EX
TEGIE
YOU N S
EED
TO KN
OW
1. The Double-Red Strategy
Resistance level
Sell
1.
2.
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.
3. Support & Resistance
Resistance level
Sell Sell Sell
Support level
Buy Buy
Resistance level
Support level
Buy
2. Upper shadow
at least 2x the size
of the real body
3. Confirmation
of a downtrend.
3
Sell
2
Point 2 marks the end
of a counter move.
Description
1. After an uptrend or, at least, a strong 4. The pattern is now complete. There is
move up, look for the 1 2 3 pattern to still a very important rule that must be
form, starting, of course, with the first observed: the price must move down to
peak (1). break the low created at point (2). If that
2. If a counter-move starts, mark the happens, all of our conditions are met and
bottom of that move with (2). we enter the trade with a short position.
3. If the new move up does not surpass
point (1) and starts turning down, mark
the highest point of this new move up
with (3).
7. Moving average
Se
ll
Moving Average
Buy
Extremum
Buy
Money transactions
The 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.
For optimum results
recomended to
invest at least $250
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.
Pros Facts
Huge and active community Founded in: 2006
Super friendly yet powerful interface Registered in: Cyprus
Follow & Copy feature Regulators: CYSEC, MiFID
Between 80 -90% of Minimal deposit: $50
copied trades are profitable. Leverage: up to 1:400
Guru traders are obliged to write Spreads: EUR/USD 3 points
about their strategies to their followers Payments: Credit card, Paypal,
Great stock investments: Google, BankWire, MoneyBookers, Webmoney
Facebook, Amazon, Apple etc. Commissions: No*
Contacts: + 1-866-350-0881,
support@etoro.com
Cons
* Overnight commissions might be applicable
Spreads could be tighter
The trader lter could be more advanced
Trade history features need improvement
Platform pictures
visit site
editors
choice
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 UKs app store). Plus500 is suitable for experienced
traders and not beginners. Plus500 is a CFD service. *Your Capital is at risk.
Pros Facts
Bonus of $20 - $10,000 Founded in: 1999
Low xed spreads Registered in: UK
Listed on the London Stock Exchange Regulator: Financial Conduct
Fast account verification Authority.
Available in 35 languages Minimal deposit: $100
Accessible everywhere (web, iPad, Leverage: up to 1:50
iPhone, Android and Windows phone) Spreads: EUR/USD 2 points
Payments: Credit card, Paypal,
Skrill, Bank Wire
Commissions: No*
Cons Contacts: +44 203 002 7290,
support@Plus500.com
Scalping not allowed
Very basic charting for the mobile app * Overnight commissions might be applicable
Platform pictures
visit site
best of
all-in-one
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.
Pros Facts
Very easy & fast sign-up Founded in: 2003
Low minimal deposit Registered in: Cyprus
Free market analysis Regulators: CYSEC, MiFID
Minimal deposit: $25
Leverage: up to 1:200
Spreads: EUR/USD from 3 points
Cons Payments: Credit card, Paypal,
Bank Wire
High overnight fees
Commissions: No*
Relatively high spreads
Contacts: cs@easy-forex.com
Platform pictures
visit site
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 UKs 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 FxPros clients take a position on the
worlds 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.
Pros Facts
No Dealing Desk intervention Founded: 2006
Insured Client Funds Headquarters: Limassol, Cyprus
Negative Balance Protection Regulated by: FCA, CySEC
Commission-less trading Minimum Deposit: $500
Leverage from 1:1 to 1:500 EUR/USD spread: 1.5 (average
Offers also ECN trading spread)
Best tools in the market Max Leverage: 1:500
Money Withdrawals: Processed
within 1 business day
Commissions: No Commissions
Payment Options:Visa/MasterCard,
Cons Bank Wire, Skrill, Neteller, and more.
Platform pictures
visit site
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 20000 EUR per
customer. Ducascopy Europe is one of the safest places to trade and also provides
the lowest spreads and highest liquidity.
Pros Facts
High security Founded in: 1998
Low spreads Registered in: Latvia (Europe)
Scalping, hedging etc. allowed Regulators: Swiss Financial
Markets Authority
Minimal deposit: $100
Leverage: up to 1:300
Cons Spreads: EUR/USD ~ 1.4 pip
Payments: Credit, Debit Cards
Slightly longer registration process
Commissions: from 10 USD /
Trading commissions
1million USD deposit
Contacts: info@dukascopy.eu
Platform pictures
visit site
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