Forex

Guide to Forex
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The signs of the road are easy to read. No matter where you are in the world, chances are pretty good that you’d know what to do at a red octagonal sign or a green light. We combined forex learning with the rules of the road to give you a fun and easy way to learn the basics of forex trading. Driving a car can be exciting, fun and, if you’re not doing it properly, very dangerous. Just like forex trading. If you’re ready to learn, have a seat, fasten your belt and enjoy our Forex Ed lessons.
How the Road was Paved

Today’s forex market was formed in the early 1970’s. The first major step in the formation of the market was the Bretton Woods Accord, which was established after World War II to restore the world’s economic state. The Bretton Woods Accord decided that all major currencies would be pegged to the U.S. dollar, which was pegged to gold at a price of $35 per ounce. Under these standards, the major global currencies pegged to the U.S. dollar were only able to fluctuate by one percent.

The European nations sought to move away from their dependency of the dollar in the 1970’s, thus forming the Smithsonian Agreement and the European Joint Float. Each agreement was similar to the Bretton Woods Accord, but allowed a greater range of fluctuation in the currency values. However, both agreements failed, paving the way for the free-floating systems. There were no longer pegs on currencies, and therefore currencies were able to fluctuate freely.

Traders utilize these fluctuations on the forex market. By studying price changes and current events, a forex trader can buy or sell one currency against another in hopes of making a profit off of the price fluctuations.

Tools Our Future Lessons An Introduction to Forex

The Basic Mechanics behind a Trade

Before you can steer your forex career in a profitable direction, you need to know some market basics.

Trading Hours
The Forex market is a global entity. Market hours overlap one another, ensuring that there’s always an open market. Traders can make trades 24 hours a day, 5 days a week. The market closes on Fridays at 21:00 GMT and reopens on Sundays at 21:00 GMT. Tools Trading Hours Trading Pairs
A trading pair consists of a base currency and a quote currency. The first currency listed in the pair is the base currency, while the second currency is the quote currency. Traders buy or sell the base currency using the quote currency. Let’s take a look at this pair:

EUR/USD

In the trading pair above, the Euro is the base currency and the United States Dollar is the quote currency. If you are trading with the EUR/USD, you’d be purchasing or selling the Euro using the United States Dollar. Tools Trading Pairs Leverage
Leverage is a big part of Forex trading. Leverage is a loan given to a trader by a broker to intensify that trader’s results.

Calculating leverage is simple. All you have to do is multiply the leverage by how much you wish to trade. A leverage of 100:1 means that the broker will match every 1 dollar you trade with 100 dollars. A leverage of 20:1 means that every 1 dollar you trade will be matched by 20 dollars, etc. For example, if you sign up with Forex Club’s minimal balance of $10 and trade with a leverage of 100:1, that means that you can trade ($100x10=) $1,000. Tools Leverage


How to Get There Safely

Orders
Hands at 10 and 2. Eyes on the road. Play it safe with Forex and set orders!

Traders can set a stop-loss and a take-profit order to automatically close a position when price rises or falls to a certain point. Stop-loss orders ensure that price won’t fall or rise more than you want it to and prevents you from any further losses. Take-profit orders ensure that your position is closed when you make a certain amount of profit.

The OCO order (one cancels the other) ensures that after your position is closed all stop-loss and take-profit orders are canceled. If you have a good idea of how the market will move and wish to set another order before your position is closed, you can place an If-done order.

Tools Orders
Market Psychology
There are factors outside of the market that affect every trade you make. Market psychology analyzes the emotions we feel while we’re trading. If you lose a trade, are you going to risk more to win it back? If a trend goes in your favor, are you going to hold on until it turns against you? Keep your greed and your fear in check. Take a deep breath, relax, and above all, have fun.


Tools Market Psychology

Keeping Your Eyes on the Road

Technical and Fundamental Analysis Traders use two different methods to predict how the market will move. The first method, Technical Analysis, relies on the ideas that a) price matters above all else, b) price moves in trends and c) history repeats itself. Traders who use this method rely on chart analysis and charting software.

For top of the line charting software, visit http://www.fxclub.com/autocharts/.

Tutorial 1: How to trade chart patterns using Autochartist

Tutorial 2: Scanning the markets for set ups while using Autochartist

Tutorial 3: Designing your own scans, or customizing settings on the Autochartist platform

Tutorial 4: Interpreting chart patterns and how to optimize this information to make better trading decisions

Tutorial 5: Continuation versus reversal patterns identified by the Autochartist platform

Tutorial 6: Trends and market stages: Identifying the best pattern with which to trade

The other method used by traders is Fundamental Analysis. This method relies heavily on current and future events to determine how price will move. Traders who use this method meticulously study economic calendars and news updates to estimate how price will move.

An economic calendar and news updates can be found at http://www.fxclub.com/analyze-forex/.

Tools Technical Analysis 1
Technical Analysis 2
Fundamental Analysis Chart Analysis I
Chart Analysis II
The Essential Indicators
Japanese Candlesticks Charting Software
Calendar and News


LOOK
Yellow means look. Take a look around and see why Forex Club’s platforms and advantages are unique and beneficial to you.