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(Download PDF) Forex Trading Book For Beginners A Quick Start Guide To Foreign Exchange Market 1St Edition Martin Ebook Online Full Chapter
(Download PDF) Forex Trading Book For Beginners A Quick Start Guide To Foreign Exchange Market 1St Edition Martin Ebook Online Full Chapter
(Download PDF) Forex Trading Book For Beginners A Quick Start Guide To Foreign Exchange Market 1St Edition Martin Ebook Online Full Chapter
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Copyright © 2022
All rights reserved. No part of this book should be reproduced,
stored in any retrieval system, or transmitted in any form without
the prior written permission of the publisher.
Disclaimer
The content in this book is provided for educational and
informational purposes only. No responsibility can be taken for any
result or outcomes resulting from the use of this material.
While every attempt has been made to provide information that is
both accurate and effective, the author does not assume any
responsibility for the accuracy or use/misuse of this information.
Risk Warning
Trading forex on margin carries a high level of risk, and may not be
suitable for all traders and investors. The high level of leverage can
work against you as well as for you. Before making up your mind to
trade forex you should carefully consider your investment objectives,
level of experience, and risk appetite. The possibility exists that you
could sustain a loss of some or all of your initial investment and
therefore you should invest money wisely. You should be aware of all
the risks associated with forex trading, and seek advice from an
experienced independent financial advisor if need be.
Contents
Introduction
Overview of Forex trading
The Foreign Exchange Market
Brief History of Forex
The various types of forex markets
Forex leverage
Forex margin
Central Banks of the World
Currency pairs
Pip (percentage in point/ price interest point)
Overview of international exchange rates
Forex trading chart
How To Interpret Bar Charts Like A Pro
How to read Forex candlestick charts like a Pro
Forex market Line chart
Forex trading analytical methods
Principle of Sentiment Analysis
An Introduction to Fundamental Analysis in Forex
Technical analysis of the forex market
Choosing a Foreign Exchange Broker
Major bad habits of brokers to watch out for
Best Foreign Exchange Brokers
Getting started in forex trading
Forex Trading Strategies for Beginners
Forex Trading Psychology
Some tips on how you can improve your trading psychology
FX Swap
Currency Carry Trades
Currency Markets' Harmonic Patterns
Trend in the Forex Market
Outstanding Indicators for forex trading
MACD (Moving Average Convergence Divergence) indicator
How to Trade Forex using MACD
How to Trade Fibonacci Sequences
Principle of Fibonacci sequence
Fibonacci trading tactics that works best
Stochastic Indicator
The RSI (Relative Strength Index) indicator
How to trade using RSI
Williams percent range( %R)
How to Trade Forex using the Williams %R Indicator
Average Directional Index (ADX)
How to Trade with the ADX
Trading ichimoku chart
Principles of Ichimoku Kinko Hyo
How to Spot a Reversal point in a Trend
Continuation Patterns in Trading
Trading continuation patterns
How to use support and resistance levels to trade
Trading Strategies for Support and Resistance
Channel trading
Popular trading channel indicators
Confluence
Forex trading risk management
How to create a Winning Trading plan
How to Make a Trading Strategy
Typical forex trading mistakes and how to avoid them
Understanding the fundamentals of forex algorithmic trading
Trading with algorithm
Introduction
Participants in the forex market, such as banks and individuals, can buy, sell, and
exchange currencies for hedging or speculative purposes. Banks, commercial
companies, central banks, investment management firms, hedge funds, retail forex
brokers, and investors make up the foreign exchange (forex) market, which is the
world's largest financial market. The forex market is dominated by a global network of
computers and brokers from all over the world, rather than a single market exchange.
Forex brokers can also operate as market makers, posting bid and ask rates for a
currency pair that differs from the market's most competitive bid. The interbank
market and the over-the-counter (OTC) market are the two levels of the currency
market. Large banks trade currencies on behalf of clients in the interbank market for
hedging, balance sheet adjustments, and other purposes. Individuals trade through
online platforms and brokers in the OTC market.
According to the 2019 Triennial Central Bank Survey of FX and OTC Derivatives
Markets, the volume of daily currency transactions was anticipated to reach above 6.6
trillion from April 2019. The currency market is open 24 hours a day, from Monday
morning in Asia to Friday afternoon in New York, and does not close overnight. The
currency market is open from 5 p.m. EST on Sunday to 4 p.m. EST on Friday. Markets
such as equities, bonds, and commodities, on the other hand, all close for a period of
time, usually in the late afternoon EST. There are, of course, exceptions to this rule.
During the trading day, certain emerging market currencies close for a break time. By
far the most widely traded currency is the US dollar. The euro comes in second and the
Japanese yen comes in third. In the currency market, JPMorgan Chase is the biggest
dealer. Chase controls 10.8% of the international FX market. For the past three years,
they have dominated the market. With an 8.1 percent market share, UBS comes in
second. The remaining top slots are filled by XTX Markets, Deutsche Bank, and
Citigroup.
The Benefits and Drawbacks of Forex Trading
Although forex markets have numerous benefits, this sort of trading is not without its
drawbacks.
Benefits
1. Extensive flexibility; trading is possible virtually 24 hours a day, seven days a week.
One of the most appealing aspects of forex trading is its inherent freedom and
absence of constraints. There is a tremendous amount of trading volume, and markets
are active roughly 24 hours a day, seven days a week. People who work throughout
the day can trade at night or on weekends as a result of this (unlike the stock market).
2. A wide range of trading choices
When it comes to various trading alternatives, there is a lot of flexibility. There are
hundreds of currency pairs, as well as several sorts of agreements, such as futures and
spot contracts.
3. Transaction charges are low
Transaction costs are often cheap compared to other markets, and the permissible
leverage is among the largest of all financial markets, magnifying both gains and
losses.
Disadvantages
1. High leverage amounts are permitted.
The maximum leverage allowed is 20-100 times, which can result in big gains but also
large losses quickly.
2. Operational danger
Although the fact that it is open nearly 24 hours a day may be appealing to some, it
also means that some traders may have to rely on algorithms or trading programs to
safeguard their funds while they are gone. This increases operational hazards while
also potentially increasing costs.
3. A lack of regulation raises the danger of a counterparty.
This is one of the major disadvantages in forex counterparty risk, where regulating
Forex markets can be difficult, given it’s an international market that trades almost
continuously. There is no central exchange that guarantees a trade, which means there
could be default risk.
A currency pair is a pair of currencies where the value of one currency is stated against
the value of the other. The base currency is the first listed currency in a currency pair,
while the quote currency is the second listed currency. Currency pairs compare the
value of one currency to another, with the base currency (or first) versus the second or
quote currency. It tells you how much of the quote currency you'll need to buy one
unit of the base currency. On the international market, currencies are identifiable by an
ISO currency code, which is a three-letter alphabetic code. The ISO code for the
United States dollar is USD.
Major Currency Pairs
The euro versus the US dollar, sometimes known as EUR/USD, is a widely traded
currency pair. It is, in fact, the world's most liquid currency pair since it is the most
heavily traded. The currency rate EUR/USD = 1.2500 indicates that one euro is worth
1.2500 US dollars. EUR is the base currency, while USD is the quote currency from the
example one euro can be exchanged for 1.25 dollars in the United States. Another way
to look at it is that buying 100 euros will cost you $125. The number of currency pairs
is equal to the number of currencies in the world. As currencies come and go, the total
number of currency pairs varies. The volume traded on a daily basis for each currency
pair is used to categorize all currency pairs. The major currencies are those that trade
the largest volume against the US dollar, such as:
EUR/USD, or the Euro vs. the US dollar
USD/JPY, or the US dollar vs. the Japanese yen
GBP/USD or the British pound vs. the dollar
The Swiss franc vs. the dollar (USD/CHF)
AUD/USD (Australian dollar versus US dollar)
USD/CAD (Canadian dollar versus US dollar)
Because both Canada and Australia are wealthy in commodities and are affected by
their prices, the final two currency pairs are known as commodity currencies, because
the currencies move with their commodities.
The most liquid markets are the major currency pairs, which trade 24 hours a day,
Monday through Thursday. The currency markets start on Sunday evening and close at
5 p.m. Eastern time on Friday.
Pairs of Minors and Exotics
Minor currencies or crosses are currency pairs that are not linked to the United States
dollar. These pairs have slightly wider spreads and are less liquid than the majors, but
they are still viable markets. The currency pairs with the highest volume of trading are
those in which the individual currencies are also majors. EUR/GBP, GBP/JPY, and
EUR/CHF are some examples of crosses. Emerging market currencies are among the
exotic currency pairs. These combinations are less liquid, with substantially bigger
spreads. The USD/SGD (US dollar/Singapore dollar) is an example of an exotic
currency pair.
Pip (percentage in point/ price interest point)
A pip is an acronym for "percentage in point" or "price interest point," and it is a
fundamental concept in foreign exchange (FX). According to forex market convention,
a pip is the smallest price change that an exchange rate can make. The pip change is
the last (fourth) decimal point in most currency pairs that are priced to four decimal
places. As a result, a pip is equal to 1/10000, or one basis point. The lowest possible
move in the USD/CAD currency pair, for example, is $0.0001, or one basis point.
Pipettes
Pipettes Fractional pips, often known as "pipettes," are used in forex to allow for
tighter spreads. A fractional pip is 1/10 of a pip, allowing pipettes to be used to view
the EUR/USD currency pair to five decimal places and currency pairs with the yen as
the quote currency to three decimal places. In the quotation panel, pipettes are
displayed in superscript format.
Pips and Their Functions
Bid and ask quotations that are accurate to four decimal places are used to
disseminate exchange quotes in forex pairs. Forex traders buy and sell a currency
whose value is expressed in relation to another currency. Pips are the units of
measurement for exchange rate movement. The lowest change for most currency pairs
is 1 pip because most currency pairs are quoted to a maximum of four decimal places.
The value of a pip can be estimated by dividing the exchange rate by 1/10,000 or
0.0001. A trader who wants to buy the USD/CAD pair, for example, would buy US
dollars and sell Canadian dollars at the same time. A trader who wishes to sell US
dollars would sell the USD/CAD pair while simultaneously buying Canadian dollars.
Traders frequently use the term "pips" to refer to the difference between the bid and
ask prices of a currency pair, as well as the amount of profit or loss that can be
achieved from a trade. Japanese yen (JPY) pairs are quoted with two decimal places,
which is unusual. The value of a pip is 1/100 divided by the exchange rate for currency
pairs like EUR/JPY and USD/JPY. When the EUR/JPY is quoted at 132.62, one pip is 1 /
(100×132.62) = 0.0000754.
Profitability and Pips
Before we get into profitability, it's vital to recognize that open positions are active
trades that are vulnerable to exchange rate swings. Open positions are closed by
entering a trade that is the inverse of the original deal, bringing the total amount for
the currency pair derivative back to zero. If you have a short (sell) position of 5,000
USD/CAD, for example, all you need to do is place a buy (long) order for 5,000
USD/CAD to close your position and realize your profit. At the end of the day, the
movement of a currency pair decides whether a trader made a profit or loss on their
bets.
If the euro rises in value against the US dollar, a trader who buys the EUR/USD at
1.1835 will profit 66 pips if the price climbs to 1.1901 (1.1901 - 1.1835 = 66 pips).
Consider a trader who sells USD/JPY at 112.06 and buys the Japanese Yen. If the
trade is closed (that is, bought) at 112.09, the trader loses 3 pips, but gains 5 pips if
the position is closed at 112.01. While the difference may appear insignificant in the
multitrillion-dollar foreign currency market, profits and losses can soon build up. If a
$10 million position in this setup is closed at 112.01, the trader will earn by $10 million
x (112.06 - 112.01) = 500,000. In US dollars, this profit is computed as
500,000/112.01 = $4,463.89.
MEASUREMENT OF CHANGE IN TRADE VALUE
The monetary worth of each pip is influenced by currency pair being traded, the size of
the trade, and the exchange rate. Because of these considerations, even a single pip
change can have a big impact on the value of an open trade.
How to calculate the value of pip
1. Determine how many quotes each pip represents in terms of currency.
2. Determine the amount of base currency per pip.
3. Calculate the trade's overall profit or loss.
Example 1: A $350,000 trade in the EUR/GBP pair ends with a profit of 29 pips at
0.8714. Make a profit calculation.
Number of GBP per pip: 350,000 × 0.0001 = 35
Per Pip Value: 35 ÷ 0.8714 = 40.17 EUR per pip
Trade Profit: 29 pips × 40.17 = 1, 164.93 Euros
Example 2: A $175,000 trade in the AUD/NZD pair ends with a loss of 17 pips at
1.2703. calculate the loss
Number of NZD per pip: 175,000 × 0.0001 = 17.5
Per Pip Value: 17.5 ÷ 1.2703 = 13.78 AUD per pip
Trade Loss: -17 pips × 13.78 = (-234.26) Australian Dollars
fajok?
6. A kollektiv vélemény.
8. A népek öregkora.
1. A kőszén korszaka.
2. A gazdasági harcok.