Welcome to Forex School
Class 1 | About Forex Market
1.1) Forex – The Foreign Exchange Market
What is “Forex” ? The Forex, short for Foreign Exchange (forex market) is the market where currencies from all over the world are traded against each other in the form of pairs.
1.2) Why prefer Forex?
An open market 24h/24 : The Forex is a market that never closes, except on weekends but the market is not closing, it is only your broker that simply not allows you to trade.
1.3) Forex – Currencies
Forex is the foreign exchange market. Various currencies are traded between each others on a parity form. Before understanding the functioning of this market, it is therefore advisable to indroduce each currency.
1.4) Forex Stakeholders
Since the 2000s, Forex continues to grow. The daily trading volume rose from 1420 billion in 2001 to 4000 billion today. This growth is due to the increase of the number of stakeholders.
1.5) Forex Dictionary
A forex dicitonary term glossary
Class 2 | How To Trade on Forex ?
2.1) Earn money on Forex
On the Forex, the principle is simple, you buy or sell a currency in the hope that prices will move in the right side. If you buy Euro, you hope that euro apprises.
2.2) Calculate your Profits and Losses
You probably already heard people speaking about pips and lots, but do you know everything about these terms? How are they calculated? If not, this section is for you.
2.3) TOTO gambles on Forex
Here is a typical example of the speculator who deals on the FOREX and inevitably lose one day or another all his capital. Call him TOTO.
2.4) The Spread on Forex
What does the “Spread” is? The spread is the difference between the bid (offer) and ask (demand). In other words, it is the gap between bid and ask price offered by a broker.
2.5) Leverage on Forex
What Leverage is ? No doubt you’ve already heard about leverage. To play on the Forex, it is necessary to play with a leverage to ensure that your transactions are significant and you earn money.
2.6) Types of Orders
What an order is ? A type of order is how you enter or exit a trade. I will here introduce you the types of orders the most widespread and used in the Forex market.
2.7) CFD’s – Futures – Options
CFD’s ? CFDs are “financial contracts for difference.” They belong to the family of derivatives products as well as a certificate or a warrant, they allow to play both the rise or decline of one underlying.
What a Commodity is ? A commodity refers to the crude state of a product and therefore its state before any transformation. It is then used in the production of finished products, energy or in food.
2.9) Binary Options
What a Binary Option is ? Binary options are options to invest on the realization of a condition on the expiry of the option.
Class 3 | First Steps on Forex
3.1) First steps on the Forex
You’re new on the Forex market? This section is for you. I’ll describe the steps that will make you a confirmed trader. To do this, no miracle, it goes through a learning phase which is obligatory.
3.2) Types of Brokers
As many of you, I did not understand during a long time the difference between the different types of brokers available on the foreign exchange market.
3.3) How to find your Forex Broker?
The choice of your broker is an important element. To choice a wrong broker can prevent you to apply correctly your trading strategy, make you lose a trade, or worse, make you lose all your capital if the broker goes bankrupt.
3.4) How to succeed on Forex?
To know take a loss: this is the first thing everyone says. But that is not actually! This is to know leave your stop loss run! No cancellation of order, not any moves … No no …!!!
3.5) Trading Psychology
The trading psychology plays an important role on the markets. This is our emotions who dictate our decisions and we are therefore a good or a bad trader.
3.6) Short, Middle or Long term investment on Forex?
The question seems simple but the answer is not. It depends on your personality. Only you can know or discover on which period you feel better.
3.7) Trading Hours
Forex is a market openned 24h/24, from Sunday night to Friday night for individuals. During the day, there are periods with more liquidity and more volatility.
Class 4 | About Fundamentals
4.1) Fundamental Analysis
Forex is mainly used with graphic analysis (chart patterns), but some users trade with fundamental analysis.
Inflation is the general rise in prices. While most consumers see inflation as the incarnation of the evil, inflation is sometimes beneficial.
4.3) Money Creation
The money supply is the volume of currency in circulation at a T time. These are the monetary authorities (central banks) that determine what should be the progression of this volume.
4.4) Budgetary Policy
Budgetary policy is the management of revenues (taxes) and government expenditure in a country or a state. Budgetary policy therefore also includes tax policy.
4.5) Purchasing Power Parity (PPP)
The Purchasing Power Parity (PPP) is a unit of measurement that allows comparison of purchasing power of different currencies.
4.6) Central Banks
The European Central Bank (ECB) is one of the world’s most important central banks, responsible for monetary policy covering the 16 member States of the Eurozone.
4.7) IMF – International Monetary Fund
The International Monetary Fund (IMF) is an institution that was created in 1945 at the Bretton Woods conference in order to ensure economic cooperation between countries of the world, and the stability of global financial system.
The G20 was created outside the G7 on September 25, 1999 in Washington, at a meeting of finance ministers of the group, after the succession of financial crises in the 1990s.
4.9) Economic Cycles
Economic cycles are periods that follow one another during which economic activity is more or less good. It is the evolution of economic activity that we called market situtations.
4.10) Monetary Policy
The monetary policy of a country is decided by the central banks that are most often more or less independent agencies. The best known (ECB, FED, BOJ, BOE.)
4.11) Economic Indicators
Economic indicators are snippets of financial and economic data published regularly by governmental agencies and the private sector.
Class 5 | About Technical
5.1) Pivot Points
What Pivot Points are? The pivot point is daily calculated. It identifies areas of resistances and supports.
5.2) Moving Averages
What Moving Averages are? The moving averages are trend indicators. They have different timeframes, short-term, medium term and long term.
5.3) Resistances and Supports
Without any doubt you’ve heard these words and have even used it. But what are really a support and a resistance.
5.4) Bullish and Bearish Gaps
What is a Gap? Gaps are due to a big number of transaction or orders in the same side between the close of a candlestick and the opening of a new one.
5.5) Technical Indicators
What is a Technical Indicator? A technical indicator defines the evolution over time of a variable characterizing the state of a value or a market.
5.6) Chart Patterns
Chart patterns are at the basis of technical analysis. They are distinguished into three categories
5.7) Japanese Candlesticks
Today, the use of Japanese candlesticks is the most used graphic representation.
You certainly heard about the Fibonacci sequence, remember: 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144 … … To get these numbers, it is very simple.
5.9) Divergence Trading
What is a divergence? A divergence occurs when indicator moves in the opposite side of the price.
Class 6 | Trading Strategies
6.1) Trading Methods
Trading methods is Scalping, Day trading and Swing trading
6.2) Money Management
The money management tells you maybe nothing but this technique is indispensable to any structured trading strategies.
6.3) Trading the News
Earning dozen of pips in few minutes or even seconds … Without doubt this is the reason that made you click on this heading. I will tell you immediately, there is no miracle strategy to trade the news.
6.4) Carry Trades
The technical of carry trade is one of the most known and used in the world of finance. Most institutionals and funds used it. Indeed, it is a simple way to make money.
6.5) Hedging Strategy
The hedging strategy consists to hedge against fluctuations of the exchange rate by taking two opposite positions of a same amount.
Class 7 | Large Theories
7.1) Elliot waves theory
Introduction: it was during the thirties that Ralph Nelson Elliott shows that markets have cycles and that these cycles are rules by waves of Fibonacci numbers.
7.2) Gann’s Pyramid Trading Method
The gann’s pyramid is a basic of the trading, invented at the start of the last century. We could compare it to the Elliot waves or to the Fibonacci retracement (Gann also worked on others types of retracements).
7.3) DOW’s Method
The Dow classic method wants us to take a long position each time a highest is overrun, with a stop loss at the last lowest.
Class 8 | Metatrader 4
8.1) MetaTrader 4 Platform
When MetaTrader 4 (MT4) opens, that is the opening page. We will see the different features of the platform.
8.2) Expert Advisors – EA
An Expert Advisor (or EA) is a script used by the trading platform (most often on MetaTrader 4) to manage the positions and the take of orders automatically without manual intervention.
Class 9 | Forex Studies
9.1) Forex Volatility
The volatility measures the risk. The risk is it a result of distribution of prices measured by the standard deviation.
9.2) Correlations : Forex and Commodities
The movement of currencies is influenced by various factors: supply and demand, interest rates, economic growth and many others.
Class 10 | Forex Transactions
10.1) Forward Exchange
The forward exchange is used in hedging by exporters or importers in the case of the currency of each compensation is not the same.
10.2) Currency Swap
The currency swap is a dual exchange rate operation simultaneously, one spot, the other forward in the other direction, with the same compensation.
10.3) Currency Options
A currency option is an agreement between two compensations whereby the buyer of the option pays a premium to the seller for the right but not the obligation to buy or sell a specified quantity of currency on or before a fixed date
10.4) Exotic Options
Exotic options are options that do not have all the properties of conventional currency options. These options include barrier options, window option, Touch, Binary, Average spleen, options on options, etc.…