More than a trillion dollars changes hands in the foreign currency (forex) market every day. Whether it is individual traders searching for spectacular profits or institutional investors looking to protect their capital, traders and investors around the world agree that there is no more exciting market on earth than the forex market. Now it's your turn to get started in this exciting market.
You can trade in the forex market. You don't have to be a mathematical genius to trade in the forex market. You don't have to be an economist to trade in the forex market. It is available to anyone and everyone.
Regardless of how much money or trading experience you have, you can take advantage of the benefits the forex market provides.
Of course, you need to learn a few things before you can start making serious money in the forex market, but that is why we are here.
Overview: Learning the Forex with LearningMarkets.com
You need to know a couple of things about this learning guide and our educational philosophy before we get started. We believe investors learn best when there is a mix of media in a learning guide. That's why every lesson you will find in this course contains the following:
- Clear explanations of the concepts you need to know
- Easy-to-understand examples illustrating each concept
- An in-depth Video Demonstration to solidify Your understanding of the concept
The combination of these items will provide a rich learning experience wherein we can teach and re-enforce solid forex principles...which means you will really learn this stuff and be able to use it in your trading.
In other words, we believe this is more than a simple course on forex trading. It is a complete educational experience.
This learning guide is also meant to be used as a reference guide. You can come back to it again and again as you watch the videos and start applying the principles you have learned here in your own trading.
What Every Forex Trader Needs To Know
As a new forex trader, you are going to need to learn a lot about the forex market. This lesson is a summary of some of the most important information and a preview of the things you will learn throughout the rest of this learning guide. Feeling comfortable with this information before you begin trading is important so make sure you take the time to thoroughly understand the material. If you are properly armed with the right information, are willing to put in some work and have realistic expectations, you can find yourself Profiting with Forex with LearningMarkets.com in no time.
So let's get started.
First, you have to learn and understand the basics so you have a strong foundation to stand on in your trading.
While learning and understanding this material and building a strong foundation is important, you must remember that this is only your first step. You can only learn so much from this material. To truly become a successful forex trader, you need to take what you learn here and start applying it in the live market.
To help you do this, think of your forex education as being divided into three parts:
- Driver's education class
- Driving on the practice range
- Driving on the street
Think of the written and video portions of this learning guide as your driver's education class. When you learn to drive, you go to a driver's education class to learn about traffic rules, how your car works and what you are supposed to do as a driver. This is the first step you take when learning how to drive a car. Only after you have taken and passed your driver's education class can you move on to driving on the practice range and driving on the street.
Trading in a forex demo account (a working practice account that is funded with paper, or pretend, money) is the equivalent of driving on the range when you are learning how to drive. You are in the car and you have to make live decisions, but you are operating in a controlled environment.
Trading in a live forex account is the equivalent of driving on the street when you are learning to drive.
We will be there along side of you to give you pointers and help you make decisions when you are driving on the practice range (trading in your demo account) and driving on the street (trading in your live account), but you will be behind the wheel. You will be making the decisions and seeing how those decisions play out in real life.
Once you've taken these three steps, you are ready to go out and trade on your own.
Putting You in the Driver's Seat
How will we be along side of you to give you pointers, you ask? Well, we've got some extra treats for you.
Every day at LearningMarkets.com, we provide you with the following tools and analysis you need to get started in your analysis:
- Daily video analysis
- Live forex charts
- Interactive economic calendar
- Fundamental seesaw
- COT Sentiment Indicator
- Community of forex traders
Daily Video Analysis
Each trading day, we record technical analysis videos on many of our favorite currency pairs. We look at trends, levels of support and resistance and other technical indicators to determine which direction we believe each currency pair is going to be moving in the near future.
Live Forex Charts
Currency pairs move back and forth 24 hours per day. Having good charts enables you to monitor where your favorite currency pairs are headed.
Interactive Economic Calendar
News makes the forex market go 'round. Knowing what news is coming helps you prepare for what is to come, and having an up-to-date source of what the news is can help you react appropriately to changing market conditions.
Sometimes it helps to take a step back and look at the big picture when you are trading currency pairs in the forex market. The Fundamental Seesaw allows you to look at various fundamental factors that may affect a currency pair's performance and weigh them against one another in one easy-to-use tool.
COT Sentiment Indicator
The professionals who trade currency pairs in the forex market leave a footprint wherever they go. One such footprint is created when these large traders report their trades to the Commodities and Futures Trading Commission (CFTC) each week and then the CFTC releases those numbers to the public in its weekly Commitment of Traders (COT). The COT Sentiment Indicator helps make sense of those numbers.
Community of Forex Traders
When you are just getting started in forex trading, nothing is more valuable than having other forex traders to bounce ideas off of and ask questions of. You will be amazed at how much you can learn from other traders and their experiences. Don't be afraid to reach out in the forum and get help from our community of forex traders.
What Are the Professionals Watching?
As an individual forex trader, you want to make sure you are watching the same things the professionals are watching. Of course, you aren't going to have access to all of the resources a large forex trading firm has, but with the information your forex dealer offers, you can still keep an eye on the important stuff. The following are a few things you should be watching as a forex trader (you'll learn more about these things in later chapters):
Fundamentals: economic and political factors that influence how traders value currencies.
News: changes in economic and political factors
Charts: graphical representations of how strong/weak traders believe currencies are. Traders are watching for the following:
- Support and resistance levels
- Price patterns
- Technical indicators
Their Trading Rules: successful traders' decisions are heavily influenced by their trading rules. For example, if their rules tell them to exit a trade, professional traders will exit regardless of what else is happening on the chart.
As you get started trading in the forex market, be patient with yourself. You are not going to become a millionaire overnight. But if you take the time to learn the critical information we are going to share with you in this book and its accompanying videos, you can succeed as a forex trader.
You also have to be patient with the market. You have to be willing to take what the market gives you. If you try to fight the market, you will lose every time.