basic of forex trading

After a months of trying sucecce on trading , i’am now better than ever , i was not understand anything about forex ,  even kind of account , and lots , so i was search on google evrytime , and try and try , i was hard first time , because i did not  , I did not realize the basics of forex well , I was just lost and stuck among the many things that does not help at all, as I mentioned earlier, was the only thing is to  success and to become rich quickly, but this is a newbie thinking, so I do not want one of those who will read my blog  never falling into this problem; if were not to know the basics of forex , you will not go away my friend trust , at first time , i was thinking that if i read the best books on amazon or ebay , about forex  i will be a professional trader very easy , guess what none of this is right , if you want to successes , you need to learn, and PRACTIE , PRACTICE , & PRACTICE , i think you ask yourself what i mean by practice , practice is the only way to Success on forex or trading , on commodities or indices or what you want to trade , whatever , if you failed , then try again , and try and try ,, i was try about 300 or more time until i get what i want  , trust me you will failed many times but you will so stronger than first , and every time you will learn something new that will help you , to Success ,to lets begin ;  

§    The first thing you have to know is that you will not be rich very quickly , but you will get some good profit

§    The second thing is you have to Managing your capital strictly  and don’t be greedy , or following the candles

§  If you want to trade sefty , you have to stop trading at news time , you will find agenda of all news of currencies , at investing.com

§  PRACTICE on demo account and not by a real money until be ready to trade with real money

§  Chose a good broker , there is many brokers on internet ,, but some of them are more good , and so easy , just go to google , and search for good broker , you will find , a lot of them , i can t tell you what the best because i try many of them

§  FAILED , FAILED ; yess failed because if you failed , you will learn more and more , failed is the key of Success

THESE are just some step that you need to follow to begin learn forex , don’t worry you will learn more and more , i just write a little bit because this is just a introduction ,

What are you really selling or buying in the currency 

market?

You are buying and selling money. In the forex market, think of money as a commodity  you are buying a currency hoping that its value will increase, and if you are selling you are betting that it will decrease. Like any other commodity, the price of currencies is displayed in quotes in the spot market , and traded in currency pairs; like the US dollar and the Canadian dollar (USD/CAD) or the US dollar and Japanese yen (USD/JPY).

Also, although you are buying another country's currency, you are not buying anything ‘physical', and thus no physical exchange of money ever takes place. This can be confusing, but think of it like buying shares of a publicly traded company where everything is done electronically inside your trading account. But unlike the stock market, the forex market doesn't have a central exchange like the bourse for instance. Instead the forex market is an interbank online which means it's all connected together in a network of banks and institutions.

You can also think of buying currencies as buying shares in a country, you are betting on the success or failure of a particular country's economy. You'll learn more about reading a currency quote and the economics that move currency rates in the upcoming Introduction to forex section.

Currency Quotes

Currencies are quoted in pairs, for example the USD/EUR is the U.S. dollar/euro. Using this quotation, the value of a currency is determined by its comparison to another currency. The first currency of a currency pair is called the base currency and the second currency is called the quote currency. The currency pair shows how much of the quote currency is needed to purchase one unit of the base currency.

For example, if the USD/EUR currency pair is quoted as being USD/EUR = 0.8000 and you purchase the pair; this means that for every 0.80 euros you sell, you purchase (receive) US$1. If you sell the currency pair, you will receive 0.80 euros for every US$1 you sell. The inverse of the currency quote is EUR/USD, and the corresponding price would be EUR/USD = 1.25, meaning that US$1.25 would buy 1 euro.

MOST TRADED PAIRS

Although some retail dealers trade exotic (less popular) currencies such as the Thai baht or the Czech koruna, the majority trade the seven most traded currency pairs in the world. The four most popular, also known as "the majors" are:

EUR/USD (euro/dollar) – "euro"
USD/JPY (U.S. dollar/Japanese yen) – "gopher"
GBP/USD (British pound/dollar) - "cable"
USD/CHF (U.S. dollar/Swiss franc) – "swissie"

The three less popular commodity pairs are:

AUD/USD (Australian dollar/U.S. dollar) – "aussie"
USD/CAD (U.S. dollar/Canadian dollar) – "loonie"
NZD/USD (New Zealand dollar/U.S. dollar) – "kiwi"

These currency pairs, along with their various combinations (such as EUR/JPY, GBP/JPY and EUR/GBP) account for more than 95% of all speculative trading in FX. Given the small number of possible trades - only 18 pairs are actively traded - the FX market is much less broad than the stock market.

WHAT MOVES CURRENCY ?

Fundamental Analysis

If you think it's difficult to value one company, try valuing a whole country! Fundamental analysis in the forex market is often very complex, and it's usually used only to predict long-term trends; however, some traders do trade short term strictly on news releases. There are many different fundamental indicators of currency values released at many different times. 

Here are a few:
-Non-farm payrolls
-Purchasing Managers Index (PMI)
-Consumer Price Index (CPI)
-Retail sales
-Durable Goods

These reports are not the only fundamental factors to watch. There are also several meetings that provide quotes and commentary, which can affect markets just as much as any report. These meetings are often called to discuss interest rates , inflation and other issues that affect currency valuations. Even changes in wording when addressing certain issues - the Federal Reserve  chairman's comments on interest rates, for example - can cause market volatility.

Simply reading the reports and examining the commentary can help forex fundamental analysts gain a better understanding of long-term market trends and allow short-term traders to profit from extraordinary happenings. If you choose to follow a fundamental strategy, be sure to keep a calendar that highlights important dates so you know when these reports are released. Your broker may also provide real-time access to such information.

Now that you've gotten your feet wet, let's dig in a little deeper into the basics of forex.

What is leverage ?

The leverage that is achievable in the forex market is one of the highest that individual investors can obtain. Leverage is a loan that is provided to an investor by the broker that is handling his or her forex account. Usually, the amount of leverage provided is either 50:1, 100:1 or 200:1, meaning your broker will allow you to trade up to 200 times the amount of actual cash you wish to trade. Leverage amounts vary depending on your broker and the size of the position you are trading. Standard trading is done on 100,000 units (ie. dollars) of currency, so for a trade of this size, the leverage provided is usually 50:1 or 100:1. Leverage of 200:1 is usually used for positions of $50,000 or less.

To trade $100,000 of currency with a margin of 1%, an investor will only have to deposit $1,000 into his or her margin account The leverage provided on a trade like this is 100:1. Leverage of this size is significantly larger than the 2:1 leverage commonly provided in the stock market and the 15:1 leverage provided by the futures market. Although 100:1 leverage may seem extremely risky, the risk is significantly less when you consider that currency prices usually change by less than 1% over the course of a day. If currencies fluctuated as much as stocks, brokers would not be willing to provide such large leverage amounts.

Although the ability to earn significant profits by using leverage is substantial, leverage can also work against you. For example, if the currency behind one of your trades moves in the opposite direction of what you believed would happen, leverage will greatly amplify the losses. To avoid such losses, experienced forex traders usually implement a strict trading style that includes the use of stop and limit orders (both of which we will discuss in depth later in our walkthrough). Now that we've learned about leverage and the role it plays in the forex market, let's take look at some of the other risks associated with forex.

THE PAIRS

Ok, so you know what you need to do to get started in forex. You know the risk and the benefits. You know how leverage can be a double-edged sword for forex traders. Now let's take a look at the currencies that forex traders use to make their profits.

There are many official currencies that are used all over the world, but there only a handful of currencies that are actively traded in the forex market. In currency trading, only the most economically and politically stable and liquid currencies are traded in large quantities. For example, due to the size and strength of the U.S. economy, the U.S. dollar is the most actively traded currency in the world.

In general, the eight most traded currencies (in no specific order) are the U.S. dollar (USD), the Canadian dollar (CAD), the euro (EUR), the British pound (GBP), the Swiss franc (CHF), the New Zealand dollar (NZD), the Australian dollar (AUD) and the Japanese yen (JPY.

As you already have learned, currencies must be traded in pairs. Mathematically, there are 27 different currency pairs that can be traded from those eight currencies alone. However, there are about 18 currency pairs that are most often quoted by forex market makers because of their overall liquidity. These pairs are:

EUR/CAD	GBP/CHF
EUR/AUD	GBP/USD
EUR/USD	GBP/JPY
EUR/CHF	AUD/USD
EUR/GBP	AUD/JPY
EUR/JPY	AUD/NZD
USD/CHF	AUD/CAD
USD/CAD	CHF/JPY
USD/JPY	NZD/USD

The total amount of currency trading involving these 18 pairs represents the vast majority of the trading volume in the overall FX market. This relatively small number of choices makes trading a lot less complicated compared to dealing with stocks, where choices number in the thousands.

Now that you've learned about the major currencies that are traded on the forex market you might think you're ready to jump in head first and start trading. Well slow down, because you can't know where you're going until you know where you've been. Let's take a look at the history of the forex market and get to know the major players in today's market.

TYPE OF CHART

Now that you have some experience and understanding in currency trading, we will starting discussing a few basic tools that forex traders frequently use. Due to the fast paced nature and leverage available in forex trading, many forex traders do not hold positions for very long. For example, forex day traders may initiate a large number of trades in a single day, and may not hold them any longer than a few minutes each. When dealing with such small time horizon, viewing a chart and using technical analysis are efficient tools, because a chart and associated patterns can indicate a wealth of information in a small amount of time. In this section, we will discuss the "candlestick chart" and the importance of identifying trends. In the next lesson, we'll get into a common chart pattern called the "head and shoulders." (Day trading could be your cup of tea; you might want to read 




Candlestick Charts 

While everyone is used to seeing the conventional line charts found in everyday life, the candlestick chart is a chart variant that has been used for around 300 years and discloses more information than your conventional line chart. The candlestick is a thin vertical line showing the period's trading range. A wide bar on the vertical line illustrates the difference between the open and close. 


The daily candlestick line contains the currency's value at open high, low and close of a specific day. The candlestick has a wide part, which is called the "real body". This real body represents the range between the open and close of that day's trading. When the real body is filled in or black, it means the close was lower than the open. If the real body is empty, it means the opposite: the close was higher than the open.

Just above and below the real body are the "shadows" Chartists have always thought of these as the wicks of the candle, and it is the shadows that show the high and low prices of that day's trading. When the upper shadow (the top wick) on a down day is short, the open that day was closer to the high of the day. And a short upper shadow on an up day dictates that the close was near the high. The relationship between the day's open, high, low and close determine the look of the daily candlestick. 
 

TYPE OF CHART LIKE CHART LINE ;

CHART LINE 






CHART BAR : 





these two kind of chart are not useful , chart candlestick is famous


TYPE OF ACCOUNTS :

there is 3 types of accounts 

Account Standart and this account is good just for a capital that is more than 1000 ,  3000 $ or more because 

1 LOT = 10 $ 
 mean if you lose or win 10 PIP = 10*10 = 100 $

1 LOT = 10 $
0.1 LOT = 1
0.01 LOT = 0.1 $



MINI Account :

this type of account is good for almost because you can open an account by 100 or 200 $ because it too safe for a smale capital

1 LOT = 1 $ 
0.1 LOT = 0.1 $
0.01 LOT = 0.001 $


MICRO account some use this account , it good but ,, it hard to get some good profit on it  so if you just win 10 PIP 

1 LOT = 0.1 
mean 10 PIP * 0.1 = 1 $ 
it not a good result but it safe and good 


these was the 3 type of account that people use for trading in forex 

After you read these informations , I hope that you benefited a little bit, is only some information in order to understand what is going on around you, you will learn  more things in the next lesson and others sections of this blog ,  see u in  MASTER FOREX STEP BY STEP , ENJOY .