Make Forex Trading SImple

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2. Chapter 1: OPENINGTHE GATES OF FOREX Chapter 2: CURRENCY,THE MAINTRADED INSTRUMENT Chapter 3: WELCOMETOTHE UNPREDICTABLE WORLD OFTRADING Chapter 4: TOOLS NECESSARYTO PREDICTTHE MARKET Chapter 5: TRADING INACTION: 5THINGSYOU MUSTKNOW Chapter 6: READYTO START www.ifcmarkets.com Click heretoshare

3. CHAPTER 1 OPENINGTHE GATES OF FOREX YoumayhaveaskedyourselfwhyyouaregettinginterestedintheForexmarket,whatattractsyouthatmuchandwhyyouhave decidedtostarttrading.Actually,theremaybemanyreasons,butletusnotethatthemostimportantoneistheindependence. TheadvancementoftheInternetmadethemarketavailablearoundtheglobeandthuspossibleforpeopletotradeonline.The reasonofthegrowinginterestisthefinancialindependencewhichispossibletogainthroughgoing deepintoForexandtrading wisely.Nomatteryouareadoctor,teacher,managerorajournalist,stillyoumaybeinvolvedinthislimitlessmarket.Hereyoudo not havetodealwithanybossandbaresomeone’sappealoranger;youareaccountableonlytoyourpersonalityandthusarefree tomakeyourowndecisions. Areyouinterested?LetusintroduceyousomeimportantfeaturesaboutForexmarket,whichwillhelpyouinstudyingthisinterest-ingareaandobtainingprofitfromit. What? Forordinary person not engagedinForex trading, it isveryeasy to explain the definition ofForexwith an exampleoftravelling to different countries. When ar- rivingatone country, the firstthing todoforavisitor isto exchangethe money ofhis/her country with the currency ofthe particular country. Thisprocess isitself participationinForexmarket- exchangeone currency foranother. Who? Ingeneral,the Forexmarket iscomprised offourdifferent groups.The mostinfluentialparticipantsofthemarketarethe majorbanks.Afewofthelargestbanksthatmakeupthein- terbankmarketincludeUBS,BarclaysCapital, DeutscheBank, andCitigroup.Inaddition,somegovernments andtheircen- tral banks,suchastheEuropeanCentralBank,theBankofEn- gland, andtheFederalReserve, arecommonlyinvolvedinthis grouptoo.Theaimofsuchmarketplayersascentralbanksis notgettingaprofit,butadjustingthecurrencyrates,andthus, theeconomyoftheircountries.Veryoften,centralbanksmake dealsnotdirectly,butthroughoneormorecommercialbanks, concealingtheiractivities.Infact,itbecomesobviousthatthese banksarenot‘’just’’makingdeals,butalsosuggesttheirown prices,thustheyareveryactiveparticipants.Activeparticipants of themarket,asusual,makedealsuptomillionsofUSDand donotusemargintrading.InForex,suchparticipantsarecalled marketmakers.Inadditiontoactiveparticipants,therearepas- siveones,whichalreadybelongtothesecondlayer. ThetermForexstands fortheForeignExchangeandcan be defined asan internationalcurrency market. Forex is veryunique initsessencebecauseitis everywhere neglectingthe factor oftime zone and geography.In contrasttootherphysicalmarkets,wheremonopolycan exist,inForexmarket despitethe verydifferent market participants,there isnoanydominance,andthemarket remains outofanycontrol. Aquestionmay arise: what is exchanged on Forex? Theanswer maybe quite surprising foryou:absolute- ly“nothing”. Allthe instruments, including the most popular currencies arenotphysicallyexchangedonthe foreign exchangemarket. Theprices ofallForeign Ex- changeinstrumentsare calculatedaccordingto their marketprice. Thesecondlayerbelongstotheinvestmentfunds,andlarge corporations.Thepurposeofparticipationis assuredlybusi- ness.These companies, performingcurrencyspeculations, put theirmoneyinsecuritiesof governments andcorporationsin various countries.Oneofthelargestinvestmentfundsinthe worldis‘’Quantum’’ofGeorgeSoros.Fundsthatareavailable equaltobillionsofdollars:infact,theycanattractbillionsof dollarsofborrowedmoney,sothefundscanwithstandeven thecentralbankinterventionintheforeignexchangemarket. Therate ofthe currency isalwayschanging,fluctuates, and this happensbecauseofdifferent factors. Due to these fluctuationsitbecomes possible tomakeaprofit fromspeculativetrades.ForeignExchangeistheWorld’s largest and most active market. Itoperatesevery day except the weekends,and itsvolume reaches upto$5 trillionadayandsurely,thevolume is different forvari- ousparticipants. www.ifcmarkets.com Click heretoshare

4. When? Ingeneral,theForexmarketoperates 24/5(fromMondayto Friday).However,4 marketsessionsaredistinguished:Sydney session, theTokyosession, theLondonsession, and,theNew Yorksession. How? YoumayhaveaquestionhowtobeinvolvedinForex market?Theanswer isquite simple:throughbroker- age firms!Brokersarethe ones whogiveanoppor- tunitytosmallinvestorstoinitiateoperations onthe Forexmarket. NewYorkopensat8:00amto5:00pmEST(EDT) Tokyoopensat7:00pmto4:00amEST(EDT) Sydneyopensat5:00pmto2:00amEST(EDT) Londonopensat3:00amto12:00noonEST(EDT) Foradvantageoustradingitismoresuitabletotradeduringthe highliquidity ofthemarket,whichtakesplacewhenseveral countriesaretradingatthesametime.Ineachtimezone across theworld,Forexmarketsoperateindifferenttimezones.Thus, totakeadvantageofsignificanttradingvolume,itisworthyto findoutwhenForexmarkethoursindifferentcountriesoverlap. So,itbecomesobviousthatincaseoflowliquiditytakingvery highprofitismuchmoredifficult,thatiswhyexperiencedtrad- ersprefertradingwhenthereishighliquidityand morechances forhighprofits. Forbecoming aclientofabroker,oneneeds toopen anaccount andmakeadeposit. Thedeposit require- ments varyfrombroker to broker.Forinstance,IFC Marketsrequires aminimum of$1perstarting trad- ing.For thepurpose ofincreasingtheclient’sprofits, everycompany establishes certaincreditlevel,which iscalledleverage.The depositedamount ismultiplied withtheleveragesize,andthetradertradeswithgreat- erlot,whilelosingonlythemoneyhehasinvestedon his/herown.Thus,itmaybeconcludedthatfortrading with100,000lotincaseof1:100leverage,$1000depos- itisrequired. Why? LIQUIDITY: Forexmarket isdifferent from the markets where people buyorsellproducts,property,etc.Forin- stance, whensellinganapartment, howmanybuyerscan youfindforonly1second? Zero…Howmany ofthem canyoufindduringaday?–Maybe3-4.Incontrast,Forex market does not have suchlimits,asatrader mayopen positions and makedealswiththe market makeronlyin 1 second.Highliquidityishighlyattractivepointforevery investorbecauseitenables thepossibilityofenteringand exitingthemarketwithanyvolume. closed,thushurryuptomanageyourtrading untilFriday night. COSTS:TheclientsellsthetradedcurrencywiththeBidprice andbuyswiththeAskprice.Thedifferencebetweenthemis calledSpread.Surely,thisspread is differentdependingon thecurrencypairandtheclientspreferlowspread,because, infact,itisthecostoftheirtrading activity.Thespread is greater forthosecurrenciesthataretraded lessfrequently, thusthespreadsofmajorcurrenciesisquitelow.IFCMarkets offerslowandfixedspreads toitsclientswhichmakesthe companymoreattractivefortheclients. PROMPTNESSANDAVAILABILITY: AsForexmarketop- erates for24hours,the access ispossible atanytimein contrasttostockmarket, whichisopen onlyduring the workinghours,whichsurelymaynotcorrespond toyour timezone.Forextradersdonotneedtowaittoreactonan event asithappensinother markets.24hoursoperation letstraderstradewhenevertheylike:afterwork,atnights, duringtheirleisuretime,etc.Fortradingoneneedsjustto havealaptop oramobile andInternetconnection. Take intoconsiderationthat atthe weekendsForexmarket is LEVERAGE:Alltradershaveanopportunitytotradewith greater volumeduetotheleverage whichisprovided by the broker.Morepreciselysaying,itisthe availabilityto makeprofitfromalargepositioninthemarketfor asmall cost,known asmargin.Differentcompaniesprovide dif- ferent leverage sizes.Forinstance, IFCMarketssuggests upto1:400leverage.Therearesomeleverage limitations dependingontheaccount types. www.ifcmarkets.com Click heretoshare

5. CHAPTER2 CURRENCY,THE MAINTRADED INSTRUMENT Currencies:PricesandthePips ThemajorinstrumentintheForeignExchangeisthecur- rency. Currencies are written inISOcodes, which have becomeatraditional internationalpractice.Thesecodes haveonly3characters:thefirsttwocharactersstand for the country name and the lastcharacterstands forthe currencyname. selling one unit ofbase currency. Certainly you buy apairwhen you predict itwillappreciateand sellit, when youthinkthat itwilldepreciate.Forexample, in caseofthequote likeUSD/CHF0.9355,itbecomesob- viousthat what isbeing valued (thebase currency) is one USDand that itsvalue isgiven interms ofSwiss Franc(the quotecurrency). Ingeneral, the currencies arequotedagainst the USdollar.However,there area fewcurrencies,whereUSDollarisquotedagainst (Brit- ishPounds (GBP),Euros (EUR),Australiandollars(AUD) andNewZealand dollars(NZD)). In Forex market allthe currencies are quotedinpairs (EUR/USD,GBP/USD), becauseintradingone needs to sellone currency forbuying another,orviceversa.The firstcurrency isknowntobethebase currency,whereas thesecondoneisthequotecurrency. Thereisameasurementofthechangeinvaluebetween the two currencies, which iscalled aPip.Thenumbers after‘’.’’ arecalledpips.Infact,the pipsarethe smallest changesinthe priceofthe currency pairs.Whensaying thattherewasachangewith1pip,inquotationitimplies tobeachangeof 0,0001(thefourthsymbolaftercoma). Pipsareneeded forcalculatingprofit/loss andthediffer- encebetweenthepricesofBUY/SELL. When openingaBUYposition, the trader makes his/ her decision based on the exchange rate (currency price),which provides informationaboutthe number ofrequiredunitsofthequotecurrencytoBUYoneunit ofbase currency. InSELL position, as well,the deci- sionisbased onthe exchangerate,whichshows how many units ofthe quotecurrency you willget when TypesofCurrencies:Major,MinorandCommodity ThelistofMajorCurrenciesincludesallthosecurrenciesthat aremostactivelytraded inthemarket.Thepricesofmajor currenciesarelessunstablethanthoseofothercurrencies. USD AmericanDollar EUR InternationalEuropeanCurrency-Euro AUD Aussie,AustralianDollar CAD CanadianDollar GBP BritishPoundSterling CHF SWF-Swissie,SwissFrank whicharebasedontheexportofrawmaterials-oil,gas,met- als,etc. Actually,thereisaquitelargerangeofsuchcurren- cies,whichmayassuredlybeincludedinthislist,butthemost importantonesareAustraliandollar,Canadiandollarandthe NewZealanddollar.Itis alsoworthtoknowthatthemajor currencypairsalwaysarethosequotedwiththeUSDollar. Itshouldbenotedthattherearecurrencypairswhichdonot haveUSDneitherinbasenorinquotecurrency;suchcurren- cypairsarecalledcrosspairs.Ingeneral,experiencedtraders dealwithcrosspairs,asforeffectivetradingwiththemitisre- quiredtohavegoodeconomicknowledgeofdifferentcoun- tries.Herearesomeexamplesofcrosspairs:GBP/JPY,EUR/JPY andGBP/EUR. JPY YENJapaneseYen TherestcurrenciesareconsideredtobetheMinorCurrencies. And,finallytheCommoditycurrenciesareofthosecountries, www.ifcmarkets.com Click heretoshare

6. CHAPTER 3 WELCOMETOTHE UNPREDICTABLE WORLD OFTRADING Basically,currencypairsaretradedin100,000units(standardlots),10,000units(minilots)or1,000units(microlots). Standard=1lot=100000 Mini=0.1lot=10000 Micro=0.01lot=1000 Justforkeepinginmindlet’sbringanexample.Ifyouopenapositionof1lotforGBP/USDfortheaskpriceof1.5000,youarepur- chasing100,000BritishPoundwhileselling150,000USD.Incaseofopeningamicroposition(0.01lot),forGBP/USDforthebid priceof1,5000youarepurchasing1000USDollars,whileselling1,500BritishPound. Buy/Sell=Long/Short Before opening anyposition,everytraderhastodetermine whether toopenaBUYorSELLposition.Ifyouwanttobuy thebasecurrencyandsellthequotedcurrency,thismeans thatyouareexpecting thebasecurrencytorisesoastosell itbackathigherprice.Suchpositionsareusedtobeknown asLongpositions.Incontrast,ifyouwanttosellthebase currencyforbuyingaquote currency,thismeans that you wantthebasecurrencytofallinpricesoastobuyitatalow- erprice. SuchpositionsareknowntobeasShortpositions. So,keepinmind,thatBuy=LongandSell=Short. hastwoprices-BidPriceandAskPrice.Thesepairsareusual- lydenotedbyaslash“/”,whereatfrontstandstherateofBuy, andafter-therateof Sell,suchasUSD/JPY104.75/104.85. Thebidpriceisthepriceatwhichthebrokerisreadytobuy thebasecurrencyforthequotedone,whiletheaskprice isthepriceatwhichthebrokerissellingthebasecurrency forthequotedone.Soitcanbeunderstoodthat thecon- cepts ofbuyingandsellinginrelationtoyouareactually “reversed.”Buyingandsellinginthisformulationisnotper- formedbyyou, butbythepartyofferingyouaquotation. Morepreciselysaying,ifyouneed tobuyabasecurrency, youneedtolookatAskprice,whileselling,youneedtotake intoconsiderationtheBidprice. Whenspeakingaboutthepricesofthecurrencies,wehave alreadymentionedthattheirpricesarecalledrates.Anyway, itisveryimportanttomentionthatinForexevery quotation TradingExample Let’sassume that the EUR/USDexchangerate is1.3088 /1.3090.Basedonsome technical analysisyouhave as- sumedthat theeuroisgoing tofallinvalue. That iswhy youmakeadecisiontobuy10,000EUR(0,1lot)at1.3090 (theaskprice).So,youbought10,000EURandpaid13,090 USDollarsforthat. need tohave130.9$depositedonyouraccountsoasto makethattrade. Ifyourpredictionscometrue,andEurorises,youthende- cidetosellat1.3199/1.4001. Inthiscaseyouhavetosell yourEurosatBidprice(1.3199).Thus,wearebuyingback theUSD,butsellingathigher price(1.3199).So,weend upwith13,199USD.Asthebrokertakesthe13,090USD, ourprofitbecomes109$. Noonehastohavethat13,090USDollarsinordertobuy Euro.Yourdepositedmoney maybemuch less,but due totheleverage providedbythebrokeryouwillhavethe opportunitytotradewithhighvolumes. Youjustneedto depositanamount,whichisconsideredtobethemargin forproviding youwithhigher virtualcredit amount.For example, youmayhave 1:100leverage. Inthiscaseyou www.ifcmarkets.com Click heretoshare

7. CHAPTER4 TOOLS NECESSARYTO PREDICTTHE MARKET Pricemovementsdependonverymanyfactorssuchaseconomicconditions,politicalpolicies,economicannouncements made byinfluentialofficials,andmanymore.So,itisstillpossibletopredictthemarket.Therearemainly3analyticalmethodsinForex market:technicalAnalytics,FundamentalandSentimental.Wewillrefertoallofthemseparately. TechnicalAnalysis Thistypeofanalysisisbased onthe assumption that the trendoftheexchangerateisalreadyincorporatedinthehis- toryoftheirpastfluctuations.Thebasisofsuchanassump- tionisthatthehistory tendstorepeat.Atrader,usingtechni- cal analysis,buildschartsofcurrencyrates,findstrendlines onthosecharts,determinestheshapeofatrendreversaland calculatesvariousmathematical indicators, onthebasisof whichmakesthedecisiontoopenalongorshortposition. Speaking abouttechnical analysisitishighlyimportant tomentionthe tools that areused bythe traders most often:technical indicators and patterns.Thereisaquite largerange ofsuchtools,but wewillillustrate the most usedones: •TRENDLINES-lines joininghigherandhigherlowpoints (uptrend)orlowerandlowerhighpoints(downtrend).Pric- esbreakingthroughtheselinescanpointoutthebeginning ofapossiblechangeinpricedirection. Certainlyitisimportanttounderstandthattheconcretepre- dictionisimpossible,because thefactorsaffectingthecur- rencyratesarephysiological,political,economic,andsoon. Thereis noanyphysicallawthataffectsthemarket,based onwhichanalyticsmaymake100%predictions. •MOVINGAVERAGES-smooth outpastmovementsand indicateapossiblenewtrendifthepricemovesthroughthe average. •REVERSALPATTERNS-suchashead-and-shoulders,tops andbottoms,tripletopsandroundedtops. IntechnicalanalysisoftheForexmarkettradingframesare generally considered.Infact,the timeframesarethe fol- lowing:1minute,5minutes,15,30,60,1day,1weekand1 month.Numericalstudyofthetimeframesisnotverycom- fortable,andisalmostneverusedby tradersforforecasting. Mainly,temporarychartsarebuilt. •SUPPORTANDRESISTANCE-pricepointsthatamarket hashaddifficultymovingthrough inthepast. •RELATIVESTRENGTHINDICATORS -showwhether the marketcanbeconsidered overbought. ByChartanalysisitisimpliedthatforpredicting themarket solelygraphicalimagesofthemarketareused(pricegraph- ics, volume graphics) and its graphical models.Actually these arethesimplestmethods astheydonotrequireany software.So,5basictypesofchartsmaybedistinguished: Tickchart Linechart Barchart Japanesecandlesticks Pointandfigurechart •FIBONACCI LEVELS-levelsthat indicate acontinued moveinthecurrentdirectionisbreached. • MACD- Moving Average Convergences/divergerence usedtohelpspotearlytrendsandtrendreversals. •CYCLICITYINDICATORS-marketsgothrough cyclesof bullishandbearishphaseswithperiodsinwhichtheytend toreturn totheiraverage. Cyclicityindicators help reveal suchcycles. www.ifcmarkets.com Click heretoshare

8. FundamentalAnalysis Thistype ofanalysisstudies the macroeconomicevents, politicalnewsandother events oftheworldwhichsome- howaffecttheratesofthecurrencies. Themaindifference betweenthefundamentalandTechnicalanalysisisthatthe Fundamentaloneisbasedontheprinciplethatthepricesof thecurrenciesontheForexmarketarethereflectionofsup- plyanddemand,whichintheirturnsdependonfundamen- talfactorsoftheeconomy.Incontrast,technicalanalystsdo notconsiderthestudyof thereasonsof pricechanges im- portantandputanemphasisonlyonthestudyoftheprices themselves. changed.Incontrast,fundamentalanalystspayhighatten- tiontothefactorsaffectingthatchange. So,whatfactorshavethemostfocalaffectonthecurrency pricechanges? GDP(GrossDomesticProduct) Thevolumeanddynamics ofgovernmentexpenditure Thevolumeanddynamics of incometothestatebudget Deficit/surplusofthebudget Theaggregateconsumption Theaggregateprivateinvestment Thelevelofprivatesavings Thevolumeoftheexport Thevolumeoftheimport Unemployment Inflation Itshouldbementionedthattradersmaynotwishtospend theirtimeonstudying Fundamentalanalysisanddoing it themselves.Mostofalltheypreferfollowingtheprofession- alfinancialanalysts.Suchkindofanalysisis available,be- causeitispublishedinnewspapers,ispresentinWeb,onTV andRadio.Inaddition,therearebrokerswhichprovidetheir ownanalytics ontheirwebsiteswhichmakestheprocessof tradingmuchmoreeasyforthetraders. Eventsaffectingthemarketmaybedistinguishedbetween 2groups:expectedandunexpected.Theseevents include thepublication of variouseconomicindicators, whichcon- tributetopredictionofupcomingimportantevents.Incon- trast,unexpected eventsmaynotbeforecasted inanyway becausethegroupofsucheventsincludesnaturaldisasters, politicalrevolutions,actsofterrorism,etc. AccordingtoFundamental analysispredicting the chang- esofthe pricesispossible through predicting the factors which affect the supply and demand.So,the difference betweenthe two analysismethodsisthe following:for technicalanalystsifthepriceshavechanged,then“some- thing”haschangedinsupplyordemand,that“something” isnotimportantanylongerbecausethepriceshavealready SentimentalAnalysis Thenameoftheanalysisalreadyimpliesthatitdealswiththe moodandsentiments,andsurelyinthiscontextitdealswith thesentimentsofthemarketparticipants-traders.Incontrast totechnicalanalysis,whichfocusesonthepastmovements, sentimentalanalysisattemptsto realizewhatisdrivingtrader decisionsfornowandtheimmediatefuture.Duringthetrad- ingprocesseveryparticipanthashis/heropinion,andsurely somegroupsareformed, thatasaresultmayinfluencethe outcomeofthetrading.So,theyformageneralsentimentof themarket. Understanding andassessment of sentiment is quiteaneffectiveopportunity tounderstandhowitspartici- pantsaregoingtoactinpresentandnearfuture. www.ifcmarkets.com Click heretoshare

9. CHAPTER5 TRADING INACTION: 5THINGSYOU MUSTKNOW 1entways.Someofthemjudgethemarketasavery “Whenyouknowbetteryoudobetter.” DifferentpeoplethinkaboutForexmarketindiffer- those, who have economic education, are able to be in- volvedinForex. Everyindividualmaystartstudying Forex andneeds toknowthe basicthings inorder tostart.The mostimportantthingsnecessarytotradersistheanalytics, whichisapreconditiontosuccess.Besidestheanalytics,the beginners shouldunderstandthatevenwhenstartingtrad- ingtheymayalwaysdeveloptheirskills,becauseForexisnot anareawithanylimitsintermsofadvancement,thusevery dayispossibletolearnanewthing,whichhasbecomequite easywiththehelpofInternet. confusingsphere,andthinkthat tradinginForex isverydifficult.Incontrast,othersthinkthattradingisvery easyanddoesnotrequireany knowledge.So,whoisright? Actually,bothviewsarewrong:Forexmarketisnotacom- plicated and difficultone,but atthe same timeeveryone whowantstostarttradingneedstohaveknowledge about themarketsoas tobeabletomakeprofitratherthanlosses fromit.Surely,thisdoesnotmean that,forexample,only 2 JustDoityourself.Tradingplan. TradinginForeign Exchange market isavery riskyprocess.Mainly,thereason people loseat thebeginningisthat theydonothaveenough •Yourobjectiveintrading–itshouldbeyourtarget oran expectedresult(intermsofprofit)fromyourtrading. •Useoftradingstrategiesthathavebeenprovedtoworkin thepast. knowledge,havenotevertrainedandstudied themarket, donotknowhowitworks.Ofcourseinthiscaseitiseasyto sufferlosses. •Tradingstrategies,useofanalysisbasedonwhichyouwill decidetoenterthemarket. Youshouldhaveyourtradingplanbeforestarting trading. Neverfollow someone’sexperience,because somebody’s strategywillnotnecessarilyworkforyou.Youhadbetterfol- lowyourownmarketviews,risktolerance levelandmake yourowntradingplan.Your tradinglanshouldincludethe followingessentialaspects: •Howyouwilldecidewhentoexitatrade.Thisisalsoare- sultofyourunderstandingofthetradingstrategiesandthe properuseoftechnicalanalysisandchartpatterns. •Definitionofyourrisk-managementsystem. 3 Knowledgeisofnovalueunlessyouputitintopractice. Nomatter how curious you are towards the Forexmarket,youshouldunderstandthatinor- dertohaveabetter understandingofthemar- nitytotryyourselfinDemoaccountwithoutanydeadline. Bythiswayyouwillstudyeverything youwillneed infu- turerealtrading.Thus,openarealaccount andinvestreal moneyonlywhenyoufeelsureyouarereadyfor entering theworldoftrading. ket,andthewaythequotationworks,youneed firstofall tradeinDemoaccount.IFCMarketsgivesyouanopportu- www.ifcmarkets.com Click heretoshare

10. 4 You’dbettermanageyourrisks! •Youdonotneed toriskmorethan1% ofyour totalcapital.Thiswillhelpyoutoavoidsuffering highlossesonanytrade. •Determineyourpositionsizebasedonhowmuchyouwill loseifthestopistriggered attheindicatedlevel,andthe1 percentrule. Youshouldknowinadvance howmuchthe likelymaximumlosswillbeonthetrade. •Useofstoplosses. Theseordersareforclosingyourposi- tionataparticularpricesoastolimitinglosses. Stoplosses areessentialforriskmanagement,andrequireclosestudy sothat youusethem appropriately foryourposition size andamount atrisk. •Controlyouremotions,whichmayoverrulethesituation andmakeyourtrading stressfulandnervous.Don’tforget thatrationalityisthekeytosuccessfultrading. 5 Confidence–halfthebattle. Itwasalreadymentionedabouttherisky charac- teroftrading.Inspiteofthedifferentmethods ofanalysisthat areusedbythetraders,stillev- maygoinanother direction,thus resulting inhighlosses. Anyway,themostimportantthinkwhiletradingistoremain psychologicallybalanced andstrong, because whenfalling intodepression, youmaynotmakearationaldecision.You justneed toberelaxedsoasnotactnervouslyandirratio- nally. eryone shouldknowthat themarketcannot bepredicted by100%.Surely,peopleinvestmuchmoneyinForex,andit sometimes turntobeveryineffectivebecause themarket www.ifcmarkets.com Click heretoshare

11. CHAPTER6 READYTO START Chooseabroker Thechoiceofbrokeris veryimportantbecausethetrad- erdealswithitregardinganymatterandsurelyitisvery importanttorefertoatrusted one,withwhichyoumay workforalong time.Herearethe most importantfea- turestotakeintoconsideration: oncommodities.Onemore thing totakeintoaccountis fixedspreads. So,payspecialattentiontothespreadsto befixed. DEPOSITMETHODS–the web siteshould alsocontain those methodsthat areimplementedfortransferring in- vestment.Thesemethodsarealsospecificforeachbroker. Another importantpoint isthat thebrokeragecompany beREGISTEREDin aspecificplaceunder aspecificnum- ber.Thelegalityofthebrokerservesasastimulatingfac- torfortraders.Afterall,everyoneneeds tobeinvolvedin legalandsecureoperations. FOREXEDUCATION –inthissection one isable toget ageneralnotion aboutForextrading, particularly how tradingisrealizedinForex,whattheForexanalysismeth- odsare,howtohandle them, whatmargintrade is,what oneneeds toknowaboutcurrencypairsetc.. CONTACTMEANS–withoutanycontactmeansabroker- agecompanycannotbeconsideredaproperlyoperating one.Amongallcontactmeans (Telephone,E-Mail,Skype, Callback,and LiveChat)livesupportplaysaverysignif- icant role.It partially representsthe company’s image, itsquality.Themorepunctual,themoreprecise itis,the higherthecompany’sratingwillbe. PLATFORMS–everybrokeragecompanysuggestsacou- pleoftradingplatforms,moreoverabrokeragecompany providing itsownplatform islikelytohaveanadvantage over others. Proceduresfor openingan accountwith each ofthem aretobe describedindetails; otherwise, traders willfacerealdifficulties. ACCOUNTTYPES–eachbrokeragecompanyhasvarious accounttypes.Theydifferfromeach other byminimum andmaximum deposits,aswellasbyminimumandmax- imumleverage ratios. Theratingofthecompanyalsodependsontheabilityto TRANSFER MONEYASFASTASPOSSIBLE.Thevelocity oftransfersisoneoftheindicatorsofabrokeragecompa- nytobehighly-qualified. TRADING INSTRUMENTS – this is a very significant point, since they arenot the same forallbrokers. They greatly differamongthe brokeragecompanies.Thatdif- ference liesinthe varietyofcurrency pairsavailable for trading,aswellasinthevarietyofContractforDifference trading. Forexampleone brokeragecompanymaycre- ate an opportunityto trade with CFDson equities, an- other onewithCFDsonindices,thethirdonewithCFDs Havingalltheinformationabovewritteninmindandthe feeling ofenthusiasm,you may already start studying thisinterestingmarket.Forsome ofyouitmaybeanew sphereofactivity,and youwillneed tobe patientand positiveinordertosucceed. Spend yourtimeeffectively and youwilldefinitelymakehighprofitsfromForex.Be risky,as“Nothingventurednothinggained.” Click heretoshare www.ifcmarkets.com

12. ForeignExchangeBooks ForexfortheBeginners ByViktorBarishpolets CurrencyOperations BySourenLiselott EssentialsofForeignExchangeTrading ByJamesChen CurrencyTradingforDummies ByMarkGalantandBrianDolan AnIntroductiontoEquityMarkets ByReuters FundamentalAnalysisofInternationalCurrencymarkets ByLikhovidovV.N. InternetSources http://www.ifcmarkets.com/en/trading-psychology Click heretoshare www.ifcmarkets.com