INTRO TO

FOREX
 WHAT IS FOREX?
Forex is an abbreviation for foreign exchange.
Foreign exchange is the largest financial market in the world!
A Forex transaction takes place simply when one currency is traded for
another.
A forex transaction always involves two currencies. You are buying the
value of one and the de-value of the other simultaneously

S S
B E E B
U L L U
Y L L Y
 FOREX LIQUIDITY
FOREX
$5.3 Trillion Per Day

New York Stock Exchange

$22B Per Day
ADVANTAGES OF FOREX TRADING
Small Commissions (commissions vary on your broker)
Low Transaction Costs (spread/bid/ask)!
No Fixed Trade/Risk Size (Lots range from .01 - .10 1.00 , etc)
Low account size to start ! (broker minimums range from $25-300 min)
24 hour market / 5 days per week !
Leverage!!! You can control large amounts of money with small capital.
Allows you to keep your risk management tight w/ nice profit potential.
Can get in and out of trade at any time !
 MARKET HIERARCHY
Interbank market top level foreign-exchange market where banks
exchange different currencies.
Large Commercial Companies companies do business internationally
on a constant basis, they exchange those currencies back and forth and
typically are relevant in the market on a day to day basis.
Governments just like large commercial companies governments
are moving currencies constantly (governments are businesses!)
Central banks affect the Forex market when they adjust interest rates
to control inflation. They also intervene when they want to readjust
exchange rates.
Spot market/retail traders/speculators day traders, people speculating,
investors, researchers, market analysts.
 THE MAJOR SESSIONS

(ALL TIME ARE SUMMER/EST)

London 3 AM 12 PM
New York 8 AM 5 PM
Sydney 6 PM 3 AM (WINTER 4 PM 1 AM)
Tokyo 7 PM 4 AM (WINTER 6 PM 3 AM)
 THE MAJOR CURRENCIES
Country Currency Symbol
Europe Euro EUR
United States Dollar USD
Canada Dollar CAD
Great Britain Pound GBP
Australia Dollar AUD
New Zealand Dollar NZD
Switzerland Frank CHF
Japan Yen JPY
 READING A QUOTE
You would buy the pair if you believe the base currency value will increase.

You would sell the pair if you think the base currency value will decrease.
 BID/ASK
- The bid price is the best available price the
broker is willing to buy the base currency for in
exchange for the quoted currency to sell to
market.

- The ask price is the best price at which your

broker will sell the base currency for in exchange
for the quoted currency. This means the ask price
is the best available price to purchase from the
market.
 WHAT IS A PIP?
Ex: EURJPY 121.716
Price Interest Point (PIP): The unit of
measurement used to express the change in
1 is the pip...
value between two currencies is called a pip. If
6 is the micropip...
EUR/USD moves from 1.2250 to 1.2251, that .
0001 USD rise in value is ONE PIP.
Ex: GBPCHF... 1.40148

4 is the pip...
8 is the micropip...
 LOT SIZE
.01 MICRO LOT - $.10 per pip

.10 MINI LOT - $1.00 per pip

1.00 STANDARD LOT - $10.00 per pip

 HOW MONEY IS MADE
* THIS IS AN EXAMPLE OF A BUY MONEY CAN BE MADE BUYING
OR SELLING A TREND/MOVE.

* about 7 days

.01 MICRO LOT - $.10 per pip

.10 MINI LOT - $1.00 per pip

1.00 STANDARD LOT - $10.00 per pip

SO BASED ON THAT EXAMPLE
WITH A .01 = $53.30 PROFIT
WITH A .10 = $533.00 PROFIT
WITH A 1.00 = $5,330.00 PROFIT

* about 7 days

** Results in the example do not

include broker commissions, etc.
 10 SIMPLE TRADING RULES
Trade on DEMO until you have a PROFITABLE STRATEGY
DO NOT trade when youre STRESSED, EMOTIONAL or DISTRACTED
Stick to ONE pair in the beginning and very gradually expand out into a
second or third otherwise you will become a jack of all pairs and master
of none. Dont be that trader! Focus and Master!
BE PATIENT
BE CONSISTENT ROME WASNT BUILD IN A DAY
BE PREPARED TO LOSE SOME TRADES
NO FAILURE-NO PROGRESS (USE DEMO!)
RISK ONE MICRO LOT (.01) PER $50-100 IN YOUR ACCOUNT
Spend 90% of your time studying, 10% executing
AND NEVER FORGET trading is 90% mental, 10% skill