Forex Trading Lessons
Here at G7FX, we noticed a lack of quality Forex trading educators in the retail sector, so we worked to remedy it by creating our own Forex trading lessons. Nirav used his 16+ years of experience to create our courses, ensuring you will learn everything you need to know about Forex trading. Our courses cover the exact same education you would receive on the job from any of the world’s leading institutions, as we believe everyone should have the same opportunity to succeed as a trader.
We offer two courses here at G7FX, the Foundation Course and the Pro Course. The Foundation Course covers what you would be learning in your first three months on the job, and you can take this course even if you have zero prior knowledge or experience in trading; in fact, we assume you have none and teach you from the ground up.
Our Pro Course builds on everything you will have learnt in the Foundation Course, replicating what you would learn on the job in months three to six. Once you have completed our Pro Course, you will be set to begin trading successfully on the Forex market.
Below, we have gone into further detail on the types of information you will learn through our courses.
Long trading in the foreign exchange market, as with all market trading, means buying currency with the expectation that your purchase will rise in value. As you know, when you trade currency, you trade in pairs, so one currency will be the base currency, with the other being the quote currency. One will always be stronger than the other, long and short; so, when you go long on one currency, you are betting that the base currency will strengthen against the quote currency, thereby rising in value.
Short trading is the opposite of long trading, in that you are assuming one currency in the pair will decline in value as the other rises. With all currency being traded in pairs, one currency will always be stronger than the other, and short trading is when the trader speculates that the value of one currency will decrease.
They borrow shares of the stock they believe will decrease in value, selling these borrowed shares to buyers who are willing to pay the market price. As these are borrowed shares, they must be bought back, and the trader is taking the risk that the value will fall, so they can buy the shares back for a lower price.
When it comes to trading Forex, you need to understand the technical and analytical side of things, and this is where charts come in. There are different types of charts used, the most common of which are line, bar, and candlestick charts.
This is a graphical representation of an asset’s historical price action, and it is the most basic type of charts used. It visually represents the price history using a single, continuous line, which is easy to understand and interpret. However, it only depicts changes in an asset’s closing price over time.
OHLC Bar Charts
Bar charts show far more information than a line chart does. Each bar on the chart shows how prices moved over a specified time period, with a daily bar chart showing the price bar for each day. These usually show OHLC prices – open, high, low, and closing, but can be adjusted to only show HLC – high, low, and close.
The vertical line represents high and low prices, with the horizontal lines representing open and closing prices. These bar charts can also be colour coded; if the close price is above the open price, it can be black or green; if the close price is below the open price, it will be red.
Best Trading Systems
A Forex trading system is a method in which to trade Forex, and it is based on a series of analyses. These analyses determine whether to buy or sell currency pairs, and they set the procedures for determining entry and exit strategy too, along with risk management. This is essentially a rules–based approach to trading currency, and these can be automated or manual.
Trading systems consist of technical signals that create a buy or sell decision when pointing in a direction that has led to profitable trade before. It is a trending plan outlining what a trader should do when the signal has been identified and a journal that captures what was done and why, leading to future analysis.
A manual trading system involves the trader looking for signals and interpreting the data to decide what to do. An automated trading system is where the trader teaches the running software what signals to look for and how to interpret them. This reduces human error and reaction time, and more complex automated systems can include common strategies and signals loaded, so traders can combine approaches.
A trading platform is the software interface that is provided by currency brokers to their customers. This gives them access as traders to the foreign exchange markets, and it can be online, a mobile app, or a downloadable program (or even a combination of the three). Most platforms are made available through broker firms, and Metatrader 4 (MT4) is a standard among platforms.
Analysis is used by day traders so they can determine whether to buy or sell currency pairs. They can use charts in order to technically analyse, but traders can also use economic indicators to analyse whether to buy or sell.
Technical analysis is both automated and manual, where the trader is analysing technical indicators, using resources like charts, and interpreting the data into a decision. This can be done both manually and automated.
Fundamental analysis uses factors such as interest rates, GDP, and other economic data to inform the decision as to whether to buy or sell currency.
Trading Terminology Made Easy for Beginners
We understand that there is a lot of trading terminology to come to grips with, and we have gone into detail about the terminology below to make this easier for you.
Spot Forex, also known as a spot trade or spot transaction, is when a trader purchases a foreign currency with delivery on a specified spot date, usually within two business days. This market trades around the world electronically, and it is the world’s largest market. The spot price refers to the current price of the currency, and it is the price the asset can be sold and bought at instantly.
CFDs, otherwise known as a contract for difference, is a contract between a buyer and seller, and it states that the buyer must pay the seller the difference between the current asset value and its value at contract time. This allows traders an opportunity to profit from price movement without actually owning the underlying assets. A CFD contract doesn’t consider the underlying value, only the price change between entering and exiting the trade.
Pip is otherwise known as percentage in point or price interest point, and it is the smallest price move an exchange rate can make based on Forex market convention. Currency pairs are quoted in terms of pip, and it is one-hundredth of one per cent. In simple terms, a trader will buy or sell a currency whose value is expressed in relationship to another currency, and the movement in the exchange rate is measured in pips, accurate to four decimal places.
Margin trading is the process by which a trader makes a good faith deposit with a broker so they can open and maintain positions in more than one currency. It is essentially a portion of the trader’s account balance, which is set aside in an order trade. You will find the amount of margin required can vary depending on the broker, and it is important to understand margin trading.
In simple terms, it involves borrowing to increase the size of a position, usually to improve returns. It is trading with leverage which, as discussed earlier, can increase the risk along with potential returns.
Leverage in Forex trading is using borrowed funds in order to increase your trading position beyond what you can manage with your account balance. With Forex trading, you can usually get much higher leverage than with any other market, and you usually borrow from a broker. In the Forex market, leverage is commonly as high as 100:1, meaning you can trade up to 100k for every 1k in your account. This type of trading has the potential to increase your profit, but the same applies for your losses too.
Bear market refers to a market that is experiencing prolonged price declines, generally with prices declining by more than 20%. A bear market can be either cyclical, which last for several weeks or a few months, or longer–term, which lasts for several years or decades. You can make money during a bear market with short selling, inverse EFTs, and put options.
The opposite of a bear market, a bull market is the period of time where a market sees prices rise continuously. This is generally when prices rise by 20% after two declines of 20% each, and traders can employ several strategies during this period; increased buy and hold and retracement.
Beta is the measure of a stock’s volatility in relation to the overall market. It measures the expected move in a stock relative to movements in the overall market. A beta greater than 1.0 suggests more volatile stock than the broader market, with a beta lower than 1.0 indicating lower volatility of stock. This is generally a better indicator of short–term risk than long–term.
A broker in Forex trading is a financial services company, and they provide traders access to a platform where they can buy and sell currencies. Clients of a Forex broker include retail currency traders along with larger financial firms trading on behalf of investment banks.
A bid is otherwise known as a bid price in Forex trading, and this is the price for which someone is willing to buy a currency. It is generally lower than an offered (ask) price, and the difference between the two is known as the bid-ask spread.
The bid price is the highest price a buyer is willing to pay, and it is generally arrived at through negotiation between seller and buyer.
Exchange refers to the process of exchanging one currency for another, which happens in the Forex market (foreign exchange market). You trade foreign currency in pairs, so when you buy one, you are selling another.
A trader is always opening and closing positions, and the term close position refers to cancelling out an existing position in the market. This can be either a long close or a short close; a short sale is buying back the security with a long sale selling the security. This is generally initiated by the trader.
A day trader is someone who executes a large volume of both short and long trades, profiting off relatively short-lived price changes. They can employ a variety of techniques, often involving many trades a day and closing positions before the trading day will end.
A dividend is when a company distributes some of its earnings to shareholders, which is something that is determined by the board of directors. Shareholders are generally eligible as long as they own stock before the ex-dividend date.
Blue Chip Stocks
Blue chip stocks are seen as relatively safer investments as they have a proven track record of success and stable growth. They are, however, still subject to volatility and failure, as with any stock.
Contact the Forex Trading Strategies Specialists
As you will have learned from all of the above information, there is a lot you will need to be taught about Forex trading if you are a beginner. This is where we at G7FX come in with our Forex trading courses; Foundation and Pro. We are here to ensure you learn everything there is to know about Forex trading, so you can begin to trade successfully. So, if you have read all of the above information and would like to invest in our courses, you need simply get in touch.
You can get in touch with the G7FX team by filling out our online form, leaving your details and your enquiry. We will respond as soon as possible via your preferred method of contact to discuss your requirements and answer any questions you may have.
You can also contact our founder, Nirav, directly at email@example.com. He is always happy to talk to potential students, as long as it is outside of trading hours.