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Qexpert.com
FOREX TRADING GUIDE
V.2.0
BEGINNERS & SEMI-ADVANCED FOREX TRADERS

Foreign Exchange Trading Guide

“Making Money by Trading Forex

Currencies”

Forex Trading Guide v2.0 -Copyright © May 2014

George Protonotarios ©-All rights reserved worldwide
Distribution by Qexpert.com

www.Qexpert.com
FOREX TRADING GUIDE v.2.0
“Making Money by Trading Forex Currencies”
The Basics for Beginners and
Semi-Advanced Traders

-TABLE OF CONTENTS-

1. What is Forex all about? ...............................................

2. Two Categories of Forex Brokers..............................

3. Why so many People Trade Forex? .........................

4. Forex Bonus Promotions................................................

5. Forex Trading Rebates....................................................

6. Six Different Forex Trading Styles............................

7. Live Trading Signals & Forex Robots.......................

8. Useful Forex Trading Resources.................................

9. Forex Glossary………………………………………………….

Forex Guide v.2.0 – Qexpert.com 2 / 52

 1. What is Forex all about?

What is Forex:

Forex means FOReign EXchange and it is a global market where the world’s
currencies are traded, one currency against another. Central Banks, Commercial
Banks, Large and Small Corporations, Institutional Investors, Individual Traders and
Common Tourists occasionally need to exchange one currency for another.

Examples:

Take for example an importer who is based in the US and wants to import 5
Mercedes Trucks from Germany. He must exchange US Dollars for the European
Currency (EUR) in order to pay for his import, so he must make a transaction in the
Forex Market.

■ Importer Buys EUR and sells USD

In the opposite example, a tourist from Germany wants to visit New York so in order
to pay for his hotel he must exchange Euros for US Dollars. This transaction will also
be made in the Forex market.

■ Tourist Buys USD and sells EUR

Forex Currency Pairs & Main Categories

Currencies are traded in pairs, you buy one and at the same time you sell another
currency. In any currency pair (in the above example EURUSD) the purchased
currency is called the Base Currency (EUR) and the sold currency is called the Quote
Currency (USD).

There are three Main Categories of Forex Currencies:

i) Forex Majors (the most popular and traded pairs: EURUSD, GBPUSD,
USDJPY, USDCHF, USDCAD, AUDUSD and NZDUSD)
ii) Forex Minors (less popular pairs and thus more expensive to trade)
iii) Forex Exotics (no-popularity and thus very expensive to trade)
What is a Forex Lot?
A Forex Lot is the standard unit size of a Forex transaction. There are 3 different lot
sizes:
■ Micro Lot Size (equals $1,000) → Suitable for Forex Beginners
■ Mini Lot Size (equals $10,000) → Suitable for Semi-Advanced Forex Traders
■ Standard Lot Size (equals $100,000) → Suitable for Advanced and Pro Traders

But where is the opportunity to make money after all?

Currencies are not traded in fixed prices -instead they are part of a free floating
trading system. Every order for buying / selling a Forex currency is a factor creating
either demand or supply in the market. Even tiny fluctuations in this free-floating
system can be transformed into huge profits using the ability of trading leverage (as
it will be described afterwards in Chapter-3).

Where is the Forex Market Situated?

All currency transactions take place within the Forex Market. Where is Forex
situated? Actually nowhere specifically, Forex operates as a non-centralized network
such is the World Wide Web. All transactions are executed within the Electronic
Network of Banks (called the ECN network). There are of course several physical
Financial Centers around the world. These financial centers are found in major
capital cities such is New York, London, Tokyo, Sydney etc.

Today Foreign Exchange is by far the largest market in the world. Forex has
become so huge that volumes exceed today 5 trillion USD only in a single
day.

Forex Market Trading Hours

The Foreign Exchange market is open 24/5 between Mondays to Fridays. The Forex
daily activity is divided into 4 separate sessions:

(1) New York Session, 8:00 am to 5:00 pm EST

(2) Tokyo Session, 7:00 pm to 4:00 am EST
(3) Sydney Session, 5:00 pm to 2:00 am EST
(4) London Session, 3:00 am to 12:00 noon EST
Forex Market Overlaps

Forex overlaps occur when two of the above sessions are opened simultaneously.
Here are the three Forex Session Overlaps:

(i) New York and London Session Overlap: 8:00 am to 12:00 noon EST
(ii) Sydney and Tokyo Session Overlap: 7:00 pm to 2:00 am EST
(iii) London and Tokyo Session Overlap: 3:00 am to 4:00am EST

During these overlaps, both trading activity and market liquidity are maximized.
Many traders select to execute orders only during these overlaps.
To highlight the importance of time when trading Forex, just think that there are
automated systems trading exclusively the London and Tokyo Overlap. That means
that during the other sessions remain inactive.

Moreover, there are automated systems trading only as the Asian Session begins.
These short-trading systems are commonly scalping the market. Many of these
Scalping Systems are presented in Chapter-7.

So what is Forex Scalping Then?

Scalping is a promising way of trading Forex based on the assumption that you hold
state-of-the-art trading technology and the right system to do the job. Scalping
Forex means opening and closing trading positions lasting less than one minute and
targeting returns as low as 0.001%. Those traders who scalp the market are called
scalpers. This is a common trading style and you may find more trading styles at
Chapter-6.

Why should anyone targeting tiny returns of 0.01%?

Wait until the next chapter, the chapter about trading leverage, and you will
understand the reason why.
 Online Forex Platforms
What is a Forex Trading Platform?

A Forex Trading platform is simply your ticket to Online Forex Trading. A Trading
Platform is working like a bridge between you and your Forex Broker. When you
execute a trading order (for example selling British Sterling against the US Dollar)
this order is passing instantly from your platform to your broker. Then again almost
instantly it is passing to the Forex Market.

The fantastic thing is that almost all Forex Trading Platforms (Desktop and Mobile)
are offered for free to download and to use. Freeware and open source software
matters when you trade Forex. The industry’s standard platform is the MetaTrader4
platform from Metaquotes. This platform is called also MT4 and allows manual and
automated trading in both desktop and mobile devices.

Almost all Trading Platforms today offer features such is the use of indicators,
technical analysis tools, trading on charts, 1-click-trading, news alerts etc.

■ Learn the basics about Forex Trading at the web-site What-is-Forex.com

» What-is-Forex.com Learning

Here is some basic information and download links of popular Forex Platforms:

WEBTRADER FOREX PLATFORM

■ Info: The easiest-to-use category of Forex Platforms. Forex brokers provide their
own Web-Traders. As the name suggest it’s 100% web-based and no software
installation is required. The disadvantage of a web-trader platform is that it can not
perform complicated tasks as automated trading and Expert Advisors. Moreover, the
variety of trading orders is usually limited to basic order types.
■ Download: Each Broker offers its own web-trader
■ Experience Level: Beginners and Semi-Advanced Traders
METATRADER-4 or MT-4

■ Info: MT4 is a clear Forex industry’s standard. Every broker that respects himself
must offer MT4 or at least a MT4 bridge. This platform is essential for complicated
tasks as Forex Robots (EAs). The disadvantage of MT4 is mainly found on what
concerns the money management. Beginners will find it really difficult to execute the
right order sizes. It is highly recommended for beginners to use MT4 in micro-lot
account sizes so that they will be able to learn how to use MT4 in tiny risk.
■ Download: » Download here for free at MetaQuotes
■ Experience Level: Advanced and Professional Traders

NINJA TRADER FOREX PLATFORM

■ Info: Very advanced Forex platform offering high technology and rich charting
capabilities. The disadvantage here is that only a few Forex brokers support it. In
general keep in mind that the wide popularity of any platform means also a lot of
providers supporting it. NinjaTrader has everything except popularity.
■ Download: » Download here NinjaTrader
■ Experience Level: Advanced and Professional Traders
cTRADER FOREX PLATFORM

■ Info: The same as NinjaTrader. cTrader offers exceptional capabilities including

advanced charting, market depth etc. As concerns popularity not many Forex brokers
support it but it is more popular than NinjaTrader.
■ Download: » Download cTrader here
■ Experience Level: Advanced and Professional Traders

Delays on Execution -The Slippage Factor

The delay between the time you press the button on your PC and the time your
order is actually executed in the Forex Market is called the slippage. If we measure
this delay in real time we might say that this delay is between 0.1 seconds to 1.5
seconds. Slippage is generating price manipulation and that is why it is measured in
pips. One pip equals commonly 0.0001 of the value of a currency pair. The average
slippage in the market today is between 1-2 pips.

The Importance of Tiny Segments of Time

But why should a trader even care about such a tiny delay of less than 2 seconds?
Think about that. There are numerous arbitrage systems today that are trading
Forex in timeframes measured in million-seconds. These systems constitute the so
called ‘Million-Second Forex Market’.

One (1) second for a scalping system equals 1 month for a regular trader.
Furthermore if you trade the news (News-Trader) 1 second is the difference between
making a huge profit and suffering a huge loss. News-Trading is one of the six
trading styles presented in Chapter-6.

“Time is the most disputed issue in the men’s history”

■ Find full reviews and multiple comparisons regarding Scalping Forex Trading
Systems at ForexAutomatic.com: » Forex Robots and other Automated Systems
2. Two Categories of Forex Brokers -The
Need for Reliable and Regulated Partners

In order to trade Forex you need also a broker. Forex Brokers operate as
intermediaries between a trader and the aggregate Forex Market (The ECN network
mentioned before). Basically, there are two main categories of Brokers based on
their execution model, the Dealing Desk and the No-Dealing Desk Brokers.

Two (2) General Categories of Forex Brokers

(a) Dealing Desk Brokers (DD) or Agents or Market Makers

These brokers operate as a Dealing-Desk, meaning that they are making their own
market within the Forex market. In simple words, Market Makers sum all the buying
and selling orders of their clients and execute trades instantly on both sides. Actually
they accept all orders from opposite sides and earn money by staying in the middle,
without risk. Sometimes Market Makers are trading against their clients just to fill all
their orders.

Professional traders don’t like the fact of trading against their brokers and that is
why they are constantly avoiding Dealing Desk Brokers. Dealing Desk Brokers or
Market Makers are not considered as pure Forex Brokers

Dealing Desk Brokers offer usually a wide asset index including Forex, Stocks,
Indices, Commodities and Energy trading. In general, Dealing-Desk Brokers are
considered a good choice only for beginners and semi-advanced traders. This
perception exists as Dealing-Desk Brokers offer currency pairs in wide spreads.
EURUSD for example can be found usually at 2 pips minimum. Moreover Dealing-
Desk Brokers provide trading with slippage and re-quotes. The only important
advantage of trading with a Dealing Desk Broker is the Forex Bonus offered. Dealing-
Desk Brokers offer very high welcome bonuses up to 100% (find Forex Bonus
Promotions later in this eBook).

■ Tip: If you want to trade with a Market Maker, choose a broker offering
withdrawable bonus. Trade your bonus as many times required and then withdraw
your funds and your bonus. It is the best chance you have to win.

(b) No-Dealing Desk Brokers (NDD) -ECN or STP Forex Brokers

In this category we find brokers that are transferring their client orders directly to
the Forex Market, meaning transferring orders directly to the Electronic Network of
Banks (ECN). The great advantage of trading with an ECN/STP broker is the low
transactional cost and the very fast order execution. Transaction cost in Forex
Trading is deriving mainly from spreads And from trading commissions charged on
volume. Cost may be also the outcome of slippage. ECN/STP brokers offer by rule
the lowest slippage in the market.

The ECN/STP Forex brokers are the only choice of professional and advanced Forex
traders and the only choice for all those wishing to trade Forex via automated-
trading systems (explained in Chapter-7).

Note: Not all ECN/STP brokers offer good trading terms to their clients. There are
good, medium and bad performers as in every other industry.

Here are two examples of an ECN/STP Broker offering EURUSD:

i) EURUSD spread at 1.4 pips without any trading commissions

ii) EURUSD spread at 0.4 pips plus $3.5 commission per $100,000 volume

The Essence of Trading with Regulated Forex Companies

Reliability is priority number one when your industry is the Online Financials.
Everyone who wants to trade the world’s currencies needs a reliable Forex Broker.
There are hundreds of Forex Brokers available in the market, but it is extremely
important to trade only with those that are high regulated and reliable. Regulation
means that a company is supervised and controlled by external independent bodies.
Regulation works as a great incentive for any broker to behave ethically and respect
his client’s interests. Another factor that adds reliability to a Forex Company is the
existence of Segregated Client Bank Accounts. That means that when you make a
deposit your funds are safely deposited in an external bank. The country where a
Forex Broker is situated also matters, avoid companies situated in offshore countries.
Offshore countries are providing weak legislative frameworks regarding corporations,
and that is not good for any online trader.

Here is a list with some High-Regulated Forex Brokers offering also segregated Bank
Accounts to their Clients:
REGULATED FOREX BROKERS LIST (NO-US CLIENTS LIST)

Here is a list of regulated Forex Brokers offering funds safety via segregated client
bank accounts.

Table: Compare ECN/STP Forex Brokers

ECN/STP BROKER FEATURES FUNDING ACCOUNTS

□ $200 minimum
■ MT4/MT5 & account Very tight spreads and
cTrader trade commissions. Fund
■ A wide Forex FUND METHODS: your account via Skrill,
» IC MARKETS ACCOUNTS
asset index, and  Credit Cards Paypal, and Bitcoin. Free
Crypto assets  Bank Wire VPS for auto-traders
REGULATION:
■ Spread as low as  Skrill
□ ASIC Australia
0.1 pip plus $7.0  WebMoney ► Visit IC Markets
(No. 335692)
round commissions  Paypal
CORPORATE INFO:
■ PAMM Accounts  Neteller Review Broker:
 IC Markets
■ FIX/API Trading  Qiwi ► Review IC Markets
foundation in 2009
■ Free VPS  FasaPay
(domiciled in
■ Low deposit  Bitcoin
Australia)
requirements for
 Segregation via two Tier-
true ECN trading
1 Australian Banks

COMPENSATION:
-NO

□ $5 minimum
■ MT4/MT5 account A wide asset index and a
■ Wide Asset Index great variety of platforms
» XM ACCOUNTS
■ CFDs on Futures Bonuses: only for and other trade options.
■ Multilingual non-Europeans
REGULATION:
support ► Visit XM
□ CySEC, ASIC, FCA UK
■ Low deposit FUND METHODS:
CORPORATE INFO:
requirements for  Credit Cards Review Broker:
 XM was founded in
true ECN  Bank Wire ► Review XM
2009 (offices in Cyprus)
 Skrill
 Segregation via Top-tier
COMPENSATION:  Neteller
Banks
-Yes, via ICF Cyprus
 □ $100 minimum
■ MT4 account Specialized in Forex
■ Wide Forex Asset Trading (30+ pairs):
Index FUND METHODS:
» FXCC ACCOUNTS
■ FIX/API Trading  Credit Cards ► Visit FXCC
■ NY4 Equinix  Bank Wire
REGULATION:
server for  Skrill Review Broker:
□ FCA UK (549790)
automated trading  WebMoney ► Review FXCC
CySEC (121/10)
 Neteller
CORPORATE INFO:
COMPENSATION:
 FXCC foundation
-Yes, via ICF Cyprus
in 2010 (domiciled in
Cyprus)
 Audited by Deloitte

□ $10 minimum
■ MT4/MT5 account A wide range of trading
■ Wide Asset Index accounts, including ECN
■ 50 Forex pairs FUND METHODS: and ECN Pro Trading
» FXTM ACCOUNTS
plus many CFD  Credit Cards account
 Bank Wire
REGULATION:
assets
 Skrill ► Visit FXTM
□ CySEC (No 185/12) ■ FXTM Loyalty
 Western Union
FCA UK (License 777911) Program
 Neteller Review Broker:
CORPORATE INFO:
 Bitcoin (via ► Review FXTM
 FXTM foundation COMPENSATION:
Skrill)
in 2011 (domiciled in -Yes, via ICF Cyprus
 DotPay
Cyprus)
 Yandex

□ $5 minimum
■ MT4/MT5 account Offering 90 Forex Pairs
■ 90+ Forex pairs plus tens of Crypto pairs
■ 39 Cryptocurrency FUND METHODS: and a 100% welcome
» JUSTFOREX ACCOUNTS
pairs  Credit Cards bonus.
■ Trading Contests  Bank Wire
REGULATION:
■ 100%  Neteller ► Visit JustForex
□ IFSC (60/241/TS/17)
welcome bonus  WebMoney
CORPORATE INFO:
 PerfectMoney Review Broker:
 JustForex foundation
COMPENSATION:  FasaPay ► Review JustForex
in 2012 (domiciled in -NO  QIWI
Belize)  Bitcoin and
Bitcoin Cash

■ Find Forex Brokers Ratings at FxPros.net

Forming the Profile of the Perfect Forex Broker -For the
Average Trader

Here are some characteristics of the Ideal Forex Broker:

(i) Offering maximum safety of trading funds (high regulation and segregated client
bank accounts)

(ii) Offering minimal transaction cost (low spread, low commissions, no re-quotes)

(iii) Offering a wide asset index containing more than 60 currency pairs (majors,
minors and exotic pairs as mentioned before)

(iv) Offering fast order execution with minimal delays and no price manipulation

(v) Offering a good variety of trading platforms allowing mobile trading, automated
trading and scalping

(vi) Providing a variety of different deposit / withdrawal methods by not charging

commission on withdrawals or on inactive accounts

(vii) Providing fast and reliable customer service (emai, live chat and phone support)

Rating Brokers Formula by TradingCenter.org -The New and

Revolutionary Way of Rating Financial Services

Based on recent research, most of the user ratings found in the Internet today are
fake. This is happening as Online Companies pay outsiders to rate them favorably in
user-rating sites. In this uncomfortable environment the Rating Formula Series was
designed to provide a completely objective framework of rating financial services.

The Rating Formula Series includes all the major factors forming the ideal Broker.
This innovative rating formula is designed by TradingCenter.org. Here are the four
(4) generic rating categories forming the maximum rating value of 100%.
 FORMULA v.4.0 TOTAL RATING
WEIGHT (%)
(The structure of Rating Formula v4.0)
Factor-1: Safety of Funds 26.0% Rating +
Factor-2: Trading Cost 28.0% Rating +
Factor-3: Available Trading Options 26.0% Rating +
Factor-4: Technology 20.0% Rating =
100% max

→ Learn more about the Rating Formulas

These are the latest versions of the Rating Formula series:

► Rating Formula v5.0 –Forex Brokers, at TradingCenter.org

► Rating Formula v4.0 –Forex Brokers, at TradingCenter.org

 3. Why so many People Trade in the
Forex Market? –The Profit Potential

Two factors are forming the great Profit Potential of Forex Trading, liquidity and
trading leverage. Here is a short analysis of these two trading factors.

2.1 Forex Market Huge Liquidity and Low Cost of Transactions

As it was mentioned before the Foreign Exchange Market is really huge with daily
turnovers of more than 5 trillion US dollars. That means that there are tens of
thousands of currency buyers and currency sellers at any given second. That
enormous volume activity pushes the distance between buyers and sellers (called the
spread) in minimal ranges. The average spread on EURUSD for example is less than
2 pips. That means that if the first buyer is at 1.3800 then the first seller is at
1.3802. This distance in the example given is just 0.002, or else 2 pips spread.

Why is this fact so important? This is important because you can open and close a
trading position with an extremely low transaction cost. (i)

2.2 Multiplying Funds via the Use of Leverage

Forex trading provides the unique advantage of huge trading leverage. What does
trading leverage means? Trading leverage means that you can trade more funds that
you really hold. But what makes that advantage astonishing is the number of times
you may leverage your funds.

Most Forex Brokers today offer leverage up to 500:1. Therefore, if you open an
account with $1,000 you may trade theoretically $500,000. (ii)

By combining minimal transaction cost and high trading leverage {(i) and (ii)} it is
obvious what makes Forex Trading so lucrative and popular in a global scale.

Example:

If you open a position worth $500,000 and you gain 1.0% then your earnings are
calculated as:
■ Earnings Computation = $500,000 X 1.0% - Hypothetical Cost of Transaction =
$5,000 - $300 = $4.700
■ Your Initial investment was $1,000, so you gained 370% on your investment with
just 1.0% currency movement

Be aware that this procedure incurs high risks too, as you may win or lose money,
especially if you are not familiar with this process. This example is given to highlight
the profit potential and why Forex Trading attracts so many people worldwide.
2.3 The Leverage Formula (Semi-Advanced Traders)

The rate of capital leverage defines in a high extend which trade will prove profitable
and which not.

When you constantly use high trading leverage you are very vulnerable to market
volatility while you are forced to place your stop-loss orders really close.

I created this simple equation to highlight how the trading leverage can be optimized
in any trade. The following leverage formula aims to provide a simple framework for
understanding the attractiveness of each individual trade and therefore choose
respectively the ideal leverage ratio.

Here is the formula (it is briefly explained below):

◘ Leverage Formula= [ (P/L) * (1/Spread) * (R/2) ] %

Where:

(P/L) = Profit to Loss Ratio (Profit derives from Take Profit and Loss from Stop Loss
Orders)

(Spread) = The difference between Ask and Bid Price (First Seller and First Buyer)

(R) = Risk Tolerance (values 1-100, equals your overall risk acceptance as a
percentage %)
 4. Forex Welcome Bonus -Another Great
Advantage of Forex Trading

High Deposit Bonus and No-Deposit Bonus

Forex Welcome Bonus –The Difference between a Credit Bonus and a

Withdrawable Bonus

Forex Brokers in order to attract new clients offer promotions that are called Forex
Bonuses. A common welcome bonus is 30% but it can be up to 100%.

What means 100% welcome bonus on deposit?

It means that if you are a new client and you deposit 1,000USD then the broker will
add you another 1,000USD in your account as an extra trading capital.

There are two types of Forex welcome bonus:

i) Withdrawable Bonus (usually 30% on new deposit)

ii) Credit Bonus (usually 50-100% on new deposit)

You may withdraw a Withdrawable Bonus by trading it several times according to the
Terms & Conditions of any promotion.

From the other hand, you can not withdraw a credit bonus but you may still
withdraw the gaining generated by a credit bonus.

Risk-Free Trading via a No-Deposit Bonus Account

Additionally, Forex Brokers in order to make traders more familiar with their
platforms offer also the so called No-Deposit Forex Bonuses. That means that you
get a bonus amount between 20-100USD just by confirming your email or phone and
without depositing any funds at all. That is an excellent risk-free way to get in touch
with Forex Trading for the first time.

Where is the Catch?

Be aware that you may withdraw a No-Deposit Forex Bonus but you must first trade
it at least 20-25 times. Anyway that is a great way to start trading without any risk.
NO-DEPOSIT BONUS & BROKER

(1) AvaTrade offers $50 No-Deposit Bonus

► Review Broker and Information | » Claim $50 Free Bonus

(2) InstaForex No Deposit Bonus

► Review Broker and Information | » InstaForex Free Bonus

(3) XM offers $30

► Review Broker and Information | » XeMarkets Free Bonus
 5. Forex Trading Rebates –Promotions
designed for Advanced Traders
What is a Forex Trading Rebate?

A Forex trading rebate means making money from your trading volumes. For
example if you have joined a rebate plan offering $5 per lot (lot = $100,000), and
during a certain month you have traded 20 lots, you earned $100. A trading rebate
has nothing to do with your overall trading performance, only volumes matter.

Where is the Catch?

There is no catch here. Simply Forex Brokers provide rebates to Professional

Investment Consultants as an incentive to introduce them new clients. A part of this
rebate is given back from those professionals to real traders. This circle of money is
called a Forex Trading Rebate.

Automatic Forex Rebates –The best way to Trade Forex

An automatic Forex Rebate means a rebate that is earned directly to your trading
account without any interventions. You need again a Professional Investment
Consultant as the intermediary.

Here are three Trading Rebate Plans from advanced ECN Brokers and information
how you can join them. All three rebates are fully automated and 100% free of any
charge (sign or other fee). Furthermore, all your other trading terms on these
brokers will remain exactly the same.

US MINIMUM FUND
ECN BROKER REBATE PLAN INFO
CLIENTS DEPOSIT METHODS
» Learn more
Bank Wire,
here
Credit
XM ■ $7.0 / lot Find more
Cards,
Information
No $50 MoneyBook
STP Forex ■ Automatic
ers, and
Broker Rebate ► Manual
more
Rebate Link
methods

■ Dukascopy DUKASCOPY
Dukascopy 30% Rebate BANK
Bank on all » Learn more
Bank Wire,
commissions No $5,000 here
Credit Cards
ECN Swiss charged
Broker During the
■ Automatic registration
 US MINIMUM FUND
ECN BROKER REBATE PLAN INFO
CLIENTS DEPOSIT METHODS
Rebate process at the
step KNOW US
FROM indicate
8410 as your
Introducing Agent
► Register at
Dukascopy Bank
-Indicating
‘Known us from
IB’ 8410

DUKASCOPY
EUROPE
» Learn more
■ Dukascopy here
Dukascopy
10% Rebate During the
Europe
on all registration
commissions Bank Wire, process at the
ECN Branch No $100
charged Credit Cards step KNOW US
of
FROM indicate IB-
Dukascopy
■ Automatic 8411 as your
Bank
Rebate Introducing Agent

► Automatic
Rebate link

Other Web-Sites with Forex Promotions

You may also find promotions in the Facebook page » Visit Facebook/OnlineFx
6. Six Different Forex Trading Styles –
Select your Own Style

These are the six main categories of Forex Traders (Trading Styles):

1. Curry Traders (Long Traders)

WHAT THEY DO?

They open positions lasting from 1 month to 9 months and aim to exploit
inefficiencies’ in the level of interest rates between two economies. They usually like
to buy currencies offering huge interest rates (10-15%) and at the same time sell
currencies offering lower interest rates. This difference can be transformed into huge
profits for those who know how and when to trade it.

REQUIREMENTS:

When you open a position in the Forex Market that remains open more than 1 day
you pay or get paid what is called as the Swap value. Swap charges are calculated
based on the level of interest rates between two currencies. These interest rate
differences can sometimes work for you and some other times against you.
Therefore if you trade long you need a Forex Broker offering the best terms as
concerns the swap charges. Additionally you need a broker offering a wide asset
index. An asset index is the portfolio of currency choices that you will be able to
trade. This asset index varies depending on your broker. The more currency choices
you have the easier it will be for you to exploit interest rate inefficiencies. When you
trade long, you don’t care about the spreads, the technology, delays etc.

It is essential that a long-trader must be able to understand fundamental analysis

and the correlation between inflation, interest rates and the current Forex currency
rates. I would need another eBook just to explain this correlation furthermore.

2. Swing Traders

WHAT THEY DO?

They open and close positions lasting from 1 day to 15 days. They aim to exploit
mid-term trends because 1 week is considered mid-term in Forex Trading. Swing
traders are some of the most successful Forex Traders there is. They avoid trading
intraday as they don’t like the so called ‘market noise’ of intraday trading.

REQUIREMENTS:
Swing trading is one of the best ways to trade Forex. In order to evolve as a Swing
Trader you need a little bit about everything. You need narrow spreads, reasonable
swap charges, relative good technology and also a broker offering a wide asset
index. Swing traders are using both technical and fundamental analysis.

3. Intraday / Short Traders

WHAT THEY DO?

They open and close positions in the same day. This type of Forex traders is focusing
solely on technical analysis. Short-traders use either their own system to trade or
they pay a monthly subscription to an external signaling service. The alerts of
signaling services are delivered via SMS, email, Facebook, Member’s Area etc.
Information about Live Forex Signaling Systems is found in Chapter-7.

REQUIREMENTS:

Basically two things really matter. First of all you need the perfect technology with
minimal delays. Secondly you need a Forex Broker offering very tight spreads and
small trading commissions. Short-Trading is all about paying minimal cost. If you
want to evolve as an Intraday Trader, think about joining a trading rebate plan too.
A trading rebate can minimize your trading cost. You may find three ECN rebate
plans at the Chapter-5 of this eBook.

4. News Traders

WHAT THEY DO?

They are trading important news and events, perfect information and top technology
are considered absolutely a ‘must’ for News-Traders.

REQUIREMENTS:

The same requirements needed as the Intraday Traders (News-Traders are Intraday
Traders too).

5. Forex Scalpers

WHAT THEY DO?

As it was mentioned in Chapter-1, scalpers open and close positions in tiny

timeframes lasting less than one minute. They aim to ‘scalp’ the market and earn 2-
10 pips.

REQUIREMENTS:
Scalpers need perfect technology and minimal transaction cost -But all that is needed
in a much higher extend than the case of the usual intraday trader. Usually scalpers
are not trading Forex manually but instead they trade via the use of an automated
system (copier or Robot). You can learn about automated scalping systems in the
Chapter-7 of this eBook.

Keep in mind that usually scalpers trade exclusively three currency pairs. The reason
is that these 3 pairs enjoy high liquidity and therefore minimal transaction cost:
i) Euro against the US Dollar (EUR/USD)
ii) British Pound against the US Dollar (GBPUSD)
iii) US Dollar against the Japanese Yen (USD/JPY)

6. Copy Traders / Social Traders

WHAT THEY DO?

Following (copying) the trading activity of other traders. This procedure is also called
as Social Trading (nothing to do with common Social Media).

REQUIREMENTS:

Social trading is booming nowadays. In order to make money from this type of
trading you need a social trading platform, for example ZuluTrade and MirrorTrader.
Social trading platforms are again free to download and to use.

► The ZuluTrade Platform

Furthermore you need good technology too, but most importantly you need an
excellent instinct to select the perfect signal provider. All social trading platforms
offer the chance of monitoring the past performance of any signal provider. You can
also compare providers based on your criteria.
 7. Live Forex Trading Signals & Forex
Robots

(i) Live Forex Trading Signals

What is a Live Forex Trading Signal?

A Live Forex trading signal is an alert for buying or selling a Forex Currency Pair. This
alert can be delivered either manually or automatically. Manual alerts are delivered
via classic methods as email, Facebook, SMS, twitter, member’s area etc. Automatic
alerts are delivered via a signal copier. Usually automated trading signals are based
on MetaTrader4.

Which are the Criteria When Choosing a Forex Signaling Service?

A Forex signaling service is provided usually for a monthly subscription between 50-
150 USD. First of all you must focus on a service that is able to cover all your needs
(manual or automated trading, delivery method, frequency of signals etc).
Furthermore, it is important to focus also on the past performance of each service.
Sometimes, these services offer also a trial period of a few days.

Here is a list with popular Forex Signal Providers:

SIGNAL
STYLE TRADING COST INFORMATION
PROVIDER
■ Automated
Trading
■ Manual ■ Forex
Trading Currencies
SIGNALS & ■ News ■ Gold ► Review System
■ 77 USD
MENTORING Trading Trading
per month
CLUB ■ Social ■ Stocks & » Visit Web
Trading Indices
■ Forums Trading
with Reports
■ Learning
 SIGNAL
STYLE TRADING COST INFORMATION
PROVIDER
■ Forex
■ Desktop Currencies
Trading ■ Futures ► Review System
■ 97 USD
TRADE MINER Software Trading
for one-time
■ Manual ■ Stocks » Visit Web
Trading Trading
■ Metals
■ Manual ■ Forex ■ 37 USD
FX TRENDY ► Review System
Trading Currencies every 3-
TRADING
■ eMail Alerts months
SYSTEM » Visit Web

■ Find Signal Providers and Trading Systems Reviews at FxPros.net

(ii) Forex Robots (Expert Advisors)
What is a Forex Robot?

A Forex Robot (or else an Expert Advisor) is a piece of software that plugs in a
Trading Platform in order to trade Forex automatically. These systems are usually
running on Metatrader4. If you want to trade using a Forex Robot you need top
technology and probably a VPS hosting service (explained later).

The Criteria When Choosing a Forex Robot

A Forex Robot is designed to perform a very difficult task so there are many
parameters defining your best choice. Here are some important factors that must be
taken into consideration:

(1) Past Performance of the Robot

(2) Who is the Developer?
(3) What is the average frequency of trading?
(4) Is there any Money Management Mechanism (spread and slippage control etc.)
(5) What is the Price of this system? Can I use it in more than one Live Account?
(6) Does my broker allow the use of a Forex Robot? (usually ECN /STP brokers allow
trading via the use of Forex robots)
(7) Is my broker suitable for automated trading? (spreads, execution speed etc)
(8) Will I need a VPS hosting service? (probably the answer is yes)
Furthermore:
(9) Test always any system in a demo account before using it in a real trading
account.
(10) Never mix the use of a Forex robot with other trading activity, it may confuse
the robot’s Money-Management System
POPULAR FOREX ROBOTS (EXPERT ADVISORS)

Here is a list with popular Forex Robots (Expert Advisors):

ONE-TIME
FOREX ROBOT STYLE PLATFORM INFO
COST
■ Scalping: ■ 299 USD
EUR/USD, for one tine
GBP/USD, ■ 3 Forex ► Review System
WALLSTREET ■ MetaTrader4
USD/JPY, Licenses
ROBOT ■ MetaTrader5
USD/CHF, ■ Free the » Visit Web
AUD/USD, Omega
NZD/USD Indicator
■ 190 USD
■ Scalping
for one time ► Review System
VOLATILITY only
■ MetaTrader4 ■ 1 Forex
ROBOT EUR/USD,
Account » Visit Web
GBP/USD
License

FX ■ Scalping
■ MetaTrader4 ■ 67 USD ► Review System
MEGADROID only
■ ZuluTrade for one time
EURUSD
» Visit Web

■ Find Expert Advisors and Trading Systems Reviews at ForexAutomatic.com

What is a VPS Hosting Service?

In order a Forex Robot to trade effectively it requires to remain active 24 hours per
day. This problem can be solved via the use of a VPS. A VPS is an external hosting
service that allows the Robot to trade 24 hours per day without having your PC,
Laptop or Tablet turned on.
A VPS usually costs about $40 per month but certain brokers offer that service for
free.
CREATING AUTOMATED TRADING SOFTWARE WITHOUT ANY
PROGRAMMING SKILLS

For those who are lacking programming skills, there is an advanced online
application that can provide a user-friendly interface for transforming ideas
into fully automated trading strategies. The EA Builder can transform trading
ideas into indicators or Expert Advisors (EAs). The system is 100% web-
based and it is compatible with MT4, MT5, and TradeStation platforms.

» the EA Builder Web Application

EA Builder Basic Features (for MT4, MT5, or TradeStation)

 Completely free for creating indicators
 100% Web-based App
 Full set of built-in functions (including even)
 Full Money-Management system modules
 The outcome is a single compiled MQL4/MQL5 file, ready to trade
 15 video tutorials
 Can be used on any PC, MAC, or Linux-based computer

■ More about how to build Custom Automated Trading Software at the

website for auto-trading ForexAutomatic.com:
» https://ForexAutomatic.com/index.php/automated-trading/expert-
advisors/expert-advisors-builder

The Advantages of this Method

1. Free for creating indicators (which can be later transformed into EAs)
2. No need for Programming Skills (graphical environment)
3. Can be used for trading all asset classes in any timeframe
4. Includes tens of functions and technical analysis indicators
5. Action alert methods (e-mail, audio alerts, on-screen)
6. Spread and slippage control (important for scalping strategies)
7. The final code can be used in unlimited accounts (no limits)
 8. Forex Trading Resources

(i) Major Currency Symbols

CURRENCY CODE SYMBOL FOREX SLANG

US DOLLAR USD $ Dollar Buck
EUROPEAN EURO EUR € Fiber
SWISS FRANC CHF CHF Swissy
BRITISH STERLING GBP £ Cable
JAPANESE YEN JPY ¥ Yen
CANADIAN DOLLAR $ Loonie
AUSTRALIAN DOLLAR AUD $ Aussie
NEW ZEELAND DOLLAR NZD $ Kiwi

(ii) Six (6) Main Types of Trading Orders

These are the six (6) important order types when trading Forex:
(1)Market Order
Buying or selling a currency pair at the current market price.
(2)Limit Order
Buying or selling a currency pair at a pre-determined (limited) price.
(3)Stop-Loss Order
A stop-loss is the most important order type. A stop-loss sets a limit to the maximum
amount you are willing to risk in any trade.
(4)Target Profit Order
This common order sets your targeted price level. It pre-determines your profit
potential.
(5)Limit Entry & Stop-Entry
Buy or sell a currency pair below or above the market at a pre-specified level.
(6)OCO Order
OCO means One-Cancels-Other. Based on this order if a trade is executed then
another trade is automatically cancelled.
(7)GTC Order
GTC means Good-Till-Cancelled. A GTC order remains in the market active until it is
either filled or cancelled.
(iii) Currency Pairs and Changes in Historic Volumes

Source: Aite Group ‘Global FX Market Update 2013: Increased Market Transparency, More Competition’
(iv) Forex Calendar / Heat Map

This Forex Heat Map Table is based on statistics between the years (2000-2013).
The full research was published on www.TradingCenter.org.

Source: ForexAutomatic.com / TradingCenter.org

9. Forex Trading Glossary
A
ADX (Average Directional Index)

ADX is a technical analysis indicator measuring the strength of a trend.

Appreciation of a Currency

A currency is appreciated when it earns value against another currency. This may be
due to fiscal or monetary developments or simply due to market psychology. A
monetary policy aiming domestic currency appreciation is called a “Hard-Currency
Policy”. The opposite situation is called currency depreciation.

Arbitrage

Arbitrage is a short-term trading type that aims to take advantage of market

inefficiencies. That means buying an asset in a particular market and at the same
time selling the same asset in another market.

Ask and Bid

Ask means the price that you may buy a financial traded asset and bid means the
price that you may sell it.

■ Example: Buying at 80.00 (bid) and Selling at 80.02 (ask)

Aussie

Aussie is a slang name that is used for the Australian dollar (AUD).

B
Bank of Canada (BOC)

Bank of Canada is the Central Bank of Canada responsible for the Canadian
monetary policy.

►Visit the Bank of Canada

Bank of England (BOE)

Bank of England is the Central Bank of England responsible for the UK monetary
policy.

►Visit the Bank of England

Bank of Japan (BOJ)

Bank of Japan is the Central Bank of Japan responsible for the Japanese monetary
policy.

►Visit the Bank of Japan

Balance of Trade

Balance of Trade measures the difference between the value of imports and exports
of a country for a particular time frame (usually monthly or annually). When the
outcome is negative Trade Deficit is created and when it is positive Trade Surplus is
achieved.

Bank Rate

A Bank rate is the interest rate charged by the central bank of a particular country
when it lends capital to the domestic commercial bank institutions. It is used by
central banks as a tool to control money supply in the economy.

Bar Chart

A Bar Chart is a very popular chart type where prices are indicated as bars and lines.

Base Currency

In a currency pair, the base currency corresponds to the first quote.

Bear Market or Bearish Market

Bear or Bearish market is a market that is expected to trend downwards.

Beige Book

The Beige Book is a collection of US FED (Federal Reserve) reports containing

important reviews regarding the US economy.

Breakout

Breakout is technical analysis term describing the breakdown of a trend below

support levels or above resistance price level. When a breakout occurs usually
traders react nervously and the result is high volatility and high liquidity.

Broker

A broker is the market participant who operates as the middleman between traders
and commercial institutions. A broker may execute buy and sell orders on behalf of
his clients charging a predefined commission.

» Compare Forex Brokers using the Rating Formula v4.0

Brokerage

Brokerage is the act of a buying and selling financial assets on behalf of third parties.

Bull Market or Bullish Market

Bull Market or Bullish Market is a market that is expected to trend upwards. The
opposite is a bearish market.

Bundesbank

Bundesbank is the Central Bank of Germany. As Germany is a member of eurozone,

Bundesbank is coordinated with the policies of European Central Bank (ECB).

► Visit the German Bundesbank

C
Cable

Cable is a Forex slang used for the British Pound against US Dollar (GBP/USD
currency pair).

Candlestick Chart

A Candlestick chart is a technical analysis chart where prices are indicated using
‘Japanese Candles’.

Carry Trade

Carry trade means keeping a trading position with a positive overnight interest
return. Individuals who are practicing curry trading are called curry traders.

Cash Flow

It is the difference between cash inflow and cash outflow of a company during a
particular period from one month to one year. Cash flows are indicating the ability of
a company to generate money and are highly valued by all investors.

Categories of Forex Pairs

There are three Main Categories of Forex Currencies:

iv) Forex Majors (the most popular Forex pairs)
v) Forex Minors (expensive to trade)
vi) Forex Exotics (very expensive to trade)

The Forex majors include: EUR/USD, GBP/USD, USD/JPY, USD/CHF, USD/CAD,

AUD/USD and NZD/USD.
CCI (Commodity Channel Index)

CCI is a cyclical technical indicator identifying when a market is overbought /

oversold.

Central Banks

Central Banks are authorized institutions by governments to regulate and to control

the domestic banking sector. In addition central banks are implementing the national
monetary policy.

CFD (Contract for Difference)

A contract for difference is a specialized trading instrument that provides speculation

on stocks, indices, commodities and other financial assets.

Chain Store Sales Indicator

It is an economic indicator for measuring the dynamics of retail sales.

Clearing Process

Clearing is the process of trade settlement.

Collateral

The term collateral describes the amount that is deposited by a trader as insurance
in order to trade.

Commission

Trading Commissions are charged by brokers in order to offer their brokerage

services. Some brokers do not charge commissions as they gain profits from the
spread between bid and ask.

Confirmation

Confirmation in technical analysis is the process when some indicators are used to
confirm the results of another indicator.

Correction

Correction means a pullback of the price of an asset after a strong movement has
occurred. A normal correction should count no more than 10% of the master
movement.

Counter Currency

In Forex trading the counter currency is the second currency of a Forex pair. For
example in EURUSD, the counter currency is USD.
CPI

CPI stands for consumer price index. CPI is the statistical measure of inflation and it
is based upon the changes of prices of a specified goods and services.

Currency Option

A Currency Option is an option contract that has as its underlying asset a Forex
currency pair (for example GBPUSD). In general a currency option provides its holder
with the opportunity but not the obligation to buy or to sell one currency for another
at an agreed quote and within an agreed time period.

→ Valuating a Currency Option:

As in the case of every other Option Contract the valuation relies on:

(i) Intrinsic Value (The difference of the Current Exchange Rate and the Pre-Agreed
Exchange Rate)

(ii) Time to Maturity (More time adds value)

(iii) Volatility (The greater the volatility of the underlying asset the greater the value
of the option contract)

Currency Pair

A currency pair is a quote of two currencies. In any currency pair the purchased
currency (First) is called the Base Currency (EUR) and the sold currency (Second) is
called the Quote Currency.

Currency Rate

A currency rate is the price rate of a particular currency against another particular
currency.

Currency Symbol

A Currency Symbol (i.e. USD, NZD) is indicating a particular currency.

D
Day Order

A Day Order is an order to buy or to sell a financial traded asset that will stay active
until the end of the trading day.

Divergence

Divergence in technical analysis means that the charts produced by indicators differ
from price charts.
Double Top / Bottom Formation

This is a technical analysis pattern which occurs when the price of an asset reaches
twice a certain price level and then reverses its trend. There is also the Triple Top /
Bottom Formation.

E
Economic Indicator

An Economic indicator is a fundamental indicator describing important trends in an

economy (GDP change, unemployment, inflation etc).

ECN Broker

An ECN broker is a Forex brokerage company that is able to provide its clients with
direct access to the Electronic Network of Banks (ECN). ECN brokers usually offer the
best terms to trade Foreign Exchange (tight spreads and no price manipulation). In
addition most ECN brokers allow Forex scalping and hedging. ECN brokers don't
trade against their clients as market makers and in general they are considered as
the best choice to trade Forex.

Efficient Market Theory

It is a market theory which assumes that all important economic and other factors
are already incorporated in the current prices.

European Central Bank (ECB)

The European Central Bank is the financial institution authorized by the European
Union to regulate Eurozone and implement Europe’s monetary policy.

► Visit the European Central Bank

Exchange Rate

In Forex an exchange rate is the rate that a currency can be bought or sold for
another.

Expert Advisor

An Expert Advisor (EA) is a piece of software (script) that plugs into a trading
platform and it is designed to open and close positions automatically without human
control.

 FAP Turbo
 Forex Bullet Proof
 ForexGrowth Robot
F
Fed

FED or Federal Reserve Bank is the central bank of the United States of America.

► The FED’s web-site

Fibonacci Retracement

The Fibonacci Retracement is a popular technical analysis tool for trading Forex,
Stocks, Indices etc. The Fibonacci Retracement indicates the crucial levels for a trend
break or bounce. These levels are calculated as the 23.6%, 32.8%, 50.0% and
61.8% of the current trend range.

Flat Market

A Flat Market is a market without a particular direction. Flat markets are common
phenomenon at periods when trading activity is minimized (for example during July
or August).

The Fibonacci Levels: 23.6% | 32.8% | 50.0% | 61.8%

Forex
Forex means FOReign EXchange and it is a global market where the world’s
currencies are traded, one currency against another. Central Banks, Commercial
Banks, Large and Small Corporations, Institutional Investors, Individual Traders and
Common Tourists occasionally need to exchange one currency for another.

Free Float

Free Float in stocks trading is the number of free shares available to the investing
public as a percentage of the total shares capital outstanding.

Fundamental Analysis

Fundamental Analysis is the financial analysis which is based only on fundamental

news and events. Fundamental Analysis includes economic factors such is the
change of inflation, GDP, unemployment, interest rates etc.

G
G8

G8 is a group of the 8 most developed countries in the world, including the US,
Japan, United Kingdom, Germany, Russia, France, Italy and Canada.
Gap

A Gap is the price difference between the previous period's closing and the next
period's opening. Usually gaps are occurring after weekends (Friday's closing price
and Monday's opening price).

GDP

The Gross Domestic Product (GDP) is measuring the aggregate value of goods and
services produced by an economy during a certain time period. The Gross Domestic
Product is a very important economic figure.

GNP

The Gross National Product (GNP) is measuring the total gross domestic product
(GDP) plus income, gained from investments or work abroad.

Greenback

Greenback is the Forex slang for the US Dollar.

H
Hard-currency policy

A monetary policy imposed by Central Banks aiming the domestic currency

appreciation against other currencies. This policy is achieved usually via the increase
of the level of domestic interest rates.

Hedge Funds

Hedge Funds are investment funds that hedge their investment positions against
risk.

► Find Hedge Funds at Capitalinvestor.org

Hedging

Hedging is a method of diversifying risk when trading the world’s Financial Markets.
Practical it means opening and maintaining a certain market position in order to
offset the risk of another trading position. For example if you are long (buy shares)
on Apple’s stock you may short (sell) the whole Nasdaq Index. Professional traders
are always trying to hedge against their portfolio risk and avoid trading ‘naked’.

Home Sales Indicator

It is a macroeconomic indicator measuring the sales of real estate at the secondary

housing market.
Housing Starts and Permits

It is an index measuring the current number of houses under construction and the
current number of construction permits.

I
IFO

IFO is the German business optimism index measured by the German Institute of
Economic Research.

► Visit the German Institute of Economic Research

Industrial Production Index

It is an important macroeconomic index measuring the total output of industrial

production in a certain time period.

Interbank Rates

Interbank Rates are the currency rates imposed by large International Banks in order
to lend capital to other banks.

Intraday High

It is the highest price of trading activity in a particular day.

Intraday Low

It is the lowest price of trading activity in a particular day.

Intraday Trading

Intraday-Trading or Day-Trading means buying and selling a financial traded asset

(for example a currency pair) during the same day.

Inflation

Inflation is an economic index measuring changes in the level of prices of goods and
services. Inflation is often called as the ‘hidden tax’ as it diminishing the purchasing
power of consumers. In general, higher levels of inflation constitute ‘bad news’ for
the economy.

J
Japanese Economy Watchers Survey

It is a survey measuring the business climate in Japan.

Japanese Machine Tool Orders Indicator

It is an indicator measuring the total value of new orders placed with machine tool
manufacturers.

Jobless Claims

It is an important macroeconomic indicator measuring the number of registered

unemployed.

K
Kiwi

Kiwi is the Forex slang of the NZD (New Zealand Dollar).

Knock-Ins Strategy

It is an options trading strategy that requires the underlying asset to reach a certain
price level before a previously bought option becomes active.

L
Leading Indicators

By Leading Indicators we are referring to an index containing the most crucial

macroeconomic indicators.

Leverage

Leverage Rate describes the ratio between the owned capital and the total capital
invested. The total capital invested incorporates the owned capital plus the borrowed
capital.

□ Stocks Trading: Leverage usually 2:1

□ Forex Trading: Leverage usually 200:1

Liquidity / Liquid Market

A liquid market is a market that a lot of buyers and sellers are participating. That
high market activity is generating high trading volumes. Liquid markets offer the best
terms for short-trading (tight spreads, easy entry, easy exit).

Long

Go Long means buying a financial asset. The opposite of Go Long is to Go Short

(Selling).
Lot

Lot is the standard unit size of a transaction. As concerns Forex Trading there are
three lot sizes:

■ Micro Lot Size which equals $1,000

■ Mini Lot Size which equals $10,000

■ Standard Lot Size which equals $100,000

M
Margin and Margin Call

Margin is the minimum capital that an investor is obligated to keep in his trading
account as insurance in order to maintain a trading position. If a position worth
$10,000 and the margin level is 50% then the investor must maintain $5,000 cash
on his account. If this position is losing money then his broker may issue a ‘Margin
Call’ which means demand for more cash in order the position to remain active.

Momentum

Momentum is technical analysis term which means that the price of a financial asset
shows strength to move in a particular direction (uptrend or downtrend).

Moving Average (MA)

Moving Average is one of the most popular technical analysis indicators. The moving
average is calculated as the average price of a series of periods. The most common
moving averages are calculated by the average price of 50 and 200 periods. There
are a lot of different ways to calculate a Moving Average:

1- Simple Moving Average

2- Exponential Moving Average

3- Weighted Moving Average

4- Cumulative Moving Average

N
Net Factory Orders

Net Factory Orders are measuring the net change of industrial activity (industrial
orders).
Nonfarm Payrolls

The Nonfarm Payrolls measure the aggregate number of employees on the payroll in
an economy except the agricultural sector.

O
Old Lady

Old Lady is a Forex slang which corresponds to the Bank of England (BOE).

Open Order

An open order is an order that will stay active until it is filled or canceled

Open Position

An open position is an active trading position.

Oscillator

An Oscillator is a technical analysis tool used for price movement forecast.

Output Index

An output index is an index measuring the production volume output.

P
PAMM Account

PAMM means Percentage Allocation Management Module and it is an account type

offered by some brokers allowing Professional Asset Managers to manage other’s
trading funds. PAMM accounts offer reliability and security on behalf of traders as
Money Mangers can’t withdraw their funds.

► Compare PAMM Accounts at Forex Automatic

Personal Spending Indicator

The personal spending indicator measures the change of individual spending in an

economy. When individual spending is increased then the market expects higher
growth and higher inflation in the future.

Pip

A Pip is the minimum level that a price can change. In Forex Trading a pip is the last
digit of an exchange rate

■ if GBP/USD rate is 1.5001 then 1 pip equals 0.0001.

Pivot Point

A Pivot Point is an average price that is calculated based on the previous High, Low
and Close and it is considered as an important support / resistance level.

PPI (Producer Price Index)

PPI is the index of producer prices. When PPI increases it means ‘bad news’ for the
corresponding economy.

Premium

A premium measures the amount at which future prices will surpass the current spot
prices. The opposite of a premium is a discount.

Price Channel

A price channel is a range that sets the limits of price movement.

Q
Quotation

Quotation is the process of indicating the value of a currency in the units of another
currency.

Quote

Quote is a market price.

Quote Currency

In Forex Trading, the quote or counter currency is the second currency in a currency
pair. For example, in EURUSD, USD is the quote currency.

R
Retail Price Index (RPI)

It is a UK macroeconomic indicator measuring the change of retail prices.

Rollover

Rollover has many meaning in finance, when trading derivatives it means moving the
delivery date forwards.
RSI

RSI means Relative Strength Index and it is a very popular technical analysis
indicator that measures the strength of a price movement and indicates overbought
and oversold levels.

■ Overbought above RSI=70 | ■ Oversold below RSI=30

S
Scalping

Scalping is a Forex Trading technique that means opening and closing many
positions in tiny segments of time (maximum 1-2 minutes) and targeting returns of
5-20 pips. Those traders who scalp Forex are called Forex Scalpers.

Slippage

Slippage on execution of an order means opening or closing a trading position in

different price than expected. It is a delay on order execution that can highly disturb
short-term traders and especially scalpers.

Spot

Spot is a transaction that is carried out immediately but the payment is settled within
two days.

Spread

Spread is the difference between ask and bid of the price of an asset and it is
measured in Pips.

Square

It is a situation when the total profits materialized in a certain trading period are
equal to the total losses.

Sterling

Sterling corresponds to the British Pound (GBP).

STP Execution

STP means Straight-Through-Processing and it is a type of Forex Execution that

doesn’t involve manual intervention or order execution.

Support & Resistance

Resistance is a price level of important expected supply and support is a price level
of important expected demand.
Swap

SWAP charge is the overnight value for holding a trading position. In Forex trading,
the SWAP value may be negative or positive based on the level of interest rates of
the two currencies you buy and sell.

Swissy

Swissy is the Forex slang name for Swiss Franc (CHF).

T
Take-Profit Order

A Take Profit Order is a trading order that will close a certain trade when it will
reaches a particular price level.

Technical Analysis

Technical Analysis is a popular method of forecasting the future price direction of an

asset or a market based on historic price data and chart examination.

Thin Market

A thin Market is a market suffering from limited liquidity.

Tick

Tick is the minimum one time price change of a financial traded asset.

Time Cycles

Time Cycles are used to describe the repetition of price movements forming a
pattern in particular time frames.

Trader

A trader is an individual who is buying and selling financial assets in order to make a
profit.

Trading platform

A Trading platform is a software program that can be used for trading the financial
markets.

► Compare Trading Platforms at ForexAutomatic.com

Trailing-Order

A trailing order is an order that changes as the price changes. This could be a trailing
stop-loss or a trailing take-profit order.

Transaction Cost

Transaction cost is the incorporated trading cost when buying or selling a financial
asset.

Trend

A Trend is a strong market direction that may be either an Uptrend or a Downtrend.

U
Uncovered Transaction

An uncovered position is a position that isn’t yet filled (open position).

Unemployment Rate

The unemployment rate is a very important macro-economic figure which indicates

the percentage of unemployed population against the total number of labor-able
population in an economy.

Uptick

An uptick is called the new price quote if it higher than the previous price quote.

Uptrend

An uptrend is an ascending price trend which is usually found in bullish markets

V
Value Date

Value date is the date of settlement of a spot or a rward deal.

Value Spot

Value Spot means a settlement after two working days from today.

Volatility

Market Volatility is a statistical measure that calculates the number of price changes
in a market for a given period of time.

Volume
Volume measures the level of trading activity in a financial market.

VPS

VPS means Virtual Private Server and it is a method of hosting a software application
on an external server. VPS is commonly used for trading Forex via Expert Advisors
(Forex Robots). The advantage of a VPS hosting is that it allows trading 24/5 without
having your PC open.

W
Wash-Trade

Wash Trade means a trade with neutral results, no profit no loss.

Wholesale Prices Index

Wholesale Prices Index is a macroeconomic index measuring the rate of change in

the wholesale prices.

Y
Yard

Yard in Forex Trading is a slang that means 1 billion US Dollars.

Z
ZEW

ZEW is the Center of European economic research. It was found in 1990 and it is
located in Germany (Hamburg).

► Visit the ZEW

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© George Protonotarios 2014

Forex Trading Guide v.2.0 - Copyright © May 2014

COPYRIGHT INFORMATION

ALL RIGHTS RESERVED. No part of this eBook (including text, information,

tables, analysis, resources and images) may be copied, reproduced, mirrored
or sold.

DISCLAIMER AND LEGAL NOTICE

The information presented in this eBook represents the view of the author.
Every attempt has been made by the author to verify all information included
in this eBook, but there is no guarantee about the accuracy and the reliability
of any information presented in this eBook. In addition, this Forex Guide
includes affiliate links. This eBook is not intended for use as a source of
financial or investment advice.

RISK WARNING

There is considerable exposure to risk when trading Forex, Futures and

Options. Trading Forex and other leveraged products involves a significant
level of risk and is not suitable for all investors. Before undertaking any such
transactions you should ensure that you fully understand the risks involved
and seek independent advice if necessary. The possibility always exists that
you could sustain a substantial loss. Never trade with funds that you may
need in the future. Past performance is not necessarily indicative of future
results. Any opinions, suggestions, brokers, systems, services, software,
reviews, promotions, bonus, rebates, links and web-sites mentioned on this
eBook are provided as general market commentary, and do not constitute
investment advice in any way.

Forex Trading Guide v.2.0 - Copyright © May 2014

George Protonotarios -All rights reserved worldwide
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