INTRODUCTION TO
FOREX TRADING

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Forex is the biggest financial market in the world. It’s where currencies are bought and sold 24 hours a day, 5 days a week.

Price is moved by banks, institutions, businesses and traders like us, and every move happens for a reason.

Before you can trade it properly, you need to understand how the market works, what moves price, who is moving it, and how a trade is actually placed.

With these foundations in place, everything you learn later in the course will make a lot more sense, and you’ll know exactly what you’re looking at every time you open a chart.

WHAT IS FOREX

Forex -> Foreign Exchange -> swapping one currency for another

Biggest market in the world  -> trillions traded every day 

Open 24 hours a day  -> 5 days a week (Sunday night to Friday night) 

No central exchange  -> traded between banks, brokers and traders all over the world

WHO MOVES PRICE

There are 5 main groups moving the market:

Central Banks -> set interest rates -> biggest influence

Commercial Banks -> trade huge amounts for themselves and their clients

Hedge Funds / Institutions -> big money, big positions

Businesses -> swap currency to pay for goods abroad

Retail Traders -> us -> smallest part of the market

Big money moves price -> we follow it, we don’t fight it

CURRENCY PAIRS

Currencies are always traded in pairs -> EUR/USD

First currency -> Base

Second currency -> Quote

EUR/USD going up -> EUR getting stronger against USD

EUR/USD going down -> EUR getting weaker against USD

There are 3 types of pairs:

Majors -> pairs with USD -> EUR/USD, GBP/USD, USD/JPY -> tightest spreads

Minors -> no USD -> EUR/GBP, GBP/JPY

Exotics -> a major currency with a smaller economy -> USD/TRY -> wide spreads, avoid

We stick to the majors

WHAT MOVES THE MARKET

Interest rates -> higher rates usually means a stronger currency

Inflation -> how fast prices are rising

Jobs data -> NFP, unemployment

GDP -> how well the economy is doing

Politics and big world events -> elections, wars, trade deals

All of this comes out on the economic calendar -> check it every morning

Red folder news -> high impact -> expect big moves

FUNDAMENTAL VS TECHNICAL

Fundamental Analysis -> news, economics, interest rates -> WHY price moves

Technical Analysis -> reading the chart -> WHERE and WHEN price moves

We are technical traders -> we use the news to stay safe, not to pick trades

BUY AND SELL

Buy (Long) -> you think price is going up

Sell (Short) -> you think price is going down

You can make money in both directions

PIPS, LOTS AND SPREAD

Pip -> smallest normal price move -> 1.1000 to 1.1001 = 1 pip

Lot -> size of your trade

1.00 lot -> standard -> around $10 a pip on USD pairs

0.10 lot -> mini -> around $1 a pip

0.01 lot -> micro -> around $0.10 a pip

Spread -> gap between the buy price and the sell price -> the broker’s cut

Every trade starts slightly in minus because of the spread

LEVERAGE

Leverage -> lets you control a bigger trade with less money

1:30 -> $1,000 controls $30,000

Bigger wins AND bigger losses

Leverage is a tool -> risk management is what keeps you safe

ORDER TYPES

Market Order -> get in now at the current price

Buy Limit -> buy lower than the current price

Sell Limit -> sell higher than the current price

Buy Stop -> buy higher than the current price

Sell Stop -> sell lower than the current price

STOP LOSS AND TAKE PROFIT

Stop Loss -> where you get out if you’re wrong -> EVERY trade has one

Take Profit -> where you get out and get paid

Plan both before you enter -> never move your stop further away

TRADING SESSIONS (UK TIME)

Asian Session -> roughly 12am to 9am -> quieter

London Session -> roughly 8am to 5pm -> big volume

New York Session -> roughly 1pm to 10pm -> big volume

London / New York overlap -> 1pm to 5pm -> most movement of the day

Exact times shift when the clocks change -> check your session indicator

TRADING STYLES

Scalping -> in and out within minutes

Day Trading -> trades opened and closed the same day

Swing Trading -> trades held for days to weeks

Pick the one that fits your life

RISK AND PSYCHOLOGY

Risk a small % of your account on every trade -> 1%

Losses are part of the business -> keep them small

Fear -> makes you close good trades early

Greed -> makes you overtrade and risk too much

Revenge -> makes you chase losses

Follow the plan -> journal every trade