Most novice traders make the mistake of trusting in Forex robots, purchasing them and thinking that they could just sit down while these Forex robots work on autopilot making them money. This is wrong, and causes more loss than it could ever give you winnings. It is pretty obvious that if it is too good to be true, most of the time it is. If it was really that easy, plenty of people would be millionaires now, having these “robots” trade for them.

Another mistake most novice do in Forex trading that you should avoid is trusting cookie-cut formulas sold by so-called trading gurus. There are no such thing is surefire way, or formula that will 100% allow you to win at all time. Once again, the simple rule of “if it is too good to be true, it is” applies here as well. The trading market is an unpredictable one, and it is impossible to come up with formulas, patterns or so-called surefire ways to always win. You need powerful and intricate strategies to be successful.

Avoid the mistake that most novice traders do, which is following Forex trading tutorials blindly. Tutorials are meant to help and educate, however, in order to succeed in Forex trading, it requires for one to invest time, energy and effort making proper planning, intricate strategizing, and calculating risks as well as following the latest news on the Forex market.

This brings us to another mistake – which is the lack of research, planning, strategizing and practice. There is no excuse to be lazy in the world of trading. Unless you do not mind losing money, you should put in effort and once you have a plan set, practice it. Never compromise in studying and researching as trading is a never ending journey.

Hope you learned a thing or two from this Forex trading tutorial – and what is most important is to continue learning and researching and find more sources to learn from.

What is Forex Market?
For the basic knowledge, forex market deals in money swap. In simple words its buying and selling of money. currencies need to be in pairs to held trading such as AUD/JPY or GBP/CAD as it is the exchange of unlike currencies; buying one currency and selling other currency at the spot so the difference result in loss or gain.

How Forex market works?
Similar to all markets, concepts of trading are similar and simple. People exchange currencies conditional on the fluctuation rates. To keep it simple, let’s take the following example.
• You are trading In EUR/USD currency pair, at the start of a year you bought 1000 Euros when the exchange rate was 0.90 So the transaction results in outflow of 900 dollars and inflow of 1000 Euros.
• mid of the year you exchanged 1000 Euros back into US dollars when exchange rate was 1.1 Therefore results in inflow of $1100 and outflow of same 1000 euros.
• Hence the net result is the profit of $200.
I.e. -$900 + $1100= $200.

Things you need to know.
Here are some necessary terms you need to know about forex;
• Spread - spread is the hidden cost termed as commission(cost of trade),its the difference in selling price and buying price.
• Margin - margin is one of the start up cost which is prerequisite for trading.
• Fundamental analysis - fundamental analysis shows wider aspects; assessing economy, social and political aspects. the concept behind is if economy is doing well so do the currency and vice versa. this type of analyis is appropriate for long term study.
• Technical analysis - technical analysis involves evaluation of historical prive movements. the most important thing to understand is trend and charts. Technical analysis primarily includes historical data; This analysis is referred to be mainly short term approach.
• Charts - Chart is one of the essential instruments used to study forex market. There are mainly three types of charts.
• Line charts - Line charts are simple and simple to study. line charts are drawn by taking opening and closing values.. It is best suited to analyze overall directions.
• Bar charts - bar charts also known as OHLC,i.e. high,low,open and close.
• top point represents high price
• horizontal line on the right of the bar represents closing price.
• line on the left side of the bar shows opening price.
• Lowest price is shown at the low point of the bar.
• Candle charts - this type of chart is a further modification of bar charts,addition in candle chart is the inclusion of colored candle stick body parts (colors may vary on various platforms).
• increase in price is shown in green color.
• Red color is for negative i.e. prices decreasing.

With understanding basic charts you can be a successful Forex trader and can earn a lot of money. With very low entry cost, less entry barriers and no time limits many traders and investors are attracted towards Forex trading. Be consistent and learn from your experiences. Focus on experience, to remain updated you need to study Forex glossary,which includes all the terminologies used in Forex markets. For more information take a look at our Forex trading tutorial!

Good luck!

The topic in itself may sound boring or may seem too jargon for many. Money is fun, but actually learning about how it is converted and how various countries trade with each other is an entirely different thing. I would imagine a lot of people falling asleep in the middle of a session or barely making it through because of the lack of will power to actually succeed in it.

Well, luckily, if you have finally selected your choice of Forex Trading Tutorial, you’d be ready to be blown away by the new method of having to acquire further learning from brokers’ or market makers’ analysis. Technology is developing at a very fast rate and everyone is also trying to keep up with it. The current trend in tutorials is to make it more interactive to the audience. You no longer need to waste your time reading and memorizing numerous book chapters and end up reading them all over since you lost grasp of the different values for each currency and the basic Forex concepts.

Forex Trading may definitely sound a bit intimidating, but learning about it through Forex Trading tutorials is definitely rewarding. This is true with both the process and the benefits. Most people describe it as a fun way to acquire knowledge about various currencies in circulation. We may have grown old but it is not too surprising to find out that using a more interactive approach in learning about the profits gained when one wants to go long on USD or EURO and/or other business transactions in the trade can increase the amount of information retained plus it makes the topic seem less threatening. It helps that the tutorial includes a detailed instruction on chart reading, financial risk management, technical analysis, and other news and trading announcements.

People who developed and structured the Forex Trading Tutorial in this approach allow the participants or the learner to be in a classroom environment where they can interact with other people who are learning about Forex Trading. An additional feature is the way the Facilitator of the program interacts with you, as well. You can address your questions directly and get real time responses and work with the facilitator, which gives you a feel of the way they provide attention to detail and the eager attempt of addressing your needs. At the end of each segment, you will also be provided some work and feedback regarding it, which helps you apply the knowledge that you have just acquired, making the Forex Trading Tutorial seem the more practical and efficient approach in learning and secures a successful trade career for the learner.

First things first, what you have to do is to study various Forex trading strategies. There are plenty of strategies that could be used like stochastic, moving average and so much more. One of the more popular and effective strategy is price action. Find out all the strategies that are always talked about – there are reasons behind its popularity. Revise each strategy well, learning the ins and outs of it, not just step by step information that you find on the internet. Once you have learned various techniques, it is time to pick one. Go ahead and choose your favorite to try out.

Once you have selected your favorite strategy, delve in deeper. It is not enough to just have a gist of it or understanding what it is. Find more resources and study specifically on that one strategy, including techniques, variations, variables and so on. It is a time consuming process, but remember that trading involves money and you want to minimize your loss as much as possible. It is best to put in effort to actually learn, study and research a strategy before you employ it blindly. Once you think you have learned what you think you should learn, move on to the next step.

This step is the most important of all, and often overlooked in most Forex Trading Tutorial. Go ahead and sign up for a Forex trading practice account and put into practice your strategies there! This does not involve real money and you can learn from your mistakes. Some practice trading accounts integrates in-built Forex Trading Tutorial that you could follow as well. It makes perfect sense because you are new, and you should not immediately “attack” the Forex trading market until you get used to it.

Being successful in Forex Trading takes plenty of research, study, time and effort, as well as learning from countless Forex Trading Tutorial which could help you increase your knowledge to get ready for the big market.

Things you should look for when evaluating a Forex broker:

1. Credibility

It is the most important thing to look at – after all, you wouldn’t hand over a hundred bucks to a person who simply claims they’re legit, let alone thousands (and trading capitals often are in tens of thousands). Fortunately, it isn’t that hard to check the credibility of a broker at least to some degree – look for a regulatory agency in the country where the broker operates. In United States, that would be Commodity Futures Trading Commission(CFTC). Make sure the broker is a member of a regulatory body.

2. Spread

Spread basically is the transaction cost – you will have to pay it every time you enter a trade. Of course you will want those to be as low as possible, but never sacrifice credibility and security for low spreads.

3. Trading platform

You will spend a lot of your time in your brokers trading platform. It should contain all the necessary tools that you will use. If you are going to trade by using forex trading experts or other means of automated trading, it usually means that you should have to pick a broker that offers MT4/MT5 platform, if you are trading manually – you can use almost anything. To be honest, I haven’t seen a trading platform that doesn’t have at least the basic tools available nowadays.

4. Customer service

Problems happen. What separates good brokers from bad, is their customer support – and specifically, “after sales” support. I’d suggest you look around in Forex forums, for example, forexfactory.com and see if there are threads about that broker. Usually people share their experience, so if the broker is big enough, you will find a lot of customer opinions. Also there is a site called reviewpips.com where traders post their opinions on brokers.

Beware of bucket shops

Bucket shop basically is a Forex broker that cheats by not providing you with the correct price quote, making you to basically bet against them. Nowadays, that term is used to refer to brokers that don’t pay etc.

As long as you go with a decent sized company, who has plenty of reviews, like Oanda, Forex.com etc., which is a member of a regulatory body, you shouldn’t have that problem. For related information, please take a look at our Forex trading tutorial.

A lot of beginning Forex traders don’t know where to start their education, what is important, and what isn’t – in other words, they are suffering from information overload. New traders are confused about a lot of things – like whether they should choose automatic or manual trading, what are the important indicators, and what type of trading strategy they should use.

However, there are 3 things that you should learn as a beginner that will save you a lot of research time and perhaps even money.

1) Learn trend lines, support and resistance

These are the most important things you should learn about Forex – and these things alone can make you rich if you apply them properly. Trend lines are simple lines that you draw through price pivot points (the points where price was either supported or resisted by an area). If this sounds complicated – don’t worry, it is actually really easy. Support or resistance are even simpler – if the price reaches a level from which it is rejected (goes back down), it means it has encountered a resistance. Support is the same, only in other direction – the price goes down, encounters the support, and goes back up.

2) You don’t need every indicator to trade profitably

Even more, you don’t need any. If you choose to use one (and I urge you to start with just one), learn how it works, and even more important, learn under what conditions it doesn’t work.

Never base your trading off an indicator alone. All of them are lagging behind, that means, their signals are late. Indicators can be used, but never base your trading system on one, instead, use indicator as a supplement.

3) Always be aware of news releases and what’s going on fundamentally

At all times, you must understand the direction of general trend, and what’s going on fundamentally – which currency is perceived as the stronger one at the moment. You should also not trade during major news releases – because these tend to shake the market, and give false signals.

As you can see, these 3 tips are really simple, and while there’s a lot to learn about Forex, experienced traders agree, that these 3 tips are crucial to your success in trading currencies. Remember, learning to trade currencies isn’t that hard, but a lot of patience is required in order to learn to trade profitably month after month.

If you are wondering about whether it is possible to earn additional or full time income trading currencies, this article is for you. Let’s find out.

There is a lot of Forex information for beginners, and unfortunately, a lot of it is full of either hype, or are screaming to stay away from Forex. The truth, however, is really simple, and can be found somewhere in the middle.

Let’s deal with the hype first. If you have researched Forex robots – automated software that does your trading for you – you know very well what I’m talking about. They promise insane gains out of couple of hundred bucks, a fancy lifestyle, a yacht and millions and whatnot – all that if you buy their product for about hundred bucks.

The truth is, that while those robots sometimes work, more often they do not. The problem is that they are suited to a certain market condition, and once that condition is not true anymore, they can quickly lose your account. My advice – stay away from them, and you’re half way there.

Now there’s doom and gloom side of the story – that Forex is a scam and everyone who goes near it, loses their money. That isn’t true either – it happens because people aren’t careful with choosing their broker (there are some shady brokers around that won’t pay out your earnings, and in that case it doesn’t matter whether you are a good trader or not), or they simply risk too much, or they just think of Forex as their ATM.

As you can see, every problem with Forex is created by people themselves. The Forex itself is not a get rich scheme, and neither it is a scam. It is just a tool, which some people use to earn a decent living – and some people lose money in it.

The answer to the question whether it is possible to make money with Forex is a definite yes. In order to do that, though, you need to be careful, and study simple price action in order to understand what’s going on in the market, learn about money management to risk proper amount of capital on any single trade, and understand your own psychology – what trading strategy suits you the best and, if you are a beginner, take a look at our Forex trading tutorial as we believe it is a must-read topic to get you started!

I’ll start by shortly explaining who I am. My name is Steve and I have been trading currencies for 3 years now, and last two and a half of them – quite successfully. It took quite a lot of learning and surprisingly, the most important things I had to learn weren’t even about Forex. Instead, I had to learn about my own psychology and how to apply this to trading. So this forex trading tutorial will deal both with technical and psychological aspects of trading, because my firm belief is that they are equally important.

There is a famous saying in Forex community – “any idiot can read a chart”, and this is something I can only agree with – the technical side of trading is dead simple. What makes people lose money, it is their greed in one form or another.

I can’t stress this enough – there is absolutely no need for you to lose any money trading currencies. Period.

Let’s get on with our tutorial.

First, some basics

Forex, as you probably already know, is a global market where companies, banks and people exchange currencies. The size of this market is enourmous – the volume of all the trades is around 4 trillion dollars every day! Technically, though (if you are going to quote me on this) you should know that retail Forex traders (like you and me) trade spot FX market, which is around 1.5 trillion. Make no mistake.. this is still huge. For example, the NYSE (New York Stock Exchange) market volume is 74 billion. Way less.

Forex trading, in essence, is the simultaneous buying of one currency and selling of another. We trade through brokers, and we trade in pairs. For example, EUR/USD, AUD/JPY and so on. Basically you buy or sell a pair of currencies. Exchange rates fluctuate all the time based on which currency is stronger at the moment – ie, if a dollar gets stronger the EUR/USD exchange rate falls – since you now need less dollars to buy euros.

We, Forex traders, make money by predicting those movements. For example, if I believe that over, let’s say, a day, the dollar will get stronger (which would mean the EUR/USD rate falls) I’d sell the EUR/USD short – in essence, that means I’m selling something that I don’t have, borrowing money (against my trading capital) and counting that the exchange rate will fall just as I predicted. When it comes time to close the trade, and the exchange rate has actually fallen, it is time to collect the profits.

Market analysis

Of course, to make any predictions you have to analyse the market. Now this might sound scary, but in fact don’t oversweat this, at least in the beginning. It is perfectly possible to make money with very simple support/resistance trading, you just have to understand that you won’t be 100% right and there will be losing trades. The key is to plan your risks accordingly.

There are three types of market analysis, and while there are people that swear by each one of them, I sort of think that you should at least know all of them. Here they are.

1. Technical analysis – the theory behind it is that traders can look at the historic price movements, and predict what will the market do in the future. We use charts to do technical analysis, and while there are a lot of complex patterns, I believe that the more complexity, the less likely the trade will work.

2. Fundamental analysis – means that a trader analyzes the economic, social and politic forces that determine the supply and demand of an asset. An example would be, if you see that the economy is bad in the United States, you could deduce that the dollar would get weaker on foreign currency exchange markets, and buy EUR/USD.

3. Sentimental analysis – if you thought that the previous two were esoteric, this one will take the crown Sentimental analysis means that you analyze the market sentiment – for example, if all traders think that dollar will go up, it actually will go up because all the traders are selling eur/usd, thus increasing the demand for this asset, and it will have nothing to do with any technical support/resistance or any fundamental data.

As I said though, you have to sort of keep the big picture in your mind. Myself, I basically trade according to technicals, and keep an eye out for fundamentals – news releases, economic data and so on. Also I check trader sentiment every now and then because there is no point in going against the wave.

Ok, so how do you actually spot the trades worth entering in?

This, of course, is the million dollar question. If anyone knew this for sure, they would be very very very rich. And the world as we know it would’ve collapsed. However, since this is a forex trading tutorial, I feel that I at least should offer you information on what I, personally, do.

I trade simple support/resistance, and I usually wait for some sort of confirmation. The idea behind support/resistance is that, for some reason (could be fundamental, could be sentimental..) a certain price point gets resisted (if the market goes up) or becomes support (if the market goes down). Once the price reaches that point, I watch very carefully – and if I get my confirmation (very simple – watch for more than one time of the price resisting/bouncing off a certain level) then I know it is time to enter the trade.
Believe it or not, I’ve made some decent money using this strategy There really is nothing more.

Now you may wonder why such a primitive strategy works? The answer is simple.. and yet complex at the same time. Because it deals with who you are as a human being.

Trading psychology – managing your risk and exiting trades at the right time

The trading psychology is a subject that will make or break you as a trader. At all times, you should remember at least these things. They are really important.

Manage your risks. Never, ever, risk more than 2% of your trading capital on any single trade. I actually like to keep it at 1% but I think that 2% is acceptable as well. Remember, this comes from someone who does actually makes money trading Forex! So if you are not making any money now and are thinking of risking 50% on each trade.. well go away and never trade forex, at least until you reconsider. That is simply reckless trading and a sure way to lose your capital.

By risking 2% on each trade I mean that your maximum loss if the trade goes south should be not more than 2% of your capital. The trade going south is determined by your stop loss – something you should always use. I usually place the stop loss around next significant support/resistance zone, and size my position accordingly.

However, it is funny that I find the losing trades pretty easy to manage. What came hard to me was managing winning trades. I mean, how do you actually know when it is time to take your profits and close the trade? I can’t even count the times when I lost money just because I was too greedy and thought the trade would run some more – just to watch my profits disappear because market decided to go the other way!

Nowadays I just wait till the trade goes in profit and market stabilizes there, and then I move my stop loss to a break-even point. That means that even if the market goes against me I won’t lose a single cent of my trading capital.

Remember – your trading capital is your life and you should protect it. A break-even trade is a win in my book.

The greed is something you will probably find very hard to manage at first.. Remember to be calm about everything – thats why I’m telling you to risk no more than 2% of your trading capital on any trade – this will make you calmer and also allow room for error – because all we, as forex traders, can hope for, is that our winning trades will exceed our losing trades, and our trading capital will grow.

Conclusion

This forex trading tutorial is by no means complete. You should seek other resources, and learn as much as you can about it.

Always remember, that currency trading is a high risk investment. I don’t say this for legal reasons. I genuinely don’t want you to lose your money. Start with a demo account, these are free. Only when you feel ready, you should graduate to real account.

Guys, let me repeat this one more time. This is high risk stuff, and this is not a get rich quick thing. I wish you all the profits, but please understand that these come with work and caution! Good luck!

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If you opened this article to find a sure way to riches using the international currency market, you might as well go away now. You must at all times understand, that there is no sure way to riches anywhere, let alone Forex, which is a very risky market, and without proper education, you will probably lose your money.

However, there is one – and just one – thing that will, if applied properly, allow you to increase your capital in a steady manner, allowing you to compound your way to a nice financial future. That is money management. You should always be aware of what you’re risking on any given trade, and you must make sure that a losing trade will not destroy your account, in fact, your account should not suffer more than 2-3% drawdown if your prediction about market movement was wrong. If you are applying this principle, then you are already on the right course, and there’s not much more to tell you – any more or less sane system will work.

As I like to put it, the best way to earn money in Forex, is simply not to lose it. Winnings will happen, and compound interest will just take care of the rest.
The main problem with beginning traders is impatience. Professionals in Forex market agree, that an average monthly return of 4% is attainable and reasonable goal. And of course, if you are trying things out using a starting capital of let’s say $1000 (which is absolutely the right thing to do – start with small amounts), 4% equals 40$. Not much, right? And that is where new traders get impatient and start risking more to gain more, forgetting that they also increase not only their chance to earn more, but they also increase possible losses.
You should always look not at the total amounts you make, it doesn’t even matter how big your account is, but instead, look at the percentage you’ve increased your account. For example, 4% of $1000 is just 40$. But think about it – if you patiently have increased your account to $100,000 – 4% is $4000, which is a nice amount of money, right?

So, here’s a recipe on how to earn money in Forex – apply money management, always be aware on how much of your account you are risking, and be patient. Compound interest will take care of you then.