Welcome to CBS FX

TRADING
FOREX TRADING PROGRAM
 FOREX TRADING COMMUNITY
 
FOREX TRADING MADE EASY- by MBAH MICHEAL CHIBUEZE
Welcome to the world of Forex Trading. Note that this training am giving you for free here cost more than $500. I know
you want to be independent rather than losing money to fake Ponzi schemes like the pyramid and some MLM schemes.
Today you are going to learn the following topics about Forex Trading.
Fig. Participant s in the Forex Market
 PART1.
 

These are stage/part 1 topics

 INTRODUCTION,
 WHAT IS FOREX TRADING,
 WHAT IS TRADED IN THE FOREX?
 WHO IS A FOREX BROKER,
 TRADING TIMES AND TRADING SESSIONS,
 TERMINOLOGIES USED IN FOREX,
 FORMS OF TRADING,
 CURRENCY PAIRS
 , MT4 INTERFACE
  INTRODUCTION,
Forex simply means foreign exchange. The foreign exchange market is a global decentralized or over-the-
counter market for the trading of currencies. This market determines foreign exchange rates for every currency.
It includes all aspects of buying, selling and exchanging currencies at current or determined prices
  WHAT IS FOREX TRADING,
 

Forex Market is the largest market in the world with a total daily liquidity of about $6.8
Trillion dollars. It is larger than the New York Stock Exchange market and Cryptomarket
combined ( total cryptos in circulation). Today the 15th June, 2020, the Cryptomarket value
is $170 Billion, according to Coinmarket cap. The statistics are online.
You can as well search for more details. This is just to show the liquidity of the Forex market
and how large it is. In the Forex market, liquidity pertains to a currency pair's ability to be
bought and sold without causing significant change in its exchange rate.
A currency pair is said to have high level of liquidity when it is easily bought or sold and
there is a significant amount of trading activity for that pair. This is a brief intro which I think
we will continue to see more as were study.
  WHAT IS TRADED IN THE FOREX?
In Forex Market, we trade currency pairs like the ones listed here; USDollar-USD, EURO-EUR, POUNDS-GBP, AUSTRALIAN
DOLLARS-AUD, JAP YEN-JPY, SWISS FRANCS-CHF, NEW ZEALAND DOLLARS-NZD, CANADIAN DOLLAR-CAD, SOUTH AFRICAN RAND-
ZAR e.t.c... Apart from currencies which are the most traded, commodities like precious metals, sports, oil are also traded on the
Forex Market.
Two currencies are traded against each other. For example you can trade EUR against USD which means EUR will either rise or fall
against Dollars or USD against CFA

Fig. 2 Show the different currency pairs in the Forex Market. The
one on the left is the Base currency and right Quote currency.
So we trade the quote currency
EURUSD EUR is the Base currency(BID PRICE) and USD is the quote currency(ASK PRICE)
 
That's our example

WHO IS A FOREX BROKER

 
These are firms that gives you access to the FOREX Market by providing a trading account for you.
They give traders what we call Leverage. (You will see it soon). They also provide support functions to the traders. There
are various Brokers in the Forex Market like; FBS, Hotforex, Fxtm, Fxcm, LiteForex, Instaforex and many others...
 TRADING TIMES AND SESSONS
Now we have started touching the backyards or the real roots of Forex Trading so open your brain now. You need to know the
Forex Market. There are various Trading Times and Trading Sessions in Forex.
They include; SYDNEY SESSION, TOKYO SESSION, LONDON SESSION, FRANKFURT SESSION, NEWYORK SESSION. Sessions names
are derived from the cities where most transactions are done. E.g SYDNEY represents Australia and other countries around the
time zone and the others as well. Frankfurt represents EUROPE and countries along the time ZONE.
Forex is actually 24 hrs Market that's why it is regarded as the market that never sleeps except on weekends. No matter where
you find yourself on earth, or on any time zone you can trade.
Let’s talk now of the trading times; SYDNEY SESSION opens by 9 PM GMT, Tokyo Session opens by 11 PM GMT, London Session
opens by 7AM GMT, Frankfurt Session opens by 8AM GMT and the New York Session opens by 1PM GMT. Then almost the
whole of West African country’s time zone should be that of London. Note that if it’s not open, you can't trade. For the rest of
the world, use your time zone and the corresponding Session above.
You must have heard about Forex before I' am aware though you may not know how to trade the market. Hey some of your
friends keep the secret to themselves and only the wise guys are hitting the stories behind Forex. They would rather help you
out on their nice cars, buy you hot drinks.
TERMINOLOGIES USED IN FOREX
In the field of Forex, you would need to learn about the terminologies so as to communicate with the market.
To go Long means to Buy.
To go Short Means to Sell. What we are doing in Forex is buying and selling.
Bullish Market means the market is going upward.
Bearish Market means the market is going down
Ranging is when a market does not have any particular direction. It’s neither moving upward or downward.
Trending... the market has a direction, its either moving downward or upward. So people will say the market is trending upward
or downward.
Hawkish refers to the Central Bank Governor or personnel of a country. They tend to be liberal on the interest rate and are
willing to increase it.
Dovish is simply the opposite of Hawkish because they are very restrictive and they do not want to temper with the interest rate
and this is bad news for investors.
Currency pairs have names e.g Dollar is called Greenback (Buck), the Pound is called the Cable, the New Zeal Dollar is called kiwi,
So some people on this same day will earn what you have been working for the whole 12 Months on NFP afternoon. The News is
released by the US bureau of Labour Statistics. It contains the amount of New Jobs added to the US Labour Sector in the previous
sector. It also tells which sectors in the economy the New Jobs were added so as to guide them to invest.

Technical Analysis
Technical Analysis is a form of trading when you analyze the market using Charts, Patterns, Candlesticks, Fibonacci,
Pivot Points, Elliot waves e.t.c... Technical is the most popular because News is not released everyday so you can't just
depend on Fundamental Analysis alone. You must learn Technical analysis as trader. This one completely makes you a
Forex Trader.
Among the two, no one is superior than the other and non is used in isolation.
CURRENCY PAIRS
Here we would need to download MT4 App in Google Play store as we get into more serious business right now. Open
the App and register. We will all start with a Demo Account. Open App and click on "login as Demo" at the top left, then
where it is written start without registration. It's a step by step. To add more currency pairs, click the plus sign to see
folders of where to add more currency pairs.
If you don't have the app, download it now
Once you are done, click Quotes to see currency pairs but others go there automatically.
 FORMS OF TRADING
There are basically two types of trading; Fundamental Analysis and Technical Analysis.
Fundamental Analysis is also known as News trading. Here you are analyzing the Forex market with respect to News. Everyday
various news are being released by these major countries and they can be positive or negative which can affect the currency pair
and you make trading decisions based on what you heard.
Those in the Crypto Trading would tell you that you only make money when a coin is appreciating but in Forex we make money
both ways. So if a currency is appreciating, we go long on the pair but when a currency depreciate based on news, we go short on
the pair.
The News is released by the United States of America and it makes the most volatility in the market.
In FOREX, we calculate profit in Pips (we talk about the soon). On a NFP(Non Farm Payroll) news day, you don't need too much
trading pairs to make huge profit. Just a single currency can make a move of 80 Pips within 5 minutes.
The News is up by 12:30 every First Friday of the Month. So never fix anything to do at this time of the month even your marriage
or honey moon.
So some people on this same day will earn what you have been working for the whole 12 Months on NFP afternoon. The News is
released by the US bureau of Labour Statistics. It contains the amount of New Jobs added to the US Labour Sector in the previous
sector. It also tells which sectors in the economy the New Jobs were added so as to guide them to invest.

Technical Analysis
Technical Analysis is a form of trading when you analyze the market using Charts, Patterns, Candlesticks, Fibonacci, Pivot
Points, Elliot waves e.t.c... Technical is the most popular because News is not released everyday so you can't just depend
on Fundamental Analysis alone. You must learn Technical analysis as trader. This one completely makes you a Forex
Trader.
Among the two, no one is superior than the other and non is used in isolation.
CURRENCY PAIRS
Here we would need to download MT4 App in Google Play store as we get into more serious business right now. Open
the App and register. We will all start with a Demo Account. Open App and click on "login as Demo" at the top left, then
where it is written start without registration. It's a step by step. To add more currency pairs, click the plus sign to see
folders of where to add more currency pairs.
If you don't have the app, download it now
Once you are done, click Quotes to see currency pairs but others go there automatically.
We register only when we wanna trade
Currency pairs involve Base and Quote currency. You will find EUR/USD, one of the most common currency pair used on
the Forex market
Fig. shows a set of currency pairs. The one on the left is called the Base
(Bid price) and the one on the right the Quote (Ask price) currency.
We call two currencies a pair or quote and it may be any currency.
USD/EUR, USD/CFA, USD/GBP e.t.c EUR/USD means EUR is the based
currency and USD is the quote currency. Same as CFA/USD means CFA
is the base while USD is the quote.
We always trade quote currencies against based currencies meaning
that we predict a rise or fall in quote currency. EUR/USD means we
predict the USD will either rise or fall against EUR and you make profit.
 FOREX TRADING PART II
We are done with Forex Trading Part 1 and now you have to follow carefully the part 2 steps which are very simple to
understand. They will fall under the following topics;
 WHAT IS A PIP,
 CONCEPT OF BID AND ASK PRICE,
 WHAT IS SPREAD,
 FORMS OF TRADING ORDER,
 CONCEPT OF TAKING PROFIT AND STOP LOSS………..PART 2.
Today marks the beginning of your Forex journey. We are going to start with this topics

WHAT IS A PIP
Note that the bedrock of everything we are going to do depend on how you understand Pips. Currencies are gauged in Pips.
Trade orders are placed in Pips, profits are calculated in Pips. Practically everything we are doing in Forex involves Pips.
A pip is the smallest unit in which a currency pair can change. It is said to be a standardized unit and the smallest amount by
which a currency pair in Forex market can change. Smaller versions called MicroPips also exist.
 How To Calculate Pips: Please here we need maximum attention. For most pairs in Forex, we start calculating the Pips from
the fourth 4th decimal place ie 1.15246 if you have 5 figures your pip still remains at the position even when they are 4.
Example 1: Let’s assume EURUSD pair currently at 1.1661, making move of one pip give us a new value of 1.1662
Example 2: If on the sell side you find 1.1661 and on the buy side you have 1.1662, it means that 1 pip has added to it.
 if the same EURUSD moves 5 pips upward we are going to add 0.0005 to 1.1661 to have 1.1666. Here the market is
always volatile and this volatility is measured in Pips.
1.1661
+0.0001
=1.1662
I have added 1pip to 1.1661
 
1.1661
+0.0005
=1.1666
Here I have added 5 pips. We add when buying. We add using the Ask price.
N/B: Let’s assume that the AUDNZD pair made a move of 10 Pips from 1.0930. Give
me the answer guys
 
 Lets do some exercises now
Answer using this format
1.
2.
3.
 When buying you use the price I have circled (Ask price)
1. 108.60
2. 1.4027
3. 0.9680
 
ANOTHER EXAMPLE:
1. 111.73
2. 1.4543
3. 0.9848
4. 0.5791
Your answer is what we call Take profit. Simply called by us TP
1-1.0231
2-0.8569
3-0.5809
4-0.9179
Check prof video on how to buy in the forex market.
Our answer is TP which should always b more than our SL
In buying we add(TP) more n subtract less(SL) from the same price.
In Selling we subtract(TP) more n add less(SL)from the same price
 HOW TO SELL
When selling we use which price guys?
 
 FOREX TRADING PART II
We are done with Forex Trading Part 1 and now you have to follow carefully the part 2 steps which are very simple to
understand. They will fall under the following topics;
 WHAT IS A PIP,
 CONCEPT OF BID AND ASK PRICE,
 WHAT IS SPREAD,
 FORMS OF TRADING ORDER,
 CONCEPT OF TAKING PROFIT AND STOP LOSS………..PART 2.
Today marks the beginning of your Forex journey. We are going to start with this topics

WHAT IS A PIP
Note that the bedrock of everything we are going to do depend on how you understand Pips. Currencies are gauged in Pips.
Trade orders are placed in Pips, profits are calculated in Pips. Practically everything we are doing in Forex involves Pips.
A pip is the smallest unit in which a currency pair can change. It is said to be a standardized unit and the smallest amount by
which a currency pair in Forex market can change. Smaller versions called MicroPips also exist.
 How To Calculate Pips: Please here we need maximum attention. For most pairs in Forex, we start calculating the Pips from
the fourth 4th decimal place ie 1.15246 if you have 5 figures your pip still remains at the position even when they are 4.
Example 1: Let’s assume EURUSD pair currently at 1.1661, making move of one pip give us a new value of 1.1662
Example 2: If on the sell side you find 1.1661 and on the buy side you have 1.1662, it means that 1 pip has added to it.
i.e 0.0001 has added to it to give 1.1662 but we still have the same answer. This is very simple great friends.
 if the same EURUSD moves 5 pips upward we are going to add 0.0005 to 1.1661 to have 1.1666. Here the market is always
volatile and this volatility is measured in Pips.
1.1661
+0.0001
=1.1662
I have
  added 1pip to 1.1661
  1.1661
+0.0005
=1.1666
Here I have added 5 pips. We add when buying. We add using the Ask price.
N/B: Let’s assume that the AUDNZD pair made a move of 10 Pips from 1.0930. Give me the answer guys
 
 Lets do some exercises now
Answer using this format
Answer using this format
1.
2.
3.
 When buying u use the price I have circled (Ask price)
1. 108.60
2. 1.4027
3. 0.9680
 
ANOTHER EXAMPLE:
1. 111.73
2. 1.4543
3. 0.9848
4. 0.5791
Your answer is what we call Take profit. Simply called by us TP
1-1.0231
2-0.8569
3-0.5809
4-0.9179
Check prof video on how to buy in the forex market.
Our answer is TP which should always b more than our SL
In buying we add(TP) more n subtract less(SL) from the same price.
In Selling we subtract(TP) more n add less(SL)from the same price
 HOW TO SELL
When selling we use which price guys?
N/B: So u will be subtracting from the bid price
I need answers:…………
1.0240
0.8541
0.5790
 
 0.6366
0.6652
0.0447
0.8822
Listen to prof video on how to sell
DIFFERENCE BETWEEN ASK PRICE AND BID PRICE
 Spread: The spread on demo is very huge but on live account is very small
 
CONCEPT OF BID AND ASK PRICE
Beside each currency pair, you would see 2 prices. Ignore the 2nd one for it will be treated later. The 1st one is
the BID Price and the 2nd one is the ASK Price.
 
BID price is the price that buyers are willing to buy while ASK Price is the price that Sellers are willing to sell.
E.g you received $10000 from a sister abroad and you went to the Bank to change it to CFA (You are the Seller).
The bank would tell you that the latest exchange rate is 550/$ so they will give you FCFA 5 500 000 the
equivalent of $10000. The next day an urgency come up and you needed $10000 to travel for your honey
moon and you step into the Bank and the bank now tells you that their exchange rate is 600 FCFA/$,(Bank is
the seller now) now you have to pay FCFA600000 for that same $10000. In this situation, FCFA550 is the BID
PRICE and 600 is the ASK PRICE. The Bank just made a sum of FCFA 500000 from this one transaction and
 They will never want you the customer to learn Forex Trading because its liquidity can change your fortune in just a few
weeks of trading. Well knowledge is only circulated among elites.

In Forex Trading, Bid and Ask work the same way not as exuberant as the one Banks exploit us with. Their difference is just
in points. Here buyers and sellers are not human beings. You buy from the market and sell to the market. When you place a
BUY order, it would activate for you using the Ask Price. The ask price is always higher than the Bid price. So they gave you
the $s at the ASK price.
WHAT IS A SPREAD
SPREAD is the difference between the BID and ASK price. In the example FCFA550-FCFA 600= FCFA50. FCFA50 is the SPREAD.
That is the bank's profit. In Forex as well, the spread is also the profit
of the Broker but very small because it is measured in pips.
Example1
In Forex trading, the 'spread' refers to the difference between the Buy (or Bid) and Sell (or Ask) price of a currency pair. For
instance, if the EUR/USD Bid price is 1.16909, and the Ask price is 1.16919, the spread is 1 pip. If the Bid price is 1.16909
and the Ask price is 1.16949, the spread would be 4 pips.
Lets say it was the manager trading and the bank was the broker. 50 frs will go to the bank. 500k to the manager
Example 2
If the difference between EURUSD Bid and Ask at this particular trade hour is 1.1705-1.1704= 1 pip, the broker's profit from
the trade is 1 pip even if you make 80 pips or 90 pips.
 
 FORMS OF TRADING ORDERS
Take Profit and Stop Loss are the two types of market orders.
Take Profit; As a trader, you will not always be online to monitor all your trades. Some of your trades may take a few
minutes and others a day or maybe you have an outing with your little chick, or Boo or you have to go to church. This is
where market orders come in.
Take profit tells your Broker to close your trades for you and Lock your profits when your Trade moves a certain number
of pips even if you are not online
In the Fx market we are always buying or selling. Let’s say you entered a currency pair AAA/BBB and it’s currently at $40
and from your technical and fundamental analysis, you found out that it would still rise. You immediately open your MT4
and click on buy with a target of 50 pips. Please don't be greedy. Pick the little you have.
 
For you to set a target of 50 pips, you add it to the price you entered which was $40, so you TP would be $90. Once it
reaches $90, your Broker closes the trade for you automatically and will add the $50 to your account instantly. That's how
TP works.
Let’s open our MT4 to see where to set TP. Go to screen and select a currency pair, press and hold a currency pair you
wish to Buy or Sell. A small menu will appear and you click NEW ORDER. Enter your TP IN THE BOX BELOW ASK PRICE,
whether you are buying or selling.
Ex if I want to buy EURGBP at a current ASK Price of 0.8958 and I want to take a profit of 40 pips, then add 40 pips to the
ask price. So your TP=0.8998 so immediately as a currency pair rises and reaches this 0.8998 you -broker closes the Trade
for you send your profit to your account whether you are online or not. Note that i used Ask Price because I was buying,
during Selling, we would use Bid Price.
If i wanna buy this EURCAD PAIR with 15pips, my tp will be 0.8675+15=0.8690 and i subtract what am willing to loss from
that same price to have my stop loss lets subtract 5pips. 0.8675-5=0.8670 which is my stop loss TP=0.8690
and SL=0.8670. A reverse for a sell
 
Let me demonstrate a sell with our bid price
Lets sell 20 pips= 0.8671-20 our TP=0.8650 AND WE DECIDED TO ADD WHAT WE ARE WILLING TO LOSS IF IT GOES
AGAINST US. Lets add 8 pips to that same bid price 0.8679= SL SO our
TP=0.8650 and our SL=0.8679
 
In SELLING, we use the Bid Price. You are selling because you found out from your Technical and Fundamental Analysis
that the price would fall. As the price is falling, you are making money which is the opposite of Buying.
Ex We want to sell AAA/BBB pair and the price is at $100 and we have seen from our analysis that it would fall, we open
our MT4 and click SELL and our target profit for the pair is 45 pips, in this case, we do the reverse, we subtract the Take
Profit pips from the initial price. So our profit would now be set at $55. The price below is subtracted because we are
selling. Immediately the price drops from $100 to $55, the broker sends 45 pips profit to your account. That's it with
Forex, rising or falling you gain.
Ex. Let’s say after your analysis you found out that EURJPY would fall and you decided to short (Sell) the pair. Now we are
dealing with BID because we are selling and the price is currently at 128.94 and i want a TP of 60 pips, the value of my
TP=128.34.
STOP LOSS means that, you set your trade to a target; if you are losing much and you reach there the trade will stop. STOP
LOSS is the opposite of TAKE PROFIT.
Fig. On the right you enter your trade e.g 147. 65 i.e you added 5 pips, meaning the on the SL you can enter 147. 55
meaning that if you are losing, it will stop here if not your account will be emptied.
 FOREX TRADING PART III
Our Forex Trading using the MT4 App part 3 includes the following topics;
 LEVERAGE
 LOT SIZE,
 RISK MANAGEMENT
 COMMON MISTAKES BY TRADERS
 TRADING PLAN
 MT4 INTERFACE.
Let’s start with the first topic;
 LEVERAGE
Leverage is the ability to use something small to control something big. In Forex Trading we say that we are using small capital
base to control larger lot size. To understand it, let me tell you how Forex used to be. It was not anyone who could trade
Forex. Forex was only traded by People call KABALS "Men of the wall streets" So only banks, big businessmen, Company
owners could trade
Example, to trade in the New York Stock Exchange, you should be making a specific amount of millions of dollars per year. No
owing any mortgage, tax documents updated and a couple of criteria just to limit it only to the Elites. So you and I couldn't
have benefited without Leverage.
 Now Brokers now set in due to the proliferation of internet, you and I can pass through brokers and also trade online. These
brokers have so many customers that could solve the problem of capital for us. Brokers have enough capital and we can now
jointly trade with them.
Instead of looking for $1M to start trade, just with $20 you can trade in the Forex Market. You went to the market through
your Broker and the World Bank recognizes him as a formidable force. Hope it is well understood.
 
Now your Broker is giving you Leverage in the Forex Market that permits you to trade. The principle of leverage is to multiply
your little capital so that you can use it and buy something bigger.
Example: 1:500, 1:1000 e.t.c... Let’s say you choose a leverage of 1:500 during registration with $100 as capital, you can be
able to place a Trade of $100*500=$50000. So you are actually controlling trade worth $50000. That's what we have in Forex
appreciable.
 LOT SIZE
 Fig. Where you find 1.0 is what we call the lotsize. It is advisable to use high leverage for bigger accounts. I prefer as 0.5 lot
size for $100 accounts. You can increase (right) or decrease (left).
Lot Size is the amount or quantity of a trade that you bought or sold. It’s sometimes called your Position size/Trade Size. In Forex
Market these currencies are bought and sold in Packs called LOT SIZES. That is what makes profit appreciable if not, your profit
would have been very small. But because you buy this currency in PACKS/BULK known as Lot Size, that's what brings us gain.
There are three types of LOT SIZES namely; STANDARD, MINI AND MICRO Lots.
STANDARD LOT, Contains 100,000 Units and is represented on MT4 by 1.0,
MINI LOT contains 10,000 units and is represented on the MT4 by 0.1 while
MICRO LOT contains 1,000 units and is represented by 0.01.
To enter it on the MT4 click a currency pair, the New order and you find in between positive and negative values at the top of
your screen.
Example, Let’s take three Traders A, B,C dealing on shoe business, for them to make profit, they can't just buy a single shoe from
the wholesale. They need to buy in bundles for a reasonable profit. Those bundles are what we call lot sizes.
Assume Trader A bought 100,000 bundles of Shoes and B bought 10,000 bundles while C only bought 1,000. It is obvious that
trader A would make more profit than B and C respectively. What determines the bundles of shoes bought is the capital
invested in the business. This is a typical illustration of Lot Size.
 
In the illustration above Trader a bought Standard Lot Size while Trader B bough MINI Lots and Trade C bought Micro Lot Size.
Standard Lot Size 1pip=$10, Mini Lot Size 1 pip =$1 and for Micro Lot Size, 1 pip=$0.1. If any of the Trade a currency pair and
each of them made 50 pips then just multiply by your lot size amount. So A will earn $500, B=$50 C=$5.
TRADING PLAN
 You need a SMART plan. SPECIFIC, ACHIEVABLE, REALISTIC, TIME BOUND.
Take this into consideration; There is a saying that when one fails to plan, you are planning to fail. So you need a trading plan
before you start trading in the Forex Market. Follow it judiciously and never twist it to suit your market condition bias.
1. I would earn 100% of my trading equity in 1 month.
2. I would set a near term goal and make at least 25% of my Trading Capital in 1 week and would plot this target daily.
3. If am behind my trading plan for the quarterly, i would take a brief break to re-evaluate my trading system.
4. I would not trade more than 4 loosing trades in a row, I would take a trading break of 2 days to re-access the market.
5. Anytime I take a break, I would close loosing trades, set protective stops on a winning trade and TP at reasonable targets;
should I be unavailable and Market gets to my target.
6. I would take 70% out of my account and invest in non FX related business and reinvest 30%.
7. I would record my daily trade activities in my trading log and review them weekly.
8. I would know my ratios and results and would work to improve on them at least 5% per week.
9. I would invest 4 hours a week to update my knowledge on Forex and learn new Trading strategies.
 
Please you can print and paste it beside you trading Table or desk.
For a little capital of $100- $200, you can make a target of $20 to $40 earning daily. If you can hit $100 a week then $400 a
month is ok.
Eliminate the factor of greed and earn exactly what you need for that day. Take the market slow and steady and you will
always be comfortable with trading
Note that even with a capital of $20 you can still make $15 daily While growing your capital
 COMMON MISTAKES BY TRADERS
Another important principle in life is to learn from people's mistake. Remember we talked of Fundamental Analysis which
we trade the Market using News. Never wait to learn from your mistakes. Those that have gone this part ahead of you
would tell you these are what people have done which didn't yield positive results and hence you should modify your own
actions.
• Not having a trading plan is a fatal mistake as well
• Don't demo trade or paper trade for too long it makes you own less emotions. Here you are dealing with real cash.
• Next is not using STOP LOSS. Always remember to put it in all your trades. Here it's technology protecting your
account.
• Always look at economic Calendars before beginning of every week.
• Never open many trades because you will not be able to monitor them. I call it greed. You can't grab all the pips in the
market. You may not go back with half the market volume of $5.3 Trillion liquid cap my friend. At least three Currency pairs
are ok at a time. To get News about the market, go to Forex Factory , Fxstreet, Investing or Daily Fx any you can get
important News releases for the week especially when you click on their economic Calendar.
Forex analysts come up with the same value to come up with what we call a consensus. This consensus is published in various
platforms before the main News is released by 8:30 am. EST(12:30 GMT). With the forecast, many traders will go straight with
the aim of making huge profits which is not good. Wait for the main News.
 RISK MANAGEMENT
It is composed of all these topics we have been teaching from Part 2. Lot Size, Trading Plan, Stop Loss, Greed Elimination
e.t.c...Because i told you that 1.0 Lot size gives $1/pip, you would see someone trying to use 1.0 Lot Size on a $100 or $200
account.
 
You cannot get rich overnight. That is what we call over trading in Forex. Stick to Lot Size that suits your account. $50 per day
is not bad for a starter, its at least $250 a week. It may still go to $70 and finally $100 a day.
If you set your Lot Size to 0.01, 1pip will be $0.1.
 
RISK MANAGEMENT GUIDE;
You are expected to choose a lot size depending on the amount you invested as below.
Balance.....Lot size:
$100-$590...0.01 (5 open trades=0.05)
$600-$990...0.02 (4 open trades=0.08)
$1000-$2000....0.02 (open trades=0.12-0.16)
$2001-3000...0.05-0.08 (4 open trades=0.36-0.4)
$3001-$6000...0.09-1.0 (4 open trades=0.6-2.0)
$7000-$10000 ...0.15-0.50(4 open trades=0.6-4.0)
$11000-$20000...1.0-2.0 (4 open trades=4.0-8.0)
$30000-$50000....3.0-5.0 (4 open trades=12.0-20.0)
$60000-$100000...6.0-10.0 (4 open trades=24.0-40.0)
 
Now you should know how to place your TP (TAKE PROFIT) and SL(STOP LOSS)
 
When you click a pair of currency, take New Order. You will find your lot size at the middle of -o.1 -0.1 0.1 +0.1 +0.1 Then 1 is
your lot and you can adjust it. Below it you find your STOP LOSS on your Left and TAKE PROFIT ON YOUR Right. Where we
have 0.00000 on both sides
 
Some terms;
Balance: It is the amount you deposit plus your profit.
Free Margin: Available funds to trade on an account. These funds are not being used as collateral in trades on the Forex
financial market. These funds can be used in any operation including their withdrawal or to open a new position. To calculate
Free margin= Equity-Margin
Forex margin level: is the percentage value based on the amount of accessible usable margin versus used margin. Thus is
the ratio of equity to margin and calculated as follows; Margin Level=(equity/used margin)*100.
 
 FOREX TRADING PART IV
Our today's lectures shall be forwarded under the following topics;
 HOW TO KNOW WHEN TO ACTUALLY BUY OR SELL,
 HOW TO GENERATE SIGNALS FOR YOURSELF,
 INDICATORS, (moving averages, stochastic, MACD, Bollinger bands, RSI, ADX, Parabolic SAR, ATR, Ichimoku),
 TIME FRAME ANALYSIS,
 SUPPORT AND RESISTANCE LEVEL,
 CANDLE STICK ANALYSIS,
 FIBONNACCI LEVELS,
 PIVOT LEVELS,
 ELLIOT WAVES AND FRACTALS,
 CHART PATTERNS
 
HOW TO KNOW WHEN TO ACTUALLY BUY AND SELL
Here we are going to use Fundamental Analysis to help us decide whether to buy or sell a specific currency pair. Pretend you
know what’s going on.
EURUSD here EUR is the Base currency and thus basis for buy/sell.
If you believe that the US economy will continue to weaken, which is bad for the US dollar, you would execute a buy EURUSD
order.
If you believe that the US economy is strong and the EUROS will weaken against the US dollars, you would execute a sell
EUR/USD order.
By doing so, you have sold euros in the expectation that they will fall versus the US dollar.
N/B: When currency weak buy when strong sell
In this example, the Japanese government is going to weaken the Yen in order to help its export industry, you would execute a
BUY USDJPY order. By doing so, you have bought US dollars in expectation that they will rise versus the Japanese Yen. But if you
believe that the Japanese investors are pulling money out of the US financial market and converting all their US dollars back to
Yen, this will hurt the US dollar. You would execute a SELL USDJPY order. By doing so you have sold US dollars in the expectation
that they will depreciate against the Japanese Yen.
HOW TO GENERATE SIGNALS FOR YOURSELF
Let’s say you believe that signals in the market are indicating that the GBP will go up against the USD, you open one standard lot
(100,000 units GBPUSD), buying here is with pounds.
Signals are given with entry levels because indicators are used to predict the market. There is a level when a price reaches those
indicators it will tell you that its a Buy or a Sell. So if it hasn't reached that entry point which will signify a Buy order or a Sell
order, it may reverse and when you execute it will go against you. So executing at entry point is important.
Executing after entry point however can mean less profit and in some cases it can also mean loss for you. The market can move
in seconds and reach your TP and reverse back and if you execute the trade it wouldn't reach your TP because it has hit the
target and reversed, you will therefore loose
Let's insert the Bollinger bands guys
Click any currency pair then click "f" at the top. Under main chart, click + then click Bollinger bands n click "done".
Under indicator window click + then click RELATIVE strength index and click "done" to save it. Then Send me your screenshots
now
Fig. The section above shows the three contours called the
Bollinger Bands. The single contour down is called the RSI that
determines the market trends. At 30, traders are ready to buy
and at 70 selling. It may go above 70 when influenced by
business news or below 30 as well.
Let’s learn something here that will greatly help our trading pattern. It is called Forex Scalping which is way of getting small
profits out of the markets as price is swinging. Many traders use this method to earn hundreds and thousands of dollars daily.
To scalp the market you have to monitor price movement from the charts and also use Technical indicators to analyses the
market.
Scalpers can enter a trade of 5-10 pips and maybe 20 pips profit. The idea is to get in the market and out with profit over a
short period of time. Some scalping trades last for 5, 15, 30 and at most an hour unless there's a market dormancy. Scalping is
generally a fast trade where we get in and out of the markets to get little profits.
 
With Technical indicators, you can predict price movement that is its either going to rise up or drop. Please use the EURUSD
pair and your time frame set at M5 which means 5 mins.
click anywhere on your candlesticks n select M5
click inside those candles
and send your timeframe
With the Bollinger Band indicators all the three in green, the one at the top is the Upper band and the one below is the Lower
Band.
 
The Upper band tells you two things Change it to H1 which means 1 hr Chart. Check at the graphs.
To change it, click anywhere on the chart and a pop up circle will appear and you can select the hour (time) you want. in
general;
1. When a price is below it, it can move up to that level meaning our market price can over time move up to
that level.
2. When a price reaches that level, it can pass it with a few pips upward in most cases not more than 10 pips
and the price will eventually drop.
It tells us the highest level a market can reach before it falls.
 
With the lower green band;
• It tells us the lowest level a market can reach.
• When the market price reaches that level it can pass with a few pips and eventually move up again.
No trader will tell you which one is the best. Only you can decide which one is the best for you. Some traders trade
on 5 minutes chart and trade 3-5 pips. So the best i can say is pending on the type of trade you want to execute and
the time frame.
So when the price hits the Lower Bollinger Band it can still drop a few pips and rise eventually. Now what we have to
do is to buy because a Bullish market can follow suit.
When it hits the upper line, it means the market will eventually retrace down which is a sell. It’s therefore a Bearish
signal. BULLISH, we Buy and BEARISH we Sell.
 
Now the middle line serves a midpoint or average market price for a particular moment and as the market is moving, the
average can change overtime as well. Note that Bollinger Band is good for predicting market prices especially for scalpers.
 
Now let me explain what to wait for before buying or selling when the market hits our lower or upper bands.
Open any pair and check at the RSI chart and you will notice that when you find any black candle almost going down from
another shows a sell signal till it hits the lower band. The next candle however was a white candle signifying a buy signal.
So its important we wait for a White candle which signifies a buy order before we execute.
Another sell signal works this way, if your white candle reaches the Upper band. I mean the green contour at the top, wait
for the black candle which will signify a sell order before we execute our trade.
White candle means the market is moving up, Bullish or buy signal. Black means the market is dropping, bearish or sell
signa
I want to talk on a situation whereby the market can decide to retrace after reaching our moving averages. It will reach the
upper or lower bands but in some cases it might retrace back at the moving averages instead of passing it. These are the
reasons;
1. News affects market prices. When countries are going into trades, when countries are releasing News on their
GDP, Foreign reserve and other Economic conditions, it affects the Forex Market. It can make a particular currency stronger
or weaker against the other. In situations where we are executing a buy signal and News about a currency broke out and
gives it more value, the Market will retrace back upon or before reaching the moving averages for a sell signal.
Forex Market is filled with market forces of traders who are constantly buying and selling. If many traders decide to continue
buying a particular currency pair when it is on a sell signal, the market will eventually change to a buy signal upon or before
reaching the moving average and vice versa. Ex In the RSI chart you will notice that the buy candle will start to increase as it
reach the moving average and finally change to sell as the black candle starts to drop. I mean around the moving average
contour. But if there is no News, or if the market is not affected by traders either buying or selling too much, the market will
perfectly move to the upper band and drop to the lower band.
RELATIVE STRENGTH INDEX
Relative Strength Index or RSI is a popular indicator developed by a technical analyst named J. Welles Wilder. RSI identifies
overbought and oversold conditions in the market.
It shows us the turning point in a particular market uptrend or downtrend. It shows us when the market reverses in the
opposite direction.
 
The RSI is calculated from 0-100. When it's at 30, the market is considered to be oversold and a possible trend reversal i.e it
means a buy signal will come next. When it is at 50, it is considered at its average
When it however reaches 70, it means the market is overbought and a possible trend reversal will come next i.e a sell signal
will follow suit.
When the market is around 50, it can move to overbought or move oversold.
 
However, a market can be struck by News and it can affect the price movement be it in overbought or oversold level. E.g in the
EURUSD pair, if it reaches the overbought level and News is released that the USD value has considerably lost value the price can
keep going up and will pass 70.
 
In the same way if it reaches and oversold level and a News report is released that USD has gained much over, it will keep going
down and pass the overbought level Candlesticks

CANDLESTICKS

Candlestick charts are a type of financial chart for tracking the movement of securities. They have their origins in the
centuries-old Japanese rice trade and have made their way into modern day price charting. Some investors find them
more visually appealing than the standard bar charts and the price actions easier to interpret. Over time, the candlesticks
group into recognizable patterns that investors can use to make buying and selling decisions.
1. The Hammer or the Inverted Hammer
The Hammer is a bullish reversal pattern, which signals that a stock is nearing bottom in a downtrend. The body of
the candle is short with a longer lower shadow which is a sign of sellers driving prices lower during the trading
session, only to be followed by strong buying pressure to end the session on a higher close.
Before we jump in on the bullish reversal action, however, we must confirm the upward trend by watching it
closely for the next few days. The reversal must also be validated through the rise in the trading volume.
 
The Inverted Hammer also forms in a downtrend and represents a likely trend reversal or support. It’s identical to
the Hammer except for the longer upper shadow, which indicates buying pressure after the opening price, followed
by considerable selling pressure, which however wasn’t enough to bring the price down below its opening value.
Again, bullish confirmation is required, and it can come in the form of a long hollow candlestick or a gap up,
accompanied by a heavy trading volume.
 
Go through carefully let me explain
2.The Bullish Engulfing
The Bullish Engulfing pattern is a two-candle reversal pattern. The second candle completely ‘engulfs’
the real body of the first one, without regard to the length of the tail shadows. The Bullish Engulfing
pattern appears in a downtrend and is a combination of one dark candle followed by a larger hollow
candle. On the second day of the pattern, price opens lower than the previous low, yet buying
pressure pushes the price up to a higher level than the previous high, culminating in an obvious win
for the buyers. It is advisable to enter a long position when the price moves higher than the height of
the second engulfing candle—in other words when the downtrend reversal is confirmed.
3.The Piercing Line
Similar to the engulfing pattern, the Piercing Line is a two-candle bullish reversal pattern, also occurring in
downtrends. The first long black candle is followed by a white candle that opens lower than the previous close.
Soon thereafter, the buying pressure pushes the price up halfway or more (preferably two-thirds of the way) into
the real body of the black candle.
4. The Morning Star
As the name indicates, the Morning Star is a sign of hope and a new beginning in a gloomy downtrend. The pattern consists of
three candles: one short-bodied candle (called a doji or a spinning top) between a preceding long black candle and a succeeding
long white one. The color of the real body of the short candle can be either white or black, and there is no overlap between its
body and that of the black candle before. It shows that the selling pressure that was there the day before is now subsiding. The
third white candle overlaps with the body of the black candle and shows a renewed buyer pressure and a start of a bullish
reversal, especially if confirmed by the higher volume.
5. Dodji
Although the doji has a simple shape, it signifies an important change in the market: a moment of indecision. When you see a doji
candlestick pattern, you know that the market closed very near to where it opened, which is why there is not a real body.
Indecision reigns, as neither the bears nor the bulls are in control. A “tug-of-war” is occurring, during which neither party is
dominant. Although the price may have fluctuated throughout the day, it was driven back to its original, opening price. This
moment of indecision, illustrated by the doji, often precedes a reversal trend. Depending on how the market progresses, the doji
can be viewed as a bullish or bearish reversal candlestick.

The Bottom Line

Investors should use candlestick charts like any other technical analysis tool (i.e., to study the psychology of market participants in
the context of stock trading). They provide an extra layer of analysis on top of the fundamental analysis that forms the basis for
trading decisions. We looked at five of the more popular candlestick chart patterns that signal buying opportunities. They can
help identify a change in trader sentiment where buyer pressure overcomes seller pressure. Such a downtrend reversal can be
accompanied by a potential for long gains. That said, the patterns themselves do not guarantee that the trend will reverse.
Investors should always confirm reversal by the subsequent price action before initiating a trade.
While there are some ways to predict markets, technical analysis is not always a perfect indication of performance.
RSI is similar to Stochastic in that it identifies overbought and oversold conditions in the market
It is also scaled from 0 to 100.
Typically, readings of 30 or lower indicate oversold market conditions and an increase in the possibility of price strengthening
(going up).
Some traders interpret that an oversold currency pair is an indication that the falling trend is likely to reverse, which means it’s
an opportunity to buy.
Readings of 70 or higher indicate overbought conditions and an increase in the possibility of price weakening (going down).
When the RSI goes above 70 we say the market has overbought and 30 oversold
ome traders interpret that an overbought currency pair is an indication that the rising trend is likely to reverse, which means it’s an opportunity to sel
determines market trends

In addition to the overbought and oversold indicators mentioned above, traders who use the Relative Strength
Index (RSI) indicator also look for centerline crossovers.
A movement from below the centerline (50) to above indicates a rising trend.
A rising centerline crossover occurs when the RSI value crosses ABOVE the 50 line on the scale, moving towards the
70 line. This indicates the market trend is increasing in strength, and is seen as a bullish signal until the RSI
approaches the 70 line.
A movement from above the centerline (50) to below indicates a falling trend.
A falling centerline crossover occurs when the RSI value crosses BELOW the 50 line on the scale, moving towards
the 30 line. This indicates the market trend is weakening in strength, and is seen as a bearish signal until the RSI
approaches the 30 line.
As the band is moving it's value is also shown there

How to Trade Using RSI

We can use it to pick potential tops and bottoms depending on whether the market is overbought or oversold.
Below is a 4-hour chart of EUR/USD
 N/B: Who can determine the last candle at the bottom
•The answer is : Piercing candle
EUR/USD had been dropping the week, falling about 400 pips over the course of two weeks.
On June 7, it was already trading below the 1.2000 handle.
However, RSI dropped below 30, signaling that there might be no more sellers left in the market and that the move could be over.
1.2000 is the price to your right
(Check the over sold from the arrow pointing downward, Price then reversed and headed back up over the next couple of weeks.)
Determining the Trend using RSI
TREND is simply the direction markets take; Like up or Down.

At the beginning of the chart above, we can see that a possible downtrend was forming.
To avoid fake outs, we can wait for RSI to cross below 50 to confirm our trend.
Sure enough, as RSI passes below 50, it is a good confirmation that a downtrend has actually formed.
Resistance n support strategy
Support and resistance is one of the most widely used concepts in forex trading.
 Strangely enough, everyone seems to have their own idea on how you should measure forex support and resistance.

If a price (candlestick) is at resistance it will drop to support n you will also estimate the number of pips you can sell.
If u place a sell, as they start to drop, u start making profit.
At support, it may rise to the resistance n you have to buy
At resistance and at support I buy.
Always look at the values to your right n know the number of pips to buy or sell
From the past resistance and support, u can know the number of pips to buy or sell
Let me make an example here with a live diagram:
Look at how I have mapped out resistance n support
 Hope its clear guys?
At support we buy n at resistance we sell

Here your first resistance was at 1.1051 and it supported at 1.0885

Since its forming a ladder, next support end at 1.0989
When the forex market moves up and then pulls back, the highest point reached before it pulled back is now resistance
As the market continues up again, the lowest point reached before it started back is now support
In this way, resistance and support are continually formed as the forex market oscillates over time. The reverse is true for the downtrend.
Plotting Resistance n support
With candlestick charts, these “tests” of support and resistance are usually represented by the candlestick shadows.
So how do we know whether resistance and support has broken There is no definite answer to this question. Some argue that a support or
resistance level is broken if the market can actually close past that level. However, you will find that this is not always the case.
Let’s take our same example from above and see what happened when the price actually closed past the 1.4700 support level.
We say support was broken here at 1.4700 but it maintained it normal movement
When it pass that line of support we say that it has broken E.g if it was at 1.4700 n rose to 1.4730 there is a possibility it will
go back to a support of 14700 or slightly above or below it.
Always watch your resistance n Support very well. Note that the pips r on your right. If at the top u should know where to sell
n stop. The reverse for a buy.
In this case, the price had closed below the 1.4700 support level but ended up rising back up above it.
If you had believed that this was a real breakout and sold this pair, you would’ve been seriously hurtin’!
Looking at the chart now, you can visually see and come to the conclusion that the support was not actually broken; it is still
very much intact and now even stronger.
To help you filter out these false breakouts, you should think of support and resistance more of as “zones” rather than
concrete numbers.
One way to help you find these zones is to plot support and resistance on a line chart rather than a candlestick chart. The
reason is that line charts only show you the closing price while candlesticks add the extreme highs and lows to the picture.
These highs and lows can be misleading because often times they are just the “knee-jerk” reactions of the market.
It’s like when someone is doing something really strange, but when asked about it, he or she simply replies, “Sorry, it’s just a
reflex.”
When plotting support and resistance, you don’t want the reflexes of the market. You only want to plot its intentional
movements.
Looking at the line chart, you want to plot your support and resistance lines around areas where you can see the price
forming several peaks or valleys.
Other interesting tidbits about forex support and resistance:
When the price passes through resistance, that resistance could potentially become support.
Hope this is clear guys
Resistance at certain points become support. And support acn bcome resistance too
The more often price tests a level of resistance or support without breaking it, the stronger the area of resistance or support is.
• When a support or resistance level breaks, the strength of the follow-through move depends on how strongly the
broken support or resistance had been holding.

With a little practice, you’ll be able to spot potential forex support and resistance areas easily.
Try to master and identify them on your MT4