A Newbie Guide to FOREX

7/29/2019 A Newbie Guide to FOREX

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ACFX eBook Guide

A Newbie Guide to Forex

www.ACFX.com

AtlasCapital Financial Services

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Table of ContentsRisk Disclaimer ............................................................................................................................................................. .....................................3

Introduction ................................................................................................................................................................... .....................................4

1. Shop around before choosing your broker ....................................................................................................................5

2. Match your risk with your account size ...........................................................................................................................7

3. Dont get married with your losses ....................................................................................................................................8

4. Treat your losses as a price of learning how to trade ................................................................................................9

5. Always use hard stops and honor them when touched ......................................................................................... 10

6. Have a Trading Plan ............................................................................................................................................................... 12

7. Perfection through repetition ........................................................................................................................................... 13

8. Dont get emotional............................................................................................................................................................ .... 14

Conclusion ...................................................................................................................................................................... .................................. 15

About AtlasCapital .............................................................................................. .......................................................................................... 16

Whats Next? .................................................................................................................................................................. .................................. 17


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Risk Disclaimer

Users of ACFX.COM website and BLOG and any affiliated website note the content of the above

analysis or any other information within the website do not at any time provide financial advice.The information is based on historical analysis and for educational purposes only.

We recommend readers not to make any investment decision of any sort on the basis of theinformation above unless prior professional consultation is sought.

Trading may not be suitable for all users of this website. Trading CFDs and Forex (foreignexchange) on margin carries a high level of risk, and may not be suitable for all investors.

The high degree of leverage can work against you as well as for you. Investors should ensure theyfully understand the risks associated with leveraged CFD and FX trading before deciding to trade.

Investors should carefully evaluate whether their financial situation is appropriate for suchtransactions.


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Introduction

For many, the financial markets are a complete mystery and trying to understand how theyfunction is made even more confusing by the plethora of different opinions and in the majority ofcases made by so called misinformed experts that one will find in the financial media and internet.

This e-book has been written for those who are interested in participating in the financial marketsbut do not know how to go about it.

We are not going to sugar coat it for you. Trading is not easy and even experienced trader has baddays. Beginners through a combination of lack of discipline, inexperience and insufficientknowledge of the product they are trading get beaten up by the markets to the point where they arespent financially and psychologically.

The newbie will blame the market, for their woes and become a statistic of another failed trader.With patience and by applying lots of discipline and through practice, trading can be a rewardingand enjoyable experience.

This e-book will not tell you how to make millions but we hope will help you stay in the game longenough to make trading a success for you.


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Shop around before choosing your broker

All the information you need is at your finger tips

As a retail investor, the choice of which

Forex Broker to use has never been better.As with financial markets, over supply cancause a decline in prices, the sheer volume ofForex Brokers offering their service hasdriven down the spreads available. Thespread is a cost to the retail investor as it isthe difference between the cost of purchaseand cost of sale of a given product orcurrency pair.

Fortunately, ACFX offers our clients some of the most competitive fixed spreads on the market andour clients take advantage of this by being able to profit much easier and quicker when comparedto investors who use Forex Brokers who offer much wider spreads.

ACFX offers tight and competitive fixed spreads. There are three account types designed to suitevery kind of investor or trader. In order to make it simple and easy, ACFX provides 5 decimalplaces fixed spreads on the Classic and VIP accounts. In order to cater for professional andinstitutional investors, ACFX also provides an STP account with variable 5 decimal places spread.The table below illustrates the spreads on each account type:

For Classic & VIP Accounts

Classic VIP

EURUSD 2.2 1.5

GBPUSD 2.5 1.8

USDJPY 2.2 1.5

USDCHF 2.2 1.5

AUDUSD 2.7 2

USDCAD 2.7 2


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For STP Accounts

Product Spreads

Spot Forex Variable from 0.7 pip

Crude and Brent Variable from 5 cents

Gold Variable from 60 cents

Silver Variable from 3 cents

The competitive pricing has not only forced down the spreads but has also forced down the level ofovernight financing.

Intraday traders who do not hold positions overnight need not worry about overnight financing.However, for those traders who hold positions overnight, the cost of financing has to be considered.

What exactly is overnight financing?To put it simply, it is a minor interest payment charged to your account when for instance youdecide not to close a position opened today.

So why are you charged for holding a position overnight?

It is to do with something called Currency Swaps and the time value of money.

The borrowing of money has a cost which is called interest.

You also probably know the rates of interest for each currency can vary. For instance the cost at themoment for borrowing Euros is more expensive then borrowing US$.

So how does all this I hear you say affectme?To put it simply the cost of holding position in certain currencies could benefit you while holdingothers could mean you incur a cost. For this reason, Forex Brokers can charge you for holdingpositions overnight.

So what is the mechanics of all this? How does it work?

For example, you are an intraday trader who is holding a position where you have sold USD andbought JPY.

Your position is going well and you decide to hold it overnight. You hold account in Euros and forthis reason your Forex Broker has to borrow the JPY from somewhere.

The swap is the difference the interest you receive for holding JPY and being short USD.

Sometimes the swap is in your favor and sometimes it is not.


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Match your risk with your account sizeMany newbies to trading approach the

business as a quick get rich schemebelieving that a relatively small accountsize can be grown rapidly and with ease.Furthermore, leverage is a double edgesword which invariable destroysundercapitalized accounts.

So how much do you need to start withas a newbie trader? This is actually atricky question but the generallyaccepted answer is enough fundingallocated to your account which will

allow you to obtain your goals.Before you right click, consider the risk you are taking

These goals should be both financial and educational. These being not only enough funds for you tosurvive losses that you will suffer which are referred to as drawdowns but also enough funds for

you to stay in the game during the steep learning curve.Back to the question, the account size should reflect the risk you take on when you take a trade. Theaccepted level of risk is between 1 to 2% per trade. This may sound very low to many new totrading but if you marry the low levels of risk with a risk to reward ratio of at least 1 to 2, adisciplined trader can quickly grow an account. With a small account size of say euro 1,000.00 your

stop level and leverage used may simple mean it is difficult to trade due to the level of risk.For example

A 50 pip stop on a EUR 1,000.00 account where 1 lot is traded you will risk you around EUR 385.00or 39% of your account. The same position taken on a EUR 20,000.00 account risk will drop to lessthan 2%. This does not mean you need to wait until you have EUR 20,000 to trade as ACFX offersour clients the ability to trade micro lots.

Traders who fail to be sufficiently capitalized risk ruin by trading with excessive risk. ACFXunderstands this and is proud to announce our new micro lot campaign specifically launched forboth newbies and small account size traders. We will explain the campaign at the end of theeducational section of this webinar.


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Dont getmarried to your lossesIsnt easy to look at a chart and say, I would have bought here and sold there. It is a little harder

when one is asked, what you would do next without knowing what is to the left of the right edge ofyour monitor.

So why is it that when you are in a position and the market is pointing in your direction for a largehome run trade, you close the trade at first base for a tiny profit? Also why is it when you buy theeuro because you know for sure that the market will go higher that the market crashes against youand the trade turns into a buy and hope position?

You are not tied to your trade

It is probably fairly obvious that cutting profits early and running your losses will have a bad effecton your account but unfortunately ones ego gets in the way of too many newbies who think theyknow more than the market does.

In the previous chapter we talked about the level of risk one should take on when trading and therisk to reward ratio.

Applying a 1 to 2% risk profile with at least a 1 to 2 risk to reward ratio will ensure that badpsychology does not take over your trading.

Trading is not about being right all the time but managing your risk in a way that you lose small andwin larger.


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Treat your losses as a price of learning how totradeHowever hard you have worked to perfect your strategy or worked on your discipline and trademanagement, every trader is going to lose occasionally on individual trades.

For many newbie and experienced traders who have suffered a loss, bad psychology tells them todouble up with a with an aim to recoup their losses or alternatively are left so fatigued by their lasttrading experience that they either reduce their size or stop clicking the mouse when the next goodtrade comes along.

It is important that traders work hard on their strategy and know it inside out. By knowing yourstrategy intimately you are able with clarity and impartiality to assess if a loss is to be expected aspart of the process or if the strategy you have chosen to trade needs further work.

Every trade needs to be taken on its own merits but at the same time be considered as part of thebigger picture. This bigger picture is the strategy and its expected forward looking performance.

They say we learn from our mistakes.Thats why Im deliberately making as many as possible. Soon I will be a genius.


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Always use hard stops and honor them whentouched

The use of stops is not only essential ifa trader wants to maintain theirfinancial well being but whenincorporated within an allencompassing trading strategy willgive a trader an edge over traders whouse little or no money managementstrategies.

If the reason you entered a trade is no longer valid then cut it

All professional traders must consider four factors before placing a position.

1. Through a logical and detailed market analysis gauge a market bias where a trader will wishto participate.

2. Identify a point of entry where a position will be placed.3. Have an exit strategy where profits will be taken and ideally when markets trend strongly in

your favor.4. Identify a price level where when breached or touched the trader must close a losing

position.

Losses do and will occur. A traders analysis will never be 100% correct all the time. Therefore theability to cut losses at appropriate levels is essential if any strategy is to have an edge. However,more often than not, the very act of taking a position will put you in a loss before the market turnsin your direction. A trader needs to allow for this noise around the entry. Stops placed too close tothe entry or at price level that is likely to be breached will most likely take a trader out of theposition before it has time to turn profitable.

As a guide a trader should risk no more than 2% of their account on any one trade. This percentagemust of course have some relevance to the product they are trading and volatility at the time youplace the order.

If for instance you are a swing trader, your strategy may be that you are a buyer of weakness duringperiods of strong uptrends. The rule of thumb when swing trading is that you place your stopbeneath the previous support level. Therefore a 2% stop strategy needs to allow for this as part of atraders overall strategy.

Alternatively, during times of market news, increased volatility may mean that a 2% stop isimpractical. A trader has to take a decision of decreasing their lot size or decide not to trade duringthese periods.


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Placing stops does not only relate to protecting a traders capital base but can be used as part of anexit strategy which allows a trader to protect their profits. Planning ones exit prior to trading isalways easier than trying to decide if you should hold on for more profits or close now.

We have emphasized that placing stops is an important part of trading. Therefore understandingthe mechanics of how they are actually placed on the platform is a must. The MetaTrader4 platformis simple to use and stop placement is relatively easy. The ACFX Dealing Department is available towalk through this with clients if they so require.


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Have a trading planTrading should be treated as a business and as such should be approached in a serious and

disciplined manner. Therefore to achieve your trading business goals, you need to have a wellthought out and clear trading business plan.

Your trading business plan should be short as a long trading plan although very precise anddetailed may become unusable when applied to the real market.

Plan your next move

A trading plan can be based on technical and fundamental analysis or a combination of both.Although some traders are successful when trading with gut feelings, it is still important to try toquantify how one comes to that decision.

In my view, the best trading plans should lend themselves to mechanical back testing with a goal toturn them into a simple step by step strategy or a well tested and robust grey or black box.

Trading does require discipline but that this does not mean that you do not test out new ideas orlose your creative edge. ACFX encourages traders to try out their new ideas on the demo platformwhere positions can be taken with no risk.


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Perfection through repetitionTrading has been described by many as a financial art form and

as such lends itself to those with a natural ability to excel. Maybethis is true and some persons are by their personality, intellector conditioning through their upbringing has a natural ability tobe successful in trading.

Natural ability may play a factor but was much more importantis the discipline to study charts for hours on end and throughstudy, research and hard work find strategies that work for youand again through self discipline and dedication perfect thestrategy. The research and hard work in itself will stir onescreative juices and expand your mind and problem solvingability.

Furthermore, you can test to destruction your creative ideas on ademo account until you have perfected the set up or trade it as alive micro lot with minimal exposure but with a good emotionaledge to the entry.

Even Messi practices


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Dont get emotionalWe have mentioned bad psychology earlier in this e-book. Bad psychology and your emotions are

the two main reasons why you may fail as a trader. If you are trading funds that you cannot affordto lose be it life savings or money you have borrowed, you are instantly at a disadvantage as everytick or pip that goes against you will make you worry and second guess your trading decision.

Making money is a serious business

Furthermore, although trading on a demo account and trading with real funds should mechanicallybe no different, however actually making the transition emotionally can be a huge barrier for anewbie trader. This again is down to the emotions.

The very action of clicking the button on a live account and watching your balance rise and fall canplay havoc with your emotions. Only by mastering your emotions do you stand a chance of stickingto your trading plan.


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In conclusionSo you have read the e-book but you are probably not ready to take the market by the scruff of the

neck just yet. However, what you have read should have given you a different view of how to tacklethe exciting space that is trading.

The e-book has covered areas such as being a disciplined and professional, what approach you needto have to be profitable and the best ways to reduce risk. Furthermore, we have discussed thebenefits of low spreads, sufficient account capitalization, good practice in risk management and theuse of stops and trade management.

What is probably one of the key points to take away from this is that trading is a personal challenge.You too can be successful but this will only be from your own efforts. One should not rely on puntsand tip sheets from other commentators.

This e-book is a toe in the water for a newbie trader. ACFX is happy to announce that it will launch a

comprehensive education offering to all our clients. We want our clients to be successful and willtherefore offer them the tools to do this such as MetaTrader 4 platform and a too the pointeducation Knowledge Base.

Furthermore, our inexperienced clients can practice their technique and strategies by registeringfor a demo account and down loading our free to use MetaTrader 4 software. Our clients can alsotake advantage of our generous cash bonuses and opt to trade with micro lots as trading with realfunds will give you an edge simulated trading cannot give you.


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About Atlas CapitalAtlasCapital was incorporated in October 2007 and is headquartered in the centre of Limassol,

Cyprus. The Company is a member of AtlasGroup, one of the most renowned businessconglomerates in southeast Europe. AtlasGroup has twenty years of experience in investments andcommercial banking, as well as real estate investments.

Based in Cyprus and regulated by the Cyprus Securities and Exchange Commission we are fullycompliant with the EU - MiFID Directive (Markets in Financial Instruments Directive).

In AtlasCapital we aspire to fulfill our commitment to excellence offering our clients an array ofservices and innovative investment opportunities. We are pioneers in the field of GHG emissionstrading in southeast Europe. AtlasCapital is the only investment firm in Greece and Cyprus that hasfull membership on BlueNext, the Paris-based Environmental Exchange that currently serves as thebiggest platform for trading spot EUAs worldwide.

In addition, AtlasCapital provides traditional services like global custodianship to investmentbanks, brokers-dealers, institutional investors, mutual funds, corporate entities and privateinvestors.

In January 2010, Atlas Capital FX (ACFX) - a trade name of Atlas Capital Financial services (ACFS) -was formed in order to provide retail investors access to the currency, commodities, energies andequities markets.


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Now you want to trade. What do you do next?

Opening an account has never been easier. Just follow the simple steps listed below.

1. Go toACFX.comand click on Start Trading, Register for live account or simply just click onthe below tab.

2. Fill in the LiveRegistration form.

3. Carefully read the terms and conditions and click on the tabs agreeing your acceptance.4. Finally press the Submit Details tab.5. You will be contacted promptly by one of our dedicated Sales Managers.
http://www.acfx.com/en/http://www.acfx.com/en/http://www.acfx.com/en/http://acfx.com/http://www.acfx.com/en/

A Newbie Guide to FOREX

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