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Forex FAQ - The Complete ForexBeginners Guide

Short Answers To Most CommonForex Questions

By Dave Hughe

PlainForexTrading.com

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Text copyright © 2015 PlainForexTrading.comAll Rights Reserved

No part of this publication may be reproduced, stored in a retrieval system, ortransmitted in any form or by any means, electronic, mechanical, photocopying,recording, scanning, screen capturing or otherwise, without prior written consent of thepublisher. Limit of Liability/Disclaimer of Warranty:While the publisher and author have used their best efforts in preparing this book, theymake no representation or warranties with respect of accuracy or completeness of thecontents of this book and specifically disclaim any implied warranties ofmerchantability or fitness for a particular purpose. No warranty may be created orextended by sales representatives or written sales materials. The advice containedherein may not be suitable for your situation. You should consult with a professionalwhere appropriate. Neither the publisher nor author shall be liable for any loss of profitor any other commercial damages, including but not limited to special, incidental,consequential, or other damages.

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Table of ContentsForeword

What Is ForexWhat Is Forex?Where Is Forex Located?How Big Is Forex?When Is Forex Open?How Is Forex Regulated?Who Are The Main Participants In Forex?How Is Forex Different From Other Markets?

How Does It Work?What Currencies Are Traded In Forex?What Is An Exchange Rate?How To Read The Forex Ticker Tape On Bloomberg?What Is A Spread?

Where Is The Money?How Do You Make Money In Forex?What Are The Long and Short Positions?What Are Lot, Mini-Lot, Micro-Lot, Nano-Lot?What Is A Pip?What Is The Value Of A Pip?

How To Trade Forex?Why Trade Forex?Is Trading Forex Riskier Than Trading Stocks or Futures?Where Can I Trade Forex?How Much Money Do I Need To Start Trading Forex?Can I Lose More Money Than I Have In My Account?

When To Trade Forex?What Are Forex Trading Sessions?

The Asian trading session:The European trading session:The North American trading session:

What Is The Prime Time In Forex?What Is The Best Time To Trade Forex?

How To Analyze Forex?What Types Of Forex Analysis Are There?What is Fundamental Analyses In Forex?What is Technical Analyses In Forex?

Do You Need A Plan?What Is A Trading Strategy?What Is A Trading System?What Is The Best Forex Trading Strategy?What Is Money Management In Forex Trading?What Is A Trading Plan?What Is Scalping In Forex?

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What Is Momentum Trading?What Is Swing Trading?What Is News Trading?

How To Place Orders In Forex?What Types Of Orders Are Used In Forex?What Is A Stop-Loss Order?What Is A Take Profit Order?What Is Slippage?

How To Choose A Broker?What Do Forex Brokers Do?What Types Of Forex Brokers Are There?How To Choose Forex Broker?How To Calculate Margin?

How To Learn Forex Trading?What Is The Best Way To Learn Forex?Can I Learn Forex For Free?What Is A Forex Signal?What Is A Trade Copier?Can I Learn Forex By Using Forex Signals or Trade Copiers?

How To Succeed In Forex Trading?What Is Success In Trading?How To Succeed In Forex?What Things To Be Careful About When Trading Forex?

Afterword

About the AuthorContacts

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ForewordForex is gaining popularity and growing exponentially every day. At

PlainForexTrading.com we receive many questions from people who hear about thisfascinating market and would like to know more.

This e-book is a collection of questions from complete novices accompanied byour short answers. It is intended to save you hours of searching the web and presentsanswers to all basic questions in one place.

Also, visit our FREE Forex RESOURCES page for more info at

http://plainforextrading.com/FreeResources

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What Is ForexWhat Is Forex?

The Foreign Exchange Market (Forex, FX, Currencies Market) is a globalmarket for trading currencies. The foreign exchange market determines the relativevalues of different currencies.

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Where Is Forex Located?Unlike stocks and commodities markets, Forex is a completely decentralized

market. There is no central location and there are no formal exchanges wheretransactions take place. Practically all Forex trading is done “over-the-counter”electronically, by telephone or in person.

Forex is a general term combining all worldwide financial institutions andorganizations of all sizes into a single market place.

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How Big Is Forex?The foreign exchange market is the most liquid financial market in the world.

According to the Bank of International Settlements, trading in foreign exchange marketsaveraged $5.3 trillion per day in April 2013. This is up from $4.0 trillion in April 2010and $3.3 trillion in April 2007.

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When Is Forex Open?Forex is the only financial market open 24 hours 5 days a week.

The Forex business week starts on Sunday at 5:00 p.m. Eastern Standard Timewith the opening of financial centers in Wellington, New Zealand and closes on Fridayat 4:00 p.m. Eastern Standard Time with the closing of financial centers in New York,U.S.A.

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How Is Forex Regulated?Unlike the securities and futures markets, the foreign exchange market is not

controlled by any central governing body. There are no clearing houses and arbitrationpanels. All members trade with each other based on credit agreements.

At the same time, the reputable retail Forex dealers and brokers are licensed andregulated as providers of financial services in countries where they operate. Thefollowing is the list of countries and their regulatory bodies:

U.S.A.: National Futures Association (NFA) and Commodity FuturesTrading Commission (CFTC)Canada: Investment Industry Regulatory Organization of Canada (IIROC)and Canadian Investor Protection Fund (CIPF)United Kingdom: Financial Conduct Authority (FCA) and PrudentialRegulation Authority (PRA)Australia: Australian Securities and Investment Commission (ASIC)Germany: Bundesanstalt für Finanzdienstleistungsaufsicht (BaFIN)France: Autorité des Marchés Financiers (AMF)

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Who Are The Main Participants In Forex?The foreign exchange market is divided into levels of access based on sizes of

transactions. At the top is the interbank market comprised of the large commercial banksand commercial organizations, followed by smaller banks, followed by large multi-national corporations, hedge funds, and all the way down to the smallest retailers.

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How Is Forex Different From Other Markets?The only financial market open 24 hours 5 days a week.

The most liquid market in the world averaging over $5 trillion perday(see also How Big Is Forex? )

Low transaction costs – most brokers include their commissions in thespread. There are no clearing fees, no exchange fees, and nogovernment fees

High leverage and fractional lot trading effectively eliminate barriersto entry. One can start trading Forex with as little as $25(seealso What Is A Lot, Mini-Lot, Micro-Lot, Nano-Lot? ).

There are no margin calls in Forex unlike in stocks and futuresmarkets.

Selling short in Forex is just as easy as buying long. There is no uptickrule such as in stocks trading.

There are no limits on the size of your position unlike in the futuresmarkets.

Due to the 24-hour trading there are rarely any gaps in prices exceptover the weekend.

The enormous size of Forex makes it impossible to manipulate.

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How Does It Work?What Currencies Are Traded In Forex?

All currencies in Forex are traded in pairs. Each pair’s name is an abbreviationof the names of its currencies. Some of the popular pairs were given nicknames bytraders.

The most trading activity is concentrated in 7 currency pairs, which are calledthe Majors. All of these pairs include the US dollar. They are:

EUR/USD - Euro versus US dollar or the number of USdollars for one Euro (nicknames: Euro, Fiber)

GBP/USD – British Pound versus US dollar or the numberof US dollars for one British pound sterling (nicknames: Pound,Cable, Sterling)

USD/JPY - US dollar versus Japanese yen or the number ofJapanese yens for one US dollar (nicknames: Yen, Dollar-yen,Ninja)

USD/CHF - US dollar versus Swiss franc or the number ofSwiss francs for one US dollar (nicknames: Swissie, Dollar-franc).CHF stands for Confederation Helvetia franc.

USD/CAD - US dollar versus Canadian dollar or thenumber of Canadian dollars for one US dollar (nicknames: Loonie,Canuck)

AUD/USD - Australian dollar versus US dollar or thenumber of US dollars for one Australian dollar (nicknames: Aussie,Oz)

NZD/USD - New Zealand dollar versus US dollar or thenumber of US dollars for one New Zealand dollar (nickname: Kiwi)

The last three pairs are also called commodity pairs because Canada, Australiaand New Zealand are rich on natural resources.

There are currency pairs that do not include the US dollar. They are calledCrosses. The most popular of them are:

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EUR/JPY - Euro versus Japanese yen or the number ofJapanese yen for one euro (nickname: Yuppi)

EUR/GBP – Euro versus British pound or the number ofBritish pounds sterling for one euro (nicknames: Euro-pound, Euro-sterling, Chunnel)

EUR/CHF – Euro versus Swiss franc or the number ofSwiss francs for one euro (nicknames: Euro-swissie)

GBP/JPY – British pound versus Japanese yen or thenumber of Japanese yen for one pound (nickname: Guppy).

The list goes on.

There are also so-called Exotics such as USD/MXN – US dollar versusMexican Peso or USDPLN – US dollar versus Polish Zloty

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What Is An Exchange Rate?An exchange rate is the value of one currency converted into another.

In an exchange rate, there are always two components: a base currency and acounter currency also called a quote currency.

An exchange rate can be quoted directly, when the foreign currency is the basecurrency and the domestic currency is the counter currency and indirectly, when thedomestic currency is the base currency and the foreign currency is the counter currency.

For example, a direct quotation for the US dollar in Canada would be US$1 =CAN$1.1293. In this quotation, the US dollar is the base currency and the Canadiandollar is the counter currency.

The price of the pair states how much the first currency is worth in the secondcurrency denomination. For example, if the price for EUR/USD is 1.3500, this meansthat one Euro is currently worth US$1.35.

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How To Read The Forex Ticker Tape On Bloomberg?USD - JPY 106.95 ↑ 0.065

The above means that the value of one US dollar has increased to 106.95Japanese yens. The price change is +0.065 yens.

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What Is A Spread?Just like in many other markets, currency pairs in Forex are quoted as two

prices: Bid and Ask.

The Bid is the price at which someone is willing to buy the pair and the Ask isthe price at which someone is willing to sell the pair. Therefore traders always buy atthe Ask price and sell at the Bid price.

The difference between the Bid and the Ask prices is called the Spread. Thesizes of spreads differ between brokers and currency pairs.

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Where Is The Money?How Do You Make Money In Forex?

Just like in other financial markets, you profit in Forex by buying low and sellinghigh or by selling high and buying low.

Your profit is the difference between the purchase price and the sale pricemultiplied by the number of lots traded (seealso What Is A Lot, Mini-Lot, Micro-Lot,Nano-Lot? ).

For example, if you buy one standard lot of EUR/USD for 1.1600 and sell it for1.1700, your profit is 1.1700 – 1.1600 = 0.0100 or 100 pips.

The pip value of one standard lot of EUR/USD is $10. Therefore, your profit is100 pips x $10 = $1,000 (see also What Is The Value Of A Pip? )

Selling in Forex is very easy. You don’t have to own or borrow the currencypair. You can just sell it and profit from the price decline. For example, if you sell onelot of EUR/USD for 1.1600 and the price drops to 1.1500, you will profit:

1.1600 – 1.1500 = 0.0100 * 100,000 = $1,000

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What Are The Long and Short Positions?Buying a currency pair in anticipation of the price increase is also called

opening a long position or buying long.

Selling a currency pair in anticipation of the price decrease is also calledopening a short position or selling short (shorting).See also How Do You Make MoneyIn Forex?

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What Are Lot, Mini-Lot, Micro-Lot, Nano-Lot?All currency pairs in retail Forex are traded in lots. Each standard lot is worth

$100,000 USD of whatever currency is being traded.

Therefore, when trading the Canadian dollar, the Euro, or any other currency,you would be trading $100,000 USD worth of that currency. The actual amount of thatcurrency will depend on its current price in USD.

Most retail brokers allow trading in tenths of a standard lot, such as 0.1 lot alsocalled a mini-lot, 0.01 lot or micro-lot and even 0.001 lot or nano-lot.

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What Is A Pip?A PIP or Percentage in Point is the smallest unit of price change for a currency

pair.

The easiest way to calculate a pip is to ignore the decimal point and to count thefifth digit starting from the left. Therefore, for the majority of the pairs one pip equals to0.0001.

Exceptions to this rule are currency pairs priced between 10 and 100. In thosecases the pip is the fourth digit from the far left or 00.01

Nowadays brokers quote prices to the fifth decimal digit, which equals to theone tenths of a pip. Therefore one pip looks like this now: 0.00010

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What Is The Value Of A Pip?To calculate the value of one pip, you need to divide one pip in decimal form

(i.e. 0.0001) by the current currency pair’s exchange rate, and then multiply it by thesize of the standard lot (100,000 units).

For the USD/CAD currency pair trading at 1.1150, the value of one pip is0.0001/1.1150 * 100,000 = US$8.97

For the EUR/USD pair trading at 1.2630, the value of one pip is 0.0001/1.2630* 100,000 = 7.92 euros. To convert the value of the pip into U.S. dollars, multiply it bythe exchange rate. Therefore, the pip value in U.S. dollars is 7.92 * 1.2630 = $10.

The pip value varies between currency pairs due to different exchange rates.Exceptions are the currency pairs where the U.S. dollar is the quote currency. In thosecases, the value of one pip for a standard lot is always equal to US$10.

When trading fractions of the standard lot (mini-, micro- or nano-lots), the pipvalue of the standard lot has to be multiplied by the fractional lot value. Therefore, thevalue of one pip in the EUR/USD pair for a mini-lot is $10 * 0.1 = $1. The pip valuesfor micro- and nano-lots are $0.10 and $0.01 respectively.

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How To Trade Forex?Why Trade Forex?

24-hour operationHigh leverageFractional lot tradingLow transaction costsHuge liquidityNo-gaps trading Monday through Friday.No margin callsLimited number of currency pairs to track as opposed to thousands of stocks

(alsosee How Forex Is Different From Other Markets? )

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Is Trading Forex Riskier Than Trading Stocks or Futures?No, it is not. Any form of trading is risky, especially trading on margin.

When trading spot Forex your risk is limited to the size of your account. Withstocks and futures margin accounts you can lose more money than you have in youraccount.

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Where Can I Trade Forex?Usually, when people talk about Forex they refer to the spot market. In the spot

market currencies are traded physically or electronically “on the spot” at the currentmarket price.

For an average person, the most practical way to trade Forex is via an onlinebroker. Brokers pair all buy and sell orders and re-sell or hedge the remaining part toother brokers and/or financial institutions. The prices quoted by the broker are usuallyaggregated from multiple sources and might slightly differ between brokers.

It is also possible to trade currencies via Futures, Options and Exchange-TradedFunds (ETFs) but those markets are out of the scope of this e-book.

When you place a trade in Forex, you are always long or short one side of thepair against the other side of that pair. Therefore, you are always long and short at thesame time.

When you buy the EUR/USD pair that means that you simultaneously buy theEuro and sell the USD. When you short the Euro, you sell the Euro and buy the USD.

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How Much Money Do I Need To Start Trading Forex?To start trading, as opposed to gambling, you must have a proven trading strategy

and a clear objective. Your initial goal should be not to make money but to learn to tradeprofitably.

With that goal in mind, it is advisable to start trading a demo account first. Onceyou are profitable and comfortable using the software and your trading system, starttrading with real money but trade fractions of a standard lot (seealso What Is A Lot,Mini-Lot, Micro-Lot, Nano-Lot?).

Psychologically, trading with real money feels very different from trading avirtual account, even if you only risk and make just pennies.

To determine how much capital you need, calculate your average risk per tradein dollars and multiply that amount by the maximum number of reasonably expectedconsecutive losses. The resulting amount will be your risk capital.

Add to this risk capital the margin required by your broker for your averagetrade. The total amount will be the capital you need to start trading.

For example, if my average risk per trade is $10 and I reasonably believe thatthe maximum number of consecutive losses produced by my trading system will notexceed 30, my risk capital is $10 x 30 = $300.

If the margin required for my average trade is $50, then I would need at least$300 + $50 = $350 to start trading.

Note, that margin requirements differ for different currency pairs. Also, take intoaccount that sometimes you will want to have more than one trade open at the same time.Therefore it would be beneficial to have more money available for the margin.

Once you become consistently profitable, you can increase your risk per tradeand recalculate the trading capital requirements accordingly.

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Can I Lose More Money Than I Have In My Account?No, you cannot. In Forex trading your losses are limited by the size of your account.

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When To Trade Forex?While Forex is open 24 hours, the trading activity in the market and in different

currency pairs follows the sun increasing and decreasing throughout the day withopening and closing of different financial centers around the world.

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What Are Forex Trading Sessions? The Forex trading week starts with the opening of financial centers in NewZealand and Australia followed by Tokyo, Hong Kong and Singapore followed byFrankfurt and London followed by New York.By the time the North American banks close for the day, the foreign exchange tradingstarts in New Zealand again. Therefore traders distinguish 3 major trading sessions:Asian, European and North American.

The Asian trading session:The Asian trading session starts around 5:00 p.m. Eastern Standard Time with

the opening of financial centers in Brisbane, New Zealand and ends around 2:00 a.m.Eastern Standard Time with the closing of financial centers in Tokyo, Japan.

The European trading session:The European trading session starts around 1:00 am EST with the opening of

financial centers in Frankfurt, Germany and ends around 10:00 a.m. EST with theclosing of financial centers in London, UK.

The North American trading session:The North American trading session starts and ends with the activity of financial

centers in New York, USA. Their early activity starts around 6:00 a.m. EST and endsaround 5:00 p.m. EST.

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What Is The Prime Time In Forex? The prime time in Forex is the time when European and North Americantrading sessions overlap, which is from 7:00 am until around noon Eastern StandardTime.

This is the busiest and the most liquid time of trading in Forex.

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What Is The Best Time To Trade Forex?The best time to trade Forex differs between trading systems and depends on

chosen timeframes, currency pairs and personal preferences of traders.

For traders seeking high volatility the best trading time might be the prime timeand the times of financial news releases. Also, while prime time might be the busiest fortrading the US dollar, the Japanese yen might be more active during the Asian tradingsession and the European currencies during the European session.

Therefore choosing the right trading time must be carefully considered.

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How To Analyze Forex?What Types Of Forex Analysis Are There?

Same as in stocks and commodities markets, there are two basic types ofanalyses in Forex: Fundamental and Technical. Many traders use mix of both of thesetypes.

Some traders also consider Sentiment analysis as a separate form of analysesbut we believe it to be a part of the Technical analyses.

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What is Fundamental Analyses In Forex?Fundamental analyses studies economic, political and social factors that affect

prices of currencies.

Fundamental analysts make their buy and sell decisions based on theirinterpretations of statistical reports, economic indicators, central banks policies,political events, and other related data.

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What is Technical Analyses In Forex?Technical analysis is based on two premises:

1) All fundamental data available to all market participantsis reflected in the price. 2) Most of the time people react in the same way to similarsituations. Therefore historical price action repeats itself and can beused to predict future changes.

Technical analysts disregard all news and fundamental data. They study pricecharts and base their decisions on the price action alone.

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Do You Need A Plan?What Is A Trading Strategy?

A trading strategy is a set of clearly defined rules for opening, managing andclosing trades.

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What Is A Trading System?A trading system might consist of several trading strategies and also includes

money managementrules (see also What Is Money Management In Forex Trading? ).

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What Is The Best Forex Trading Strategy?There is no such thing as the best trading strategy. Not only some strategies work

better than others in certain market conditions but also some strategies work better forcertain types of trader personalities than others.

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What Is Money Management In Forex Trading?Money management is the most important factor that separates successful traders

from the rest. Proper money management is what really makes or breaks a tradingaccount. A trader can have the best trading strategy in the world and still lose money oreven wipe out the entire account due to the pure money management or the lack ofthereof.

Money management in Forex involves calculating risks and probabilities. Thetrading funds should be allocated between different strategies based on theirrisk/reward ratios. A trader should set the maximum allowed percentage of the accountthat can be risked at any given time.

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What Is A Trading Plan?If you treat trading as a business as opposed to a game of chance, you need to

have a trading plan, which is in essence a form of a business plan.

A trading plan defines overall trading goals, ways of achieving these goals, andall other aspects of trading such as:

What markets to tradeWhich timeframes to trade (tick or range bars, 1 min., 5 min, daily,etc.)How to scan markets for opportunitiesWhich strategies to use and whenMoney management rules strategies and also includes

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What Is Scalping In Forex?Scalping in Forex is a style of trading where traders attempt to take advantage of

small price fluctuations of currency pairs.

Scalpers “jump” in and out of numerous trades within a short period of timetrying to make (“scalp”) a small profit on each trade. Scalpers make tens and evenhundreds of trades per day.

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What Is Momentum Trading?Momentum trading is based on the assumption that once the price move starts it

will continue going in the same direction for some period of time.

Momentum traders open orders in the direction of the price move that havestarted already.

Momentum trading is our favorite trading strategy. You can see it at work in ourblog at PlainForexTrading.com

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What Is Swing Trading?Swing traders attempt to take advantage of short-term changes (swings) of price

trends in the opposite direction. They try to recognize the changing trend and profit fromthe price swing in the opposite direction.

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What Is News Trading?Prices of currencies depend greatly on the economic data. Therefore, important

economic news such as changes in interest rates, employment, Gross Domestic Product(GDP), etc. cause changes in related currencies.

News traders attempt to profit from price moves and trend changes that oftenfollow important news releases.

News trading is another trading strategy that we use often in our trading. Theway we use this strategy is described in detail in our e-book: “Forex Trading Strategy -Plain and Easy: A Proven System to Make Money By Trading the News Releases”

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How To Place Orders In Forex?What Types Of Orders Are Used In Forex?

There are two main types of orders that can be placed in Forex:

Market Orders – executed at the best price currently available in themarket. The actual price of the transaction might be different from theprice you saw on the screen when you placed the order. This happensduring high volatility times when prices change very fast or when thetrade volume requested is larger than the volume available in themarket at the price shown on the screen.

Pending Orders – executed at the price level specified by the trader.There are two types of pending orders:

Stop Orders – executed at the price level specified by thetrader. Once the price reaches the specified level, the stoporder becomes market order and is executed at the bestcurrently available market price. Therefore the actualtransaction price might differ from the stop order’s price.Limit Orders – executed at the exact price specified by thetrader. While this order type guarantees the entry price,there is the risk that the order will not be filled or will befilled only partially.

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What Is A Stop-Loss Order?A stop-loss order is a stop order that closes out your existing trade in order to

limit losses.

When the price reaches your stop-loss order the trade is closed at the currentmarket price (see What Types Of Orders Are Used In Forex? )

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What Is A Take Profit Order?A take profit order is a stop order that closes out your existing trade in order to

secure profit.

When the price reaches your take profit order, the trade is closed at the currentmarket price (see What Types Of Orders Are Used In Forex? )

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What Is Slippage?Slippage is the difference between the order price and the actual transaction

price. At the times of high volatility, such as during news releases, this price differencecan be very significant.

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How To Choose A Broker?What Do Forex Brokers Do?

Forex brokers provide investors and traders with the means to trade currenciesand some other financial instruments. That includes providing liquidity, leverage,software, support, etc.

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What Types Of Forex Brokers Are There?There are two general types of retail Forex brokers:

Dealing Desk Brokers, also called Market Makers,provide liquidityto the market by offering both buy and sell quotes (Bid and Ask) andtaking the other side of the trade. That is the reason they are alsocalled Market Makers. Dealing desk brokers do not chargecommissions for trading. They add commissions to the spread in theform of extra pips added to the interbank quote (see also What Is ASpread? and What Is A Pip? ).

No Dealing Desk Brokers. There are two types of No Dealing Deskbrokers:

- Straight Through Processors (STP) - brokerswho connect traders with the interbank market. They collectquotes from multiple sources and present the trader with thebest bid and ask prices adding some pips as their commission.- Electronic Communications Networks (ECN) –brokers that allow direct trading between all participants oftheir network. They do not alter the spreads and charge smallcommissions for each trade. The true ECN model eliminatesconflict of interest that exists when brokers take the oppositeside of the trade.

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How To Choose Forex Broker?Not all brokers are created equal and you should to do your homework before

committing any funds. The following is a list of things to check before opening anaccount:

1. Licensing and Regulation

Is the broker licensed and regulated as a provider of financialservices? If so, can you check this broker’s license number andcomplaints with the regulating body? We recommend dealing onlywith reputable regulated brokers (see also How Is Forex Regulated? )Do you trust the judicial system in the country where your broker islicensed?

2. Currency pairs offered for trading. Does the broker offer the currency

pairs that you intend to trade? 3. Transaction Costs

Do they charge commissions separately or include them in the spread?(seealso What Is A Spread? )How this broker’s spreads compare with other brokers?What are the overnight position holding costs?Are there any other costs involved?

4. Order Execution

How fast are orders executed?Do you always get the best possible price?How is the slippage? Slippage is the major expense. A few pips hereand there amount to significant difference in money made or lost.

5. Account types and margin available.

What types of accounts and leverage are offered? How does itcompare with other brokers licensed in the same country?

6. Initial deposit. 7. Deposits and withdrawals.

How easy it is to deposit and especially withdraw funds?Is there a minimum for withdrawal?What are the withdrawal costs?

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8. Trading platform

What software platforms are offered?How easy is it to trade your trading system with platforms offered?Can you access your account and trade while away from your homecomputer?Is there a mobile app available? Can you analyze the market and tradeon the go?

9. Customer service

Do you need support in your trading?At what hours is the support available?How easy is to get through to support and what is their attitude?

10. Additional services

Do you need any additional services such as market analysis, newsfeed, etc.?What other services are available and do you really need them?

11. Reputation

Make sure to Google your broker’s name in combination with suchwords as fraud, complaint, slippage, feedback and such.Check opinions of others on Forex message boards

12. Trade demo account for a while

Open a demo account with the broker you like to get a feel on howthings work with them.

To see the list of Forex brokers that we use ourselves and highly recommend,please visit our Forex Resources Page. If this link does not open, just visit our web siteat PlainForexTrading.com and select “Resources” from the menu.

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How To Calculate Margin?Your margin requirement equals the units of the base currency divided by your

leverage.

Example 1: trade of 1 lot on GBPUSD with leverage of 1:100 1 lot = 100,000units of base currency, in this case GBP100,000 100,000 / 100 = GBP 1,000 marginrequirement.

Example 2: A trade of 1 lot on GBPUSD with leverage of 1:500 1 lot = 100,000units of base currency, in this case GBP100,000 100,000 / 500 = GBP200 marginrequirement.

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How To Learn Forex Trading?What Is The Best Way To Learn Forex?

The best way to learn anything is by doing. Practically all Forex brokersprovide free demo accounts where you can trade in real time with imaginary capital.

Don’t be deceived by the seeming simplicity of trading. Succeeding in tradingtakes knowledge, skills, experience and A LOT of patience. Learn as much as you canand keep practicing on your demo account.

Once you are consistently profitable trading the demo, start trading with realmoney but risk as little money as you can. You will see a great difference in your ownemotional responses when trading with real money.

Your own emotions and the ability to keep them at check make all the differencein trading. I will go as far as to say that 90% of success in trading is the correctpsychology and discipline.

For those of you who likes technical trading, naturally I would recommendtrying out our PlainForexTrading.com where you learn by following professional tradesand getting them explained in detail.

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Can I Learn Forex For Free?The simple answer is no. There is no way to learn trading for free.

While there is a great deal of free information on the Internet, do not overlookthe fact that losing money to the market is the biggest part of trading education. If youembark on trading Forex, do not forget to allocate money to that expense.

We have compiled a list of Free Forex Resources, which includes links to freeeducation sites, free news sites, popular Forex forums, and other useful information. Ifthe link above doesn’t work, please visit our web site: PlainForexTrading.com andclick on “Resources” in the menu.

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What Is A Forex Signal?A Forex signal is a signal to open a trade on a currency pair at a specified price.

The signal is generated and sent either by a human or a software program to asubscriber of the Forex signals service.

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What Is A Trade Copier?A trade copier is a software program that instantly copies trades from one

trading account to another. Providers of Forex signals often use trade copiers toautomatically copy their signals to accounts of their subscribers.

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Can I Learn Forex By Using Forex Signals or Trade Copiers?Yes, we advocate this style of learning. At PlainForexTrading.com we explain in

detail all reasons for entering, managing and closing each trade. This makes it a greattool for learning Forex by doing.

All our trades and results are published in a blog on our web site athttp://www.plainforextrading.com/blog

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How To Succeed In Forex Trading?What Is Success In Trading?

As with many other things in life, this is a matter of opinion. Some would saythat the success is money. But the amount of money one makes depends on the size ofhis/her account and the risks taken.

To me success in trading is being consistently profitable over a long period oftime. Everyone gets lucky once in a while but the true measure of success in trading is inthe repeatability.

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How To Succeed In Forex?The formula of success in trading and investing is simple:

1. Make more money than you lose2. Never lose more than your account can afford3. Compound your wins

Do not confuse simple with easy. It takes skills, discipline and the rightpsychology to succeed in trading.

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What Things To Be Careful About When Trading Forex?Regardless of their background, education and experience, all traders have to

deal with the following issues:

1) Ignorance – lack of knowledge is the number one factor people losemoney in trading2) Greed – this includes risking more than one can afford and holding awinning position for too long. There is nothing wrong with trying to squeezeas much profit from a position as you can but your decisions must not bebased on emotions.3) Fear – all traders know this feeling of watching the loss grow. Again,your decisions must not be based on a clearly defined strategy, not onemotions.4) Arrogance

Dealing with these emotions is a never-ending process and each trader must bealways aware of them. How To Prepare Mentally For Trading Forex?

It's impossible to succeed in trading without the correct psychology and mindset.

Discipline is the one most important factor in any trader's success.

You can have the best strategy in the world and lose money if you don't followthat strategy to a tee.

The majority of traders lose money because emotions overpower them. Greedand fear are the two enemies, which every trader has to deal with daily.

It takes confidence and courage to keep trading the same system after strings ofconsecutive losses or to take profits off the table when the price is moving in your favor.

There are different methods to control emotions. Among others are meditation,breathing exercises, sports, yoga, etc. Unfortunately, none of them is universal andresults will depend on your personality.

A proper risk management will save you a great deal of emotions. Always makesure that you don't risk too much money on any single trade and that the combined riskfor all open positions is not overextended.

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AfterwordForex is a fascinating ever-changing market and can be very rewarding. But it IS

NOT a get-rich-quick vehicle and it should never be approached as such.

Success in Forex trading takes commitment, knowledge, skills, discipline and alot of patience.

*****

This is the e-book in its entirety. If you found it useful, please leave a few wordsat Amazon’s Review section. It would make all the difference and would be very muchappreciated.

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About the Author

David Hughe is the founder, editor and chief trader at PlainForexTrading.com.His trading skills are displayed in the blog on our website.

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Contacts

Please feel free to ask questions, express opinion or contact us for any otherreason through our website at PlainForexTrading.com