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Competent Level

Competent Level - FX Trading School

This Section you will learn everything about how to analyze the markets and how to trade.

We explain concepts such as trading signals, building a routine and a lot more.


COMPETENT LEVEL UNITS - Ordered by Serial Number
"Risk capital is something that you will often hear when it comes to the financial markets. No matter whether you are trading stocks or some kind of derivatives including forex, risk capital is an important topic of discussion. Simply put, this is the amount of money that you are using to trade. As you might already know, trading with money in risky markets means that you need to play it smart. Imagine if you took a loan from your bank to bet on forex and if you lost. You would end up holding the bag literally. While forex trading is often associated with riches and a luxury lifestyle, the truth is far from it. Risk capital should ideally be the capital that you are willing to risk, or in other words lose it all. While the markets will reward you if you are good trader, always remember that the capital with this you are trading is a risk capital. Learn…
"As someone who is just getting started with forex trading, one of things that comes to mind is the amount of time you need to dedicate to trade the forex markets. Given the fact that the forex markets operate almost 24 hours a day and five days a week, this question is asked even more. But the truth is that there is no evidence that supports the view that the amount of time spent in forex trading will give you bigger profits. Instead, the question traders should ask is what is the amount of time, that is required to dedicate towards learning about the currency markets. In this article, we firstly dispel the myth about forex trading time and profits and also outline the main aspects that traders need to dedicate towards in forex trading. By the end of this article, you will be able to understand what aspects of trading you should and should not focus on." One of…
"Traders often ask the amount of returns that they can make from the forex markets. The main thing to note is that with the exception of a few changes, the forex markets behave the same way as stocks do. The same principles that affects one asset tends to also play a similar role affecting the price of the other assets. Still, thanks to hyped up marketing, traders often turn to forex with unrealistic goals. Many believe that it is possible to make huge profits that are usually not possible with stocks or other derivative trading products. But this is a trap as it leads you into setting up for failure rather than success. In this article, we talk about the realistic returns that one can expect from trading forex and also how you can work towards setting such realistic goals with forex trading. Do not make the mistake that many beginners in forex do." When you have come this far…
"Whether you are playing a game, or going on a road trip, chances are that you will do your research first and come up with a plan rather than just go on a whim. A plan essentially is a strategy that tells you what you should do and also prepares you for handling any unforeseen risks or surprises that may come along. In the forex markets a pre-trading plan is equally important. If you think you can make money trading forex without dedicating the time to having a pre-trading routine, it can be disastrous to your trading. Without a trading plan or a pre-trading routine, you are essentially shooting in the dark and this can be akin to gambling. In this article, we discuss one of the most important topics in trading, which is having a pre-trading plan. Learn how you can start preparing for the markets, the day or for the week ahead by developing the habit of having…
"Even before you get ready to trade, there are some things that you should be aware of about the markets. As a trader, it is your job to understand the price of the security. The price of a security moves not because of buying and selling but rather on certain factors. These factors can be determined based on applying two concepts of market analysis. These are known as fundamental analysis and technical analysis. As a forex trader, chances are that you will come across these two types of market analysis in your day to day trading. In this article, we explore these two concepts and give you a fair idea of what fundamental and technical analysis is all about. You should be able to differentiate these two types of market analysis and also learn about its importance when you are trading forex. Following this article, we will then get into more details about the two main types of market analysis…
"Technical analysis is one of the most commonly used methods to understand what price of a security is doing. Using technical analysis, traders try to figure out when to buy or sell the security or the forex currency pair. Technical analysis is an umbrella term. There are many different ways of using technical analysis, which will be explore in this article. This type of study of the markets is used to understand what price will do. It is mostly used by day traders; traders who buy and sell within the course of the regular trading day. Technical analysis, depending on the type of analysis you are using can be easy or difficult. Still, many find technical analysis to be an easy way to trade the markets. You can quickly learn the various trading strategies by just studying a few technical indicators. Learn more about what is technical analysis and how you can use it in your trading with this article."…
"Fundamental analysis is a form of studying the financial markets. As the name suggests, fundamental analysis deals with the underlying reasons behind the price of the security being analysis. Depending on what markets you are trading, fundamental analysis can vary. In forex, fundamental analysis is simply the study of the economy for the currency in question. By studying the economy, traders are able to understand the implications it will have on the country’s interest rate. The interest rate in turn tends to make a currency more or less preferable. To be good at fundamental analysis you need to have some knowledge about the economies and the markets. It might seem a bit difficult at first, but with practice you can use fundamental analysis to determine whether the price is really reflecting all the news or if there is some anomaly in the markets. Fundamental analysis is important if you want to trade with the trend and want to trade from…
"When you look at the general price of a security, what you see is not just price but also the sentiment among the investors. Typically, when investors are optimistic, this is reflected by higher asset prices. Conversely, when investor sentiment is pessimistic, this is reflected by weaker or lower asset prices. In the same way, assets tend to behave differently depending on the prevailing sentiment. Therefore, sentiment analysis is a study of the different markets, the risky and the safe haven assets. Using sentiment analysis and the different markets, investors are able to tell whether the general sentiment is positive or negative. Depending on the sentiment, certain assets perform better compared to the others. The same holds true in the forex markets as well. There are some currencies and securities that perform better when the market sentiment is negative and there are some currencies that perform better when the market sentiment is positive. In this article, we show you what…
"Fundamental analysis and technical analysis might seem two entirely different approaches to understand what the market is doing. However, both these types of study of the financial markets derive to the same conclusion. They both answer the question whether price is currently reflecting all the news that there is currently available. Fundamental analysis or technical analysis is often used in isolation. This mistake means that traders trade the markets without knowing the complete picture. In this article, we look at why traders should combine both fundamental and technical analysis when it comes to trading the forex markets. You will see that both these types of studies are closely interlinked. When you have both fundamental and technical picture of the markets, you are able to easily understand what price is doing. This in turn increases your confidence in trading the markets. Besides fundamental and technical analysis, you can also combine sentiment analysis to truly feel what the markets are doing." So…
"Forex trading signals have been making the buzz in recent years. It is a rather new concept where a forex signals provider offers to sell their trading signals. Traders who wish to sign up for this service are able to pay a subscription fee following which they receive the signals which they can use on their trading accounts. As the technology evolves, now a days the forex trading signals are automated to the point that you do not need to stay glued to your trading systems all the time. Using various tools, the forex trading signals provider can automatically execute the trades on your account, depending on your settings and your risk tolerance. Forex trading signals might seem like an easy way to make money in the forex markets, but the risks are quite high. You are essentially risking your trading capital into the hands of an unknown trader. For the forex trading signals provider, the monthly subscription fee is…
"No matter what type of technical analysis that you use, support and resistance is something that you cannot get away from. This is because of the nature of the way the markets work. Generally, support and resistance as the name suggests offers support or resists price. Identifying support and resistance levels before time can potentially give you trading opportunities. Many beginners in forex think that support and resistance levels are complex. There is some subjectivity involved, but once you have enough practice, plotting support and resistance levels should become easy. It is important that the trader has a good understanding of the concepts of support and resistance because even if you are trading with technical indicators, they all rely on the concept of support and resistance which comes from price itself. In this article, we give the basics of what support and resistance levels mean and an example of how price behaves to these levels." Support and resistance are two…
"Trend lines, as they indicate are lines drawn on the price chart to depict the trend in the price of a security. Within price action trading, trend line is the most simplest of all forms of technical drawings However, traders do not focus much on understanding how trend lines work. Using automated tools, traders simply look for a trend line to be breached. But there is a lot more going on than just a break of a trend line. In this article, we give you the basics of what a trend line is and also how you can plot the trend lines on a price chart. Getting a firm grasp on the trend line drawing concept is important. This is because trend lines also act as dynamic support and resistance levels. As a result, there is a lot of market context to be built up using trend line analysis. You can combine trend line analysis along with technical indicators to…
"Among the different methods of technical analysis, analyzing the markets using price channels is one way. The channels, as indicative by the name sits on the price chart and is drawn over price. They indicate the price action rather accurately as they tend to change direction. Understanding what price channels are and how they work is important. Using price channels, traders can get a different perspective of the markets. Typically, price channels are used in trend trading. This is because channel lines also tend to act as trend indicator. But the main difference is that depending on the price channel technical indicator that you are using, they can also plot the expected higher and lower boundaries of price. You can use price channels either by ready to use technical indicators, or you can also use technical drawing tools to plot the price channels manually. Read more about price channels and how you can use them in your trading." Channels in…
"Support and resistance levels are two concepts in technical analysis that you cannot ignore. Regardless of what markets you are trading, if your approach to trading is based off technical analysis, then support and resistance levels are something that you cannot avoid. While there are many automated tools to assist you in drawing the support and resistance levels, understanding how to identify these levels can greatly work to your benefit. Drawing support and resistance levels requires a bit of subjectivity. But at the same time, you can expect these levels to be clearly seen among a lot of traders. In this article, we give a basic outlook on how you can look at the price chart to draw the support and resistance levels. The only way to become good at technical analysis is by practicing how these levels work and knowing how price usually behaves as it approaches the support and resistance levels." Support and resistance as you have learned…
"Pivot points are some of the tools used by traders when it comes to technical analysis. Using pivot points, traders project the potential price levels. These levels are calculated by analyzing the price action or the price behavior from the previous day or the previous session. There are many types of pivot points and the time frames that they are used for analysis. Typically, when one talks about pivot points, they are referring to the daily pivot points, which are derived from the price action from the previous day. Pivot points can act as support and resistance levels. They are widely used alongside other technical indicators to identify potential areas of reversals in price. In this article, we take a look at what pivot points are all about and also give some insights into how traders started to use pivot points. In the next sections of this series, we will then dig deeper into understanding the different types of pivot…
"Pivot points are simple price levels derived from the previous day or week’s price action. The pivot points act as reference points for the markets. There is a good chance that price will react to one of the pivot points. There is nothing mystical about pivot points. These are values that are mathematically derived based on key price points such as the open, high, low and close from the previous day. There are many different ways on how traders can use this information. This has led to creation of some various pivot point indicators. All of them basically work on the same bottom line concept of projecting price points based on previous day’s price behavior. The difference here is in the calculation of these price points. In this article, we take a look at three of the most commonly used pivot points. Remember that there is no pivot point calculation that can give an edge over the others. It is…
"Forex managed accounts are a type of service that allows you to invest money with a forex manager. The forex fund manager in turn uses the investor’s capital to trade on their behalf. Of course, for providing this service, the forex fund manager takes a fee. For investors who do not have the time or the knowledge to actively trade the forex markets, a forex managed account service might seem the best option. But there are a lot of scams that one should be aware about. In this article, we give you the lowdown about how forex managed accounts works. We also point you on the right direction so that you avoid being scammed. There could be many reasons why one would choose a forex managed account service. But the important factor is that you trust your investment in capable hands that offers realistic returns. Learn more about forex managed account services and how you can use this as an…
"Forex robots is a name given to algorithm based trading strategies. These are simple pieces of technical codes that trade based on the set of rules that are coded into the program. Whether you are trading on the MT4 platform or the cTrader trading platform; two of the most popular trading platforms in retail forex, you have the option to build and use a forex trading bot. Using a forex trading bot, traders can eliminate the need for having to sit in front of their computers and trade manually. There are different ways to build a forex trading bot. Some can be fully automated, while some forex trading bots can be designed to automate simple functions in a way that it alerts you to potential trading signals. This in turn can enable you to look at the markets and figure out if the trading signal is worth taking or not." The evolution of the financial markets has brought about many…
"Expert advisors are automated trading strategies coded into a file. They have the file extension of .ex4 when it is compiled or .mql4 when the file’s code is open. Installing EA’s on your MT4 trading platform is the first step before you can start to use the expert advisor file. Therefore, it is essential that you get your basics right. It is important that you follow the instructions given in this tutorial to correctly install and use the expert advisors. This tutorial gives you a detailed view on how you can install the MT4’s expert advisor files. We also outline the various aspects that you need to consider and the various settings that need to be configured. If you have been apprehensive about installing EA’s then this tutorial is ideal for you as it shows how you can install and also troubleshoot the expert advisors when installing it on to your MT4 trading platform." Forex expert advisors or EA as…
"The MT4 trading platform offers traders with a preselected list of technical indicators. Technical indicators as you might know are required if you are trading based on technical analysis. The indicators show you how price is behaving and potentially alert you to trading set ups. As a beginner to forex trading, you need to have a good understanding of how to use the technical indicators. In this article, we give you a step by step guide on how to use and install the MT4 trading indicators. We also briefly give you an idea on how you can install custom indicators onto your MT4 trading platform as well as the option to edit the files directly from your trading platform. By the end of this article, you should have a fair idea on how to use the technical indicators on your MT4 trading platform as well as be able to troubleshoot any potential problems you might face." The MT4 trading platform…

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