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Novice Level

Novice Level - FX Trading School

This Section outlines the concept of the Forex or the Currency Markets.

Starting with an introduction to the forex markets we explain how it is different from other financial market structures.


NOVICE LEVEL UNITS - Ordered by Serial Number
"When it comes to the financial markets, you might have heard about stocks and bonds. But there is another market that deals with the currencies, known as the forex markets. This is one of the biggest markets there is in the world, with average daily turnover of about $5 trillion. Learn how you can be a part of this huge market. Forex trading is all about speculating in the currency markets where one currency’s performance is seen in relation to the other. This article gives you the basic foundation of what forex, or foreign exchange markets is all about. The article, what is forex, lays the foundation to the basics of the forex markets and will help you understand further on the terminology used in forex and what you need to know to be a successful forex trader. This is the first step in your education towards understanding how the forex markets work." Forex or foreign exchange markets is a…
"In the previous article/unit we explained the basics of forex. That forms the fundamental basis in your journey to understanding the currency markets. By now, you have already gained the knowledge of what is the forex markets all about and how it comes to other markets. While the previous article gives you a foothold into the currency markets, we take a notch further in this article. Here, we explore the concepts of what securities or instruments are traded in the markets. You will learn the basic elements of what is involved in trading the currency markets. By the end of this article, you will have a good understanding of the instruments that are traded in the forex markets. This will give you a good base as we move to the next level of learning what forex trading is all about. This article gives you a taste of the things to come and what you can expect to see in the…
"Congratulations! You have completed the first two elementary courses of what the currency markets is all about. By now you have a fair understanding of what the forex markets are all about and most importantly, you know what instruments are traded in forex. But you know that there are other types of markets that you can trade too. So, which is better? Every type of financial markets has its own pros and cons. In this section, you will learn what are the advantages of trading forex and the benefits about this market that makes it unique to other types of markets. People often get confused between whether to trade forex or stick to stocks trading. Curious to know why people prefer to trade forex? Read this article to find out more about the advantages that forex markets have over other kinds of markets. By the end of this article, you will be able to understand whether forex trading is something…
"When someone talks about the markets in general, the first thing that comes to mind is of course the stock markets. This is because stocks are so widely covered in the mass media. Whether it is on the internet or in your local newspaper. But the forex markets also are equally massive. They are just as important for the financial markets as a stock market is. In this article, we compare the differences between the forex and stock markets. You will get a better understand of how different these two markets are. In fact, the approach taken to trade these markets are quite different as well. Get well informed with this article which will walk you through the differences between these markets and how you can make money trading the currency markets as well. You will be able to understand by the end of this article about how forex markets operate in a slightly different way compared to stocks or…
"At some point, every forex trader asks the question whether they should trade forex or futures? The markets look the same for the layman, but there are some subtle differences. Some might prefer to trade futures, while others prefer the forex markets. In this article we explain to you the difference between the forex markets and the futures markets. You will get a deeper understanding of how these two markets, which basically rely on the same underlying instrument can vary so much. The futures markets are widely popular in the United States. But if you are a trader from elsewhere, you might be left scratching your head as to which of these two markets are better to trade. Remember that every type of financial market is unique and designed for a purpose. Therefore, there is no “best market” that is available for you trade. By the end of this article, you will learn about the differences and then judge for…
"Now that we have progressed quite a bit in our beginner’s section, it is time to dive deeper into the world of the foreign exchange markets. In this article, we start with explaining to you how the forex markets are traded. The financial markets in general trade based on the same principles. However, the forex markets are traded a bit differently. You may not see these differences if you just glance through the forex markets. This article will outline to you the concepts and the terminology that will be used every day when you trade the currency markets. We will outline the basic things that you need to keep in mind and give you examples and compare forex to stock trading to illustrate the uniqueness of forex trading. By the end of this article, you will gain a bit more knowledge about the currency markets and a basic idea of how to trade these markets." Unlike most other markets, the…
"The forex currency pair is one of the most basic things you should understand when it comes to the forex markets. Regardless of whether you have traded stocks or other markets in the past, when it comes to the forex markets, the convention and naming terminology is quite different. Understanding what is a currency pair, and the pricing convention is important as it is the basic of things before you learn how to trade forex. In this article, we explain in detail what is a currency pair in forex and how the pricing is derived based on the currency pair concept. By the end of this article, you should have a fair understanding of currency pairs and how they are used in trading forex. We will also touch upon some concepts in this article which we will explain in detail at later stages of the forex education course. But before we go into those details, here is a basic foundation…
"When one talks about the forex markets, the general assumption is that it is an isolated market. But in reality, stocks and forex are part of the whole economic cycle. Therefore, what happens in the stock markets affects the forex markets and vice versa. At the end, the global economy transacts in their local currencies. There are a number of factors that can affect the valuation of a currency and its relative performance to another currency. In this article, we introduce you to the concept of how the stocks and the forex markets are related and why you shouldn’t look at them as two completely different markets. There is a strong interrelationship in the currency markets which can affect each other. The combined markets also influence the economy on the whole. At the end of this article, you will understand the role the forex markets play and how it affects other financial markets such as stocks and bonds." So far,…
"We have been learning about the forex markets and covered concepts such as what are traded in the forex markets and how they are different compared to other markets such as stocks and futures. We also touched upon the inter market relationships between forex stocks. Now, when it comes to actual trading, how do you do it? In this article, we explore the two main types of forex trading that you will come across on a regular basis. Whether you are searching for a ready to use trading system or trying to build your own, you will have to choose between one of the two ways of trading in the forex markets. By the end of this article, you will have an understanding of the two main ways you can trade the forex markets and also learn which is more suitable for you to trade. Depending on which method you prefer, you can expect to see how trading can be…
"Trading forex can be lucrative for reasons which we covered in one of the previous sections. But now comes the question of how traders make money in the forex markets. We have already discussed some basic concepts about what is traded in forex. In this article, we build upon the concepts even further we explain in a step by step process of how traders make money and also manage their risks in the forex markets. Consider this article as the first basic step in your move to making your first trade. By the end of this article, you would be able to analyze how to read the forex charts and also be able to identify potential money-making opportunities. But do not get ahead of yourself. There is still a lot more to learn about before you can start trading on your own. The whole purpose of this article is to illustrate how money is made trading forex." When you are…
"Market size and liquidity are two essential aspects for trading. If there is no liquidity in the markets, it can be difficult for you to trade. You will observe abnormal prices and your limit orders won’t get filled at the price you want. Therefore, before you trade any market, it is important to assess the market size and the liquidity factors. Thankfully, the forex markets are huge and they are one of the largest markets, if not the largest market in the world. Thus, by the sheer size, there is also ample liquidity when you trade currencies. In this article, we give you a primer on the size of the forex markets and the most traded currencies. By the end of this article, you would have a good amount of knowledge about the forex markets and this will help you to understand how big the world of currency trading is." The forex markets, as you might know by now deals…
"In the previous section we introduced you to the concept of the forex execution model. In this article, we go into more detail to explain to you the two main types of forex brokers that you will come across. There are a lot of myths that surround each of these forex broker execution model. But the truth is that each has its pros and cons. By reading this article, you will get an understand of the trades are executed and this will in turn help you to figure out whether you should open a trading account with a dealing desk or a non-dealing desk forex broker. This is an important point to focus on as it is very likely that you will stick with just one forex broker in the long term. Therefore, the sooner you have an understanding of the forex broker types, the better as it will help you to make an informed decision when you open your…
"When you talk about trading, chances are that you will most likely focus on the markets that you are trading, perhaps a bit of trading systems and the fundamental and technical analysis. Traders often think that their job is done after they have placed their trades. But did you know that there is a whole different operation behind the scenes? Have you wondered what happens after you place your trade? Who fills those trades and how they are executed? This article gives you the basic foundation that you will find useful at later stages. Not all forex brokers are created equally. The way your trades are executed is just as important to your success as a trade as your trading strategy. Learn about the different ways your trades are executed and also the pros and cons of these two basic forex execution models. Do not make the mistake that most other beginners in forex trading do, which is to ignore…
"Having the right kind of a forex broker is all the difference between a successful trading journey and an unsuccessful one. Due to the sheer magnitude of forex trading, there are many forex brokers available now a days. It can get confusing when choosing a forex broker because there are too many choices. Therefore, it is important that you as a trader conduct your due diligence before you choose a forex broker. But how do you do that and what are the things to look for when choosing a forex broker? In this article, we point you in the right direction by showing you six most important things that you should bear in mind when choosing a forex broker. Start off on the right foot and focus on these six things alongside other factors that are individual in nature in order to have the right forex broker that you can trade from." Your first step in forex trading, after you…
"A good forex trading platform is essential to your success as a trader. You are only limited by the functionality that is available from the forex trading platform. Not many traders pay a lot of attention to the forex trading platform when they start trading, but this is something very important. A good forex broker and a good forex trading platform is one of the foundations that you should have. Consider things like having a good connection, speed of execution are some of the things that matter to you as a trader. In this article, we point you to some of the things that you should consider when you are choosing a forex trading platform. We also list out the major forex trading platforms (both free and paid) that are currently available. It is quite possible that you will end up trading on one of these forex trading platforms. By the end of this article, you will know what things…
"No matter what type of markets you are trading, you cannot avoid the trading fees or commissions. These fees are unavoidable because the broker is providing you with a service. The service could be something ranging from making the market for you to executing your trades as STP. Then there are also financing costs. As a trader, you should be aware of all the costs that you can incur when you are trading forex. Having said that, the costs of trading forex is much cheaper compared to the other markets. In this article, we give you an outline of the trading costs that you will incur in your forex journey. This is something that you should also consider when choosing a forex broker because the fee may vary. Understanding the different costs will help you to understand if your trading style is more expensive and will give you an option to choose the appropriate forex broker." When you trade forex,…
"The derivatives markets are one of the largest. They are also the most volatile because they are primarily used as hedging products. It is not just speculators and day traders but also consumers and suppliers who make use of the derivative markets. Among the many types of derivative products, options are one of the most widely used hedging contracts. An option contract allows the participant to hedge their bets made in the underlying spot markets. In this article we give you an introduction to the options contracts and how traders use options such as stock options or forex options in order to hedge the volatility in the underlying markets. We also focus on the different types of options that are available as well give you a basic introduction to how options work. Chances are that you might not be using options that much, but they are a product that you should know if you wish to advance your career as…
"The search for speculation is quite high when it comes to the financial markets. Regardless of what fancy term you give it, at the end of the day, the investor or the day trader is merely speculating on the price. When they are right, the investor or the day trader is rewarded. And there is the risk factor as well. Among the different products available, binary options are something new. But at the same time, they primarily designed as a pure speculative play. If you want to bet on the direction of the markets, then binary options allow you to do so with a fixed amount of risk. But there are significant risks to trading binary options. In this article, we give you a primer on what binary options trading is all about and how these products work. As a beginner to forex trading it is important to understand the different financial products that you will come across." If you…
"Binary options contracts are speculative bets that you make on the direction of the price of the underlying security. But binary options are not just about betting on the direction. In fact there are different scenarios that you can bet on. If you search for a binary options broker, chances are that you will come across many different types of customized binary options products. However, there are three main types of binary options that are common to all binary options brokers. In this article, we break down the three most commonly traded binary options trades that you will come across. You will also learn why some binary options types offer higher returns compared to others. Binary options can be used as a way to make money quickly, but if you are wrong you can just as easily lose your invested capital. Therefore, it is good to have an understanding of the three most common binary options types." In the previous…
"So far we have introduced you to the concept of options trading and we delved deeper into the world of binary options. By now you have an understanding of what are binary options and the different types of binary options that you can trade. But to take this a step further and to ensure that you get a full understanding of how binary options work, we will show you how binary options and forex trading are different from each other. By the end of this article, you will have gained complete knowledge about how binary options are different from forex trading including the subtle differences between these two financial products. Although both binary options and forex relate to the same market, the way they function are different in aspects such as leverage, risk and so on. Read this article to get a better understanding that will help you in the long term when trading forex." Binary options as you already…
"If you want to trade any of the financial markets, then you need some kind of an interface that connects you to the markets. Thus, a trading platform is exactly that piece of software that allows you do access and trade the markets. A forex trading platform obviously connects you to the currency markets via your forex broker. It is one of the main entry points for you into the world of currencies. As a result, there is a lot riding on the forex trading platform. In this article, we give you a primer into the various forex trading platforms and also outline what are the most important things that a forex trading platform does for you. By the end of reading this article, you should be able to gain a fair amount of knowledge about the forex trading platform and also gain familiarity with some of the most commonly used trading platforms if you want to trade forex." Forex…
"A Forex Regulatory agency is an important institution that maintains the integrity of the market. This is essential because when there is no confidence in the markets, it can wreak havoc. Therefore, a forex regulatory agency is an important element in the ecosystem of forex trading. In this article, we will walk you through the role of a forex regulatory agency and also why they are important. You will learn about some of the major regulatory agencies around the world and also understand the importance of trading with a forex broker that is regulated and licensed. This is an important piece of information that you should pay attention to. You can avoid a lot of pain at a later stage because scams are something that are common to forex trading. Read this article to understand why it is important that you stick to trading with a regulated or a licensed forex broker." A regulatory agency is a government appointed institution…
"Forex scams are something that you will come across. It is quite likely that you will be smart and avoid these scams or let greed get the better of you and end up as a victim of a forex scam. Because the forex markets operate in an online environment, it is easy for scammers to set up a trap and play on the greed of traders. Remember that there are no shortcuts to success and forex scams basically operate by giving you the shortcut. The sooner you realize this, the easier it is for you to avoid such forex scams. In this article, you will come across some of the most common forex scams that we will also show you how you can avoid such scams early on. The sooner you are aware of this, the better the chances that you will not end up being scammed. The main takeaway from this article is that you need to keep your…
"One of the benefits of being a new forex trader is that you can already learn from the mistakes made by other traders. This puts you at a unique advantage. But of course, the trick is in making a conscious effort not to repeat those same mistakes. As a new trader, you are bound to make several mistakes. It is only by making these mistakes that you will slowly learn to grasp the true reality of trading. In this article, we point out the five most common trading mistakes that new traders make. By following this article, you will learn how you can avoid these very mistakes. Remember that while mistakes are good, with forex trading the mistakes can be very expensive. So if you do not want to lose all your money within the first few months of trading, start by avoiding the common mistakes that many other beginner traders in forex make." As a beginner to forex trading,…

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