Forex Trading Guide v1 -For Beginners and Advanced Forex Traders
Content
.Qexpert.com
FOREX TRADING GUIDE
FOR BEGINNERS & SEMI-ADVANCED TRADERS
Foreign Exchange Trading Guide
v1.0
“Making Money by Trading Forex Currencies”
Forex Trading Guide v1.0 -Copyright © February 2014
George Protonotarios ©-All rights reserved worldwide
Distribution by Qexpert.com
www.Qexpert.com
Forex Advertising
FOREX TRADING GUIDE
“How to Make Money by Trading Forex Currencies”
The Basics for Beginners and
Semi-Advanced Traders
-TABLE OF CONTENTS1. What is Forex all About? ...............................................
2. Two Categories of Forex Brokers..............................
3. Why so many People Trade Forex? .........................
4. Forex Bonus Promotions................................................
5. Forex Trading Rebates....................................................
6. Six Different Forex Trading Styles............................
7. Live Trading Signals & Forex Robots.......................
8. Useful Forex Trading Resources.................................
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1. What is Forex All About?
Forex means FOReign EXchange and it is a global market where the world’s
currencies are traded, one currency against another. Central Banks, Commercial
Banks, Large and Small Corporations, Institutional Investors, Individual Traders and
Common Tourists occasionally need to exchange one currency for another.
Examples:
Take for example an importer who is based in the US and wants to import 5
Mercedes Trucks from Germany. He must exchange US Dollars for the European
Currency (EUR) in order to pay for his import, so he must make a transaction in the
Forex Market.
■ Importer Buys EUR and sells USD
In the opposite example, a tourist from Germany wants to visit New York so in order
to pay for his hotel he must exchange Euros for US Dollars. This transaction will also
be made in the Forex market.
■ Tourist Buys USD and sells EUR
Forex Currency Pairs & Main Categories
Currencies are traded in pairs, you buy one and at the same time you sell another
currency. In any currency pair (in the above example EURUSD) the purchased
currency is called the Base Currency (EUR) and the sold currency is called the Quote
Currency (USD).
There are three Main Categories of Forex Currencies:
i)
ii)
iii)
Forex Majors (the most popular and traded pairs: EURUSD, GBPUSD,
USDJPY, USDCHF, USDCAD, AUDUSD and NZDUSD)
Forex Minors (less popular pairs and thus more expensive to trade)
Forex Exotics (no-popularity and thus very expensive to trade)
What is a Forex Lot?
A Forex Lot is the standard unit size of a Forex transaction. There are 3 different lot
sizes:
■ Micro Lot Size (equals $1,000) → Suitable for Forex Beginners
■ Mini Lot Size (equals $10,000) → Suitable for Semi-Advanced Forex Traders
■ Standard Lot Size (equals $100,000) → Suitable for Advanced and Pro Traders
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But where is the opportunity to make money after all?
Currencies are not traded in fixed prices -instead they are part of a free floating
trading system. Every order for buying / selling a Forex currency is a factor creating
either demand or supply in the market. Even tiny fluctuations in this free-floating
system can be transformed into huge profits using the ability of trading leverage (as
it will be described afterwards in Chapter-3).
Where is the Forex Market Situated?
All currency transactions take place within the Forex Market. Where is Forex
situated? Actually nowhere specifically, Forex operates as a non-centralized network
such is the World Wide Web. All transactions are executed within the Electronic
Network of Banks (called the ECN network). There are of course several physical
Financial Centers around the world. These financial centers are found in major
capital cities such is New York, London, Tokyo, Sydney etc.
Today Foreign Exchange is by far the largest market in the world. Forex has become
so huge that volumes exceed today 5 trillion USD only in a single day.
Forex Market Trading Hours
The Foreign Exchange market is open 24/5 between Mondays to Fridays. The Forex
daily activity is divided into 4 separate sessions:
(1)
(2)
(3)
(4)
New York Session, 8:00 am to 5:00 pm EST
Tokyo Session, 7:00 pm to 4:00 am EST
Sydney Session, 5:00 pm to 2:00 am EST
London Session, 3:00 am to 12:00 noon EST
Forex Market Overlaps
Forex overlaps occur when two of the above sessions are opened simultaneously.
Here are the three Forex Session Overlaps:
(i) New York and London Session Overlap: 8:00 am to 12:00 noon EST
(ii) Sydney and Tokyo Session Overlap: 7:00 pm to 2:00 am EST
(iii) London and Tokyo Session Overlap: 3:00 am to 4:00am EST
During these overlaps, both trading activity and market liquidity are maximized.
Many traders select to execute orders only during these overlaps.
To highlight the importance of time when trading Forex, just think that there are
automated systems trading exclusively the London and Tokyo Overlap. That means
that during the other sessions remain inactive.
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Moreover, there are automated systems trading only as the Asian Session begins.
These short-trading systems are commonly scalping the market. Many of these
Scalping Systems are presented in Chapter-7.
So What is Forex Scalping Then?
Scalping is a promising way of trading Forex based on the assumption that you hold
state-of-the-art trading technology and the right system to do the job. Scalping
Forex means opening and closing trading positions lasting less than one minute and
targeting returns as low as 0.001%. Those traders who scalp the market are called
scalpers. This is a common trading style and you may find more trading styles at
Chapter-6.
Why should anyone targeting tiny returns of 0.01%?
Wait until the next chapter, the chapter about trading leverage, and you will
understand the reason why.
Online Forex Platforms
What is a Forex Trading Platform?
A Forex Trading platform is simply your ticket to Online Forex Trading. A Trading
Platform is working like a bridge between you and your Forex Broker. When you
execute a trading order (for example selling British Sterling against the US Dollar)
this order is passing instantly from your platform to your broker. Then again almost
instantly it is passing to the Forex Market.
The fantastic thing is that almost all Forex Trading Platforms (Desktop and Mobile)
are offered for free to download and to use. Freeware and open source software
matters when you trade Forex. The industry’s standard platform is the MetaTrader4
platform from Metaquotes. This platform is called also MT4 and allows manual and
automated trading in both desktop and mobile devices.
Almost all Trading Platforms today offer features such is the use of indicators,
technical analysis tools, trading on charts, 1-click-trading, news alerts etc.
■ Learn the basics about Forex Trading at the web-site What-is-Forex.com
» What-is-Forex.com Learning
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Delays on Execution -The Slippage Factor
The delay between the time you press the button on your PC and the time your
order is actually executed in the Forex Market is called the slippage. If we measure
this delay in real time we might say that this delay is between 0.1 seconds to 1.5
seconds. Slippage is generating price manipulation and that is why it is measured in
pips. One pip equals commonly 0.0001 of the value of a currency pair. The average
slippage in the market today is between 1-2 pips.
The Importance of Tiny Segments of Time
But why should a trader even care about such a tiny delay of less than 2 seconds?
Think about that. There are numerous arbitrage systems today that are trading
Forex in timeframes measured in million-seconds. These systems constitute the so
called ‘Million-Second Forex Market’.
One (1) second for a scalping system equals 1 month for a regular trader.
Furthermore if you trade the news (News-Trader) 1 second is the difference between
making a huge profit and suffering a huge loss. News-Trading is one of the six
trading styles presented in Chapter-6.
“Time is the most disputed issue in the men’s history”
■ Find full reviews and multiple comparisons regarding Scalping Forex Trading
Systems at ForexAutomatic.com: » Forex Robots and other Automated Systems
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2. Two Categories of Forex Brokers -The
Need for Reliable and Regulated Partners
In order to trade Forex you need also a broker. Forex Brokers operate as
intermediaries between a trader and the aggregate Forex Market (The ECN network
mentioned before). Basically there are two main categories of Brokers based on their
execution model, the Dealing Desk and the No-Dealing Desk Brokers.
Two (2) General Categories of Forex Brokers
(a) Dealing Desk Brokers (DD) or Agents or Market Makers
These brokers operate as a Dealing-Desk, meaning that they are making their own
market within the Forex market. In simple words, Market Makers sum all the buying
and selling orders of their clients and execute trades instantly on both sides. Actually
they accept all orders from opposite sides and earn money by staying in the middle,
without risk. Sometimes Market Makers are trading against their clients just to fill all
their orders.
Professional traders don’t like the fact of trading against their brokers and that is
why they are constantly avoiding Dealing Desk Brokers. Dealing Desk Brokers or
Market Makers are not considered as pure Forex Brokers
Dealing Desk Brokers offer usually a wide asset index including Forex, Stocks,
Indices, Commodities and Energy trading. In general, Dealing-Desk Brokers are
considered a good choice only for beginners and semi-advanced traders. This
perception exists as Dealing-Desk Brokers offer currency pairs in wide spreads.
EURUSD for example can be found usually at 2 pips minimum. Moreover DealingDesk Brokers provide trading with slippage and re-quotes. The only important
advantage of trading with a Dealing Desk Broker is the Forex Bonus offered. DealingDesk Brokers offer very high welcome bonuses up to 100% (find Forex Bonus
Promotions later in this eBook).
■ Tip: If you want to trade with a Market Maker, choose a broker offering
withdrawable bonus. Trade your bonus as many times required and then withdraw
your funds and your bonus. It is the best chance you have to win.
(b) No-Dealing Desk Brokers (NDD) -ECN or STP Forex Brokers
In this category we find brokers that are transferring their client orders directly to
the Forex Market, meaning transferring orders directly to the Electronic Network of
Banks (ECN). The great advantage of trading with an ECN/STP broker is the low
transactional cost and the very fast order execution. Transaction cost in Forex
Trading is deriving mainly from spreads And from trading commissions charged on
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volume. Cost may be also the outcome of slippage. ECN/STP brokers offer by rule
the lowest slippage in the market.
The ECN/STP Forex brokers are the only choice of professional and advanced Forex
traders and the only choice for all those wishing to trade Forex via automatedtrading systems (explained in Chapter-7).
Note: Not all ECN/STP brokers offer good trading terms to their clients. There are
good, medium and bad performers as in every other industry.
Here are two examples of an ECN/STP Broker offering EURUSD:
i)
ii)
EURUSD spread at 1.4 pips without any trading commissions
EURUSD spread at 0.4 pips plus $3.5 commission per $100,000 volume
The Essence of Trading with Regulated Forex Companies
Reliability is priority number one when your industry is the Online Financials.
Everyone who wants to trade the world’s currencies needs a reliable Forex Broker.
There are hundreds of Forex Brokers available in the market, but it is extremely
important to trade only with those that are high regulated and reliable. Regulation
means that a company is supervised and controlled by external independent bodies.
Regulation works as a great incentive for any broker to behave ethically and respect
his client’s interests. Another factor that adds reliability to a Forex Company is the
existence of Segregated Client Bank Accounts. That means that when you make a
deposit your funds are safely deposited in an external bank. The country where a
Forex Broker is situated also matters, avoid companies situated in offshore countries.
Offshore countries are providing weak legislative frameworks regarding corporations,
and that is not good for any online trader.
Here is a list with some High-Regulated Forex Brokers offering also segregated Bank
Accounts to their Clients:
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REGULATED FOREX BROKERS LIST (NO-US CLIENTS LIST)
Here is a list of regulated Forex Brokers offering funds safety via segregated client
bank accounts.
FOREX
BROKER
SEGREGATED
REGULATED
BANK
EXECUTION
MINIMUM
WELCOME
MODEL
DEPOSIT
BONUS
ACCOUNTS
INFO
► Review
FSA UK,
XeMarkets
CySEC
Cyprus, ASIC
Broker
Yes
STP MODEL
$5
30% up to
10,000USD
»XeMarkets
Australia
Web
ASIC
► Review
Australia,
IronFx
FCA UK,
Broker
Yes
ECN / STP
$500
50%
CySEC
»Ironfx Web
Cyprus
► Review
ASIC
AvaTrade
Australia and
DEALING
Yes
DESK
CBI Ireland
$100
50% up to
10,000USD
Broker
»Avatrade
Web
► Review
Broker
MiFID
HotForex
Europe and
Yes
ECN / STP
CySEC
$5
30-100%
»HotForex
Web
FOREX BROKERS FOR US TRADERS
Here are Forex brokers for US Traders offering segregated bank accounts to their
clients.
1) ForexBrokerInc. (ECN Broker)
100% Welcome Bonus | Minimum Deposit $5
► Learn more about the Forexbroker.inc |» Visit Web-SIte
2) FinFx (ECN Broker)
No Bonus | Minimum Deposit $100
► Learn more about FinFx | » Visit Web-Site
■ Find Forex Brokers Ratings at FxPros.net
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Forming the Profile of the Perfect Forex Broker -For the
Average Trader
Here are some characteristics of the Ideal Forex Broker:
(i) Offering maximum safety of trading funds (high regulation and segregated client
bank accounts)
(ii) Offering minimal transaction cost (low spread, low commissions, no re-quotes)
(iii) Offering a wide asset index containing more than 60 currency pairs (majors,
minors and exotic pairs as mentioned before)
(iv) Offering fast order execution with minimal delays and no price manipulation
(v) Offering a good variety of trading platforms allowing mobile trading, automated
trading and scalping
(vi) Providing a variety of different deposit / withdrawal methods by not charging
commission on withdrawals or on inactive accounts
(vii) Providing fast and reliable customer service (emai, live chat and phone support)
Rating Brokers Formula by TradingCenter.org -The New and
Revolutionary Way of Rating Financial Services
Based on recent research, most of the user ratings found in the Internet today are
fake. This is happening as Online Companies pay outsiders to rate them favorably in
user-rating sites. In this uncomfortable environment the Rating Formula Series was
designed to provide a completely objective framework of rating financial services.
The Rating Formula Series includes all the major factors forming the ideal Broker.
This innovative rating formula is designed by TradingCenter.org. Here are the four
(4) generic rating categories forming the maximum rating value of 100%.
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FORMULA v.4.0 TOTAL RATING
(The structure of Rating Formula v4.0)
WEIGHT (%)
Factor-1: Safety of Funds
26.0% Rating +
Factor-2: Trading Cost
28.0% Rating +
Factor-3: Available Trading Options
26.0% Rating +
Factor-4: Technology
20.0% Rating =
100% max
Learn more about the Rating Formulas:
These are the latest versions of the Rating Formula series.
► Rating Formula v5.0 –Forex Brokers, at TradingCenter
► Rating Formula v4.0 –Forex Brokers, at TradingCenter
► Rating Formula v3.5 –Binary Options Brokers, at BinaryValue
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3. Why so many People Trade in the
Forex Market? –The Profit Potential
Two factors are forming the great Profit Potential of Forex Trading, liquidity and
trading leverage. Here is a short analysis of these two trading factors.
2.1 Forex Market Huge Liquidity and Low Cost of Transactions
As it was mentioned before the Foreign Exchange Market is really huge with daily
turnovers of more than 5 trillion US dollars. That means that there are tens of
thousands of currency buyers and currency sellers at any given second. That
enormous volume activity pushes the distance between buyers and sellers (called the
spread) in minimal ranges. The average spread on EURUSD for example is less than
2 pips. That means that if the first buyer is at 1.3800 then the first seller is at
1.3802. This distance in the example given is just 0.002, or else 2 pips spread.
Why is this fact so important? This is important because you can open and close a
trading position with an extremely low transaction cost. (i)
2.2 Multiplying Funds via the Use of Leverage
Forex trading provides the unique advantage of huge trading leverage. What does
trading leverage means? Trading leverage means that you can trade more funds that
you really hold. But what makes that advantage astonishing is the number of times
you may leverage your funds.
Most Forex Brokers today offer leverage up to 500:1. Therefore, if you open an
account with $1,000 you may trade theoretically $500,000. (ii)
By combining minimal transaction cost and high trading leverage {(i) and (ii)} it is
obvious what makes Forex Trading so lucrative and popular in a global scale.
Example:
If you open a position worth $500,000 and you gain 1.0% then your earnings are
calculated as:
■ Earnings Computation = $500,000 X 1.0% - Hypothetical Cost of Transaction =
$5,000 - $300 = $4.700
■ Your Initial investment was $1,000, so you gained 370% on your investment with
just 1.0% currency movement
Be aware that this procedure incurs high risks too, as you may win or lose money,
especially if you are not familiar with this process. This example is given to highlight
the profit potential and why Forex Trading attracts so many people worldwide.
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4. Forex Welcome Bonus -Another Great
Advantage of Forex Trading
High Deposit Bonus and No-Deposit Bonus
Forex Welcome Bonus –The Difference between a Credit Bonus and a
Withdrawable Bonus
Forex Brokers in order to attract new clients offer promotions that are called Forex
Bonuses. A common welcome bonus is 30% but it can be up to 100%.
What means 100% welcome bonus on deposit?
It means that if you are a new client and you deposit 1,000USD then the broker will
add you another 1,000USD in your account as an extra trading capital.
There are two types of Forex welcome bonus:
i)
ii)
Withdrawable Bonus (usually 30% on new deposit)
Credit Bonus (usually 50-100% on new deposit)
You may withdraw a Withdrawable Bonus by trading it several times according to the
Terms & Conditions of any promotion.
From the other hand, you can not withdraw a credit bonus but you may still
withdraw the gaining generated by a credit bonus.
Risk-Free Trading via a No-Deposit Bonus Account
Additionally, Forex Brokers in order to make traders more familiar with their
platforms offer also the so called No-Deposit Forex Bonuses. That means that you
get a bonus amount between 20-100USD just by confirming your email or phone and
without depositing any funds at all. That is an excellent risk-free way to get in touch
with Forex Trading for the first time.
Where is the Catch?
Be aware that you may withdraw a No-Deposit Forex Bonus but you must first trade
it at least 20-25 times. Anyway that is a great way to start trading without any risk.
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NO-DEPOSIT BONUS & BROKER
1) AvaTrade offers $50 No-Deposit Bonus
► Review Broker and Information | » Claim $50 Free Bonus
2) InstaForex No Deposit Bonus
► Review Broker and Information | » InstaForex Free Bonus
3) XeMarkets offers $20 for joining the innovative Trading Contest Arena
► Review Broker and Information | » XeMarkets Free Bonus
4) Markets.com $25 No-Deposit Forex Bonus
► Review Broker and Information | » Markets.com $25 Free Bonus
NO-DEPOSIT BONUS FOR US TRADERS
5) ForexBroker Inc. offers $100 No-Deposit Bonus Only for US Traders
► Review Broker and Information | » ForexBrokerInc $100 Free Bonus
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Binary Options Trading Bonus
Binary Options constitute a relative new instrument to Trade Forex and other
Financial Markets. These are some Binary Option Brokers and their bonus offerings.
Be aware that trading binary options is considerably risky.
BINARY OPTIONS
BROKER
■ GOptions
US TRADERS
Yes
TRADING
Max Payout:
90%
70+ Assets
MINIMUM
DEPOSIT & BONUS
$200
25-100% Bonus
INFORMATION
► Review
Broker
» Web-Site
■ CapitalOption
No
Max Payout:
85%
90+ Assets
$100
100% Bonus
► Review
Broker
» Web-Site
■ Banc De
Binary
No
Max Payout:
75%
90+ Assets
$250
50% Bonus
► Review
Broker
» Web-Site
■ OptionRally
No
Max Payout:
78%
70+ Assets
$200
30% Bonus
► Review
Broker
» Web-Site
■ StockPair
■ OptionsXo
Yes
No
Max Payout:
82%
120+
Assets
$200
40% Bonus
Max Payout:
89%
40+ Assets
$100
Up to 100%
Bonus
► Review
Broker
» Web-Site
► Review
Broker
» Web-Site
Note: Brokers Features & Promotions presented in this eBook may change any time.
■ Information, Reviews and Comparisons about Binary Options at Binaryvalue.com
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5. Forex Trading Rebates –Promotions
designed for Advanced Traders
What is a Forex Trading Rebate?
A Forex trading rebate means making money from your trading volumes. For
example if you have joined a rebate plan offering $5 per lot (lot = $100,000), and
during a certain month you have traded 20 lots, you earned $100. A trading rebate
has nothing to do with your overall trading performance, only volumes matter.
Where is the Catch?
There is no catch here. Simply Forex Brokers provide rebates to Professional
Investment Consultants as an incentive to introduce them new clients. A part of this
rebate is given back from those professionals to real traders. This circle of money is
called a Forex Trading Rebate.
Automatic Forex Rebates –The best way to Trade Forex
An automatic Forex Rebate means a rebate that is earned directly to your trading
account without any interventions. You need again a Professional Investment
Consultant as the intermediary.
Here are three Trading Rebate Plans from advanced ECN Brokers and information
how you can join them. All three rebates are fully automated and 100% free of any
charge (sign or other fee). Furthermore all your other trading terms on these brokers
will remain exactly the same.
ECN BROKER
REBATE PLAN
US
CLIENTS
MINIMUM
DEPOSIT
FUND
METHODS
» Learn more
here
Find more
Information
■ FinFx $0.6 /
lot discount on
ECN Accounts
FinFx
■ The same
$0.6 / lot for
ECN Pro
Finnish
Broker
Yes
Accounts
INFO
$150
Or
■ 0.25 pips
manual rebate
for Micro
Accounts
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Bank Wire,
Credit
Cards,
MoneyBook
ers
► Automatic
ECN Rebate Link
Minimum deposit
$1,000
► Automatic
ECN Pro Rebate
Link -Minimum
deposit $10,000
16
ECN BROKER
REBATE PLAN
US
CLIENTS
MINIMUM
DEPOSIT
FUND
METHODS
INFO
FINFX MINI
ACCOUNT
► Manual
Rebate Link Minimum deposit
$150
DUKASCOPY
BANK
» Learn more
here
Dukascopy
Bank
Swiss Broker
Dukascopy
Europe
Branch of
Dukascopy
Bank
■ Dukascopy
40% Rebate
No
on all
$5,000
commissions
Bank Wire,
Credit Cards
charged
■ Dukascopy
10% Rebate
No
on all
$100
commissions
charged
Bank Wire,
Credit Cards
During the
registration
process at the
step KNOW US
FROM indicate
8410 as your
Introducing Agent
► Register at
Dukascopy Bank
-Indicating
‘Known us from
IB’ 8410
DUKASCOPY
EUROPE
» Learn more
here
During the
registration
process at the
step KNOW US
FROM indicate IB8411 as your
Introducing Agent
► Automatic
Rebate link
Other Web-Sites with Forex Promotions
1) ForexBonus.info (Forex Bonus)
2) Binaryvalue.com (Binary Options Bonus)
3) You may also find promotions in the Facebook page Facebook/OnlineFx
» Visit Facebook Forex Trading
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6. Six Different Forex Trading Styles –
Select your Own Style
These are the six main categories of Forex Traders (Trading Styles):
1. Curry Traders (Long Traders)
WHAT THEY DO?
They open positions lasting from 1 month to 9 months and aim to exploit
inefficiencies’ in the level of interest rates between two economies. They usually like
to buy currencies offering huge interest rates (10-15%) and at the same time sell
currencies offering lower interest rates. This difference can be transformed into huge
profits for those who know how and when to trade it.
REQUIREMENTS:
When you open a position in the Forex Market that remains open more than 1 day
you pay or get paid what is called as the Swap value. Swap charges are calculated
based on the level of interest rates between two currencies. These interest rate
differences can sometimes work for you and some other times against you.
Therefore if you trade long you need a Forex Broker offering the best terms as
concerns the swap charges. Additionally you need a broker offering a wide asset
index. An asset index is the portfolio of currency choices that you will be able to
trade. This asset index varies depending on your broker. The more currency choices
you have the easier it will be for you to exploit interest rate inefficiencies. When you
trade long, you don’t care about the spreads, the technology, delays etc.
It is essential that a long-trader must be able to understand fundamental analysis
and the correlation between inflation, interest rates and the current Forex currency
rates. I would need another eBook just to explain this correlation furthermore.
2. Swing Traders
WHAT THEY DO?
They open and close positions lasting from 1 day to 15 days. They aim to exploit
mid-term trends because 1 week is considered mid-term in Forex Trading. Swing
traders are some of the most successful Forex Traders there is. They avoid trading
intraday as they don’t like the so called ‘market noise’ of intraday trading.
REQUIREMENTS:
Swing trading is one of the best ways to trade Forex. In order to evolve as a Swing
Trader you need a little bit about everything. You need narrow spreads, reasonable
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swap charges, relative good technology and also a broker offering a wide asset
index. Swing traders are using both technical and fundamental analysis.
3. Intraday / Short Traders
WHAT THEY DO?
They open and close positions in the same day. This type of Forex traders is focusing
solely on technical analysis. Short-traders use either their own system to trade or
they pay a monthly subscription to an external signaling service. The alerts of
signaling services are delivered via SMS, email, Facebook, Member’s Area etc.
Information about Live Forex Signaling Systems is found in Chapter-7.
REQUIREMENTS:
Basically two things really matter. First of all you need the perfect technology with
minimal delays. Secondly you need a Forex Broker offering very tight spreads and
small trading commissions. Short-Trading is all about paying minimal cost. If you
want to evolve as an Intraday Trader, think about joining a trading rebate plan too.
A trading rebate can minimize your trading cost. You may find three ECN rebate
plans at the Chapter-5 of this eBook.
4. News Traders
WHAT THEY DO?
They are trading important news and events, perfect information and top technology
are considered absolutely a ‘must’ for News-Traders.
REQUIREMENTS:
The same requirements needed as the Intraday Traders (News-Traders are Intraday
Traders too).
5. Forex Scalpers
WHAT THEY DO?
As it was mentioned in Chapter-1, scalpers open and close positions in tiny
timeframes lasting less than one minute. They aim to ‘scalp’ the market and earn 210 pips.
REQUIREMENTS:
Scalpers need perfect technology and minimal transaction cost -But all that is needed
in a much higher extend than the case of the usual intraday trader. Usually scalpers
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are not trading Forex manually but instead they trade via the use of an automated
system (copier or Robot). You can learn about automated scalping systems in the
Chapter-7 of this eBook.
Keep in mind that usually scalpers trade exclusively three currency pairs. The reason
is that these 3 pairs enjoy high liquidity and therefore minimal transaction cost:
i) Euro against the US Dollar (EUR/USD)
ii) British Pound against the US Dollar (GBPUSD)
iii) US Dollar against the Japanese Yen (USD/JPY)
6. Copy Traders / Social Traders
WHAT THEY DO?
Following (copying) the trading activity of other traders. This procedure is also called
as Social Trading (nothing to do with common Social Media).
REQUIREMENTS:
Social trading is booming nowadays. In order to make money from this type of
trading you need a social trading platform, for example ZuluTrade and MirrorTrader.
Social trading platforms are again free to download and to use.
► The ZuluTrade Platform
Furthermore you need good technology too, but most importantly you need an
excellent instinct to select the perfect signal provider. All social trading platforms
offer the chance of monitoring the past performance of any signal provider. You can
also compare providers based on your criteria.
Forex Guide v1.0 – Qexpert.com
20
7. Live Forex Trading Signals & Forex
Robots
(i) Live Forex Trading Signals
What is a Live Forex Trading Signal?
A Live Forex trading signal is an alert for buying or selling a Forex Currency Pair. This
alert can be delivered either manually or automatically. Manual alerts are delivered
via classic methods as email, Facebook, SMS, twitter, member’s area etc. Automatic
alerts are delivered via a signal copier. Usually automated trading signals are based
on MetaTrader4.
Which are the Criteria When Choosing a Forex Signaling Service?
A Forex signaling service is provided usually for a monthly subscription between 50150 USD. First of all you must focus on a service that is able to cover all your needs
(manual or automated trading, delivery method, frequency of signals etc).
Furthermore, it is important to focus also on the past performance of each service.
Sometimes, these services offer also a trial period of a few days.
Here is a list with popular Forex Signal Providers:
SIGNAL
STYLE
TRADING
PROVIDER
■ Automated
Trading
■ Manual
■ Forex
Trading
Currencies
■ News
■ Gold
SIGNALS &
Trading
MENTORING
Trading
■ Social
■ Stocks &
CLUB
Trading
Indices
■ Forums
Trading
with Signals
and Reports
■ Learning
■ Forex
■ Desktop
Currencies
Trading
■ Futures
Software
TRADE MINER
Trading
■ Manual
■ Stocks
Trading
Trading
■ Forex
MBFX TRADING ■ Manual
COST
■ 77 USD
per month
■ 97 USD
for one-time
■ 97 USD
Forex Guide v1.0 – Qexpert.com
INFORMATION
► Review System
» Visit Web
► Review System
» Visit Web
► Review System
21
SIGNAL
PROVIDER
STYLE
Trading
■ SMS Alerts
AUTO BINARY
OPTIONS
SIGNALS
ELITE SIGNALS
FX TRENDY
SYSTEM
■ Manual
Trading
■ SMS Alerts
■ eMail Alerts
■ Automated
Trading
■ Manual
Trading
■ Manual
Trading
■ eMail Alerts
TRADING
Currencies
■ Gold
Trading
■ Stocks
Trading
BINARY
OPTIONS
TRADING
■ Forex
Currencies
■ Stocks &
Indices
Trading
■ Forex
Currencies
■ Gold
Trading
■ Forex
Currencies
COST
INFORMATION
for one-time
» Visit Web
■ 120 USD
for one-time
■ 49 USD
per month
■ 37 USD
every 3months
Forex Guide v1.0 – Qexpert.com
► Review System
» Visit Web
► Review System
» Visit Web
► Review System
» Visit Web
22
(ii) Forex Robots (Expert Advisors)
What is a Forex Robot?
A Forex Robot (or else an Expert Advisor) is a piece of software that plugs in a
Trading Platform in order to trade Forex automatically. These systems are usually
running on Metatrader4. If you want to trade using a Forex Robot you need top
technology and probably a VPS hosting service (explained later).
The Criteria When Choosing a Forex Robot
A Forex Robot is designed to perform a very difficult task so there are many
parameters defining your best choice. Here are some important factors that must be
taken into consideration:
(1) Past Performance of the Robot
(2) Who is the Developer?
(3) What is the average frequency of trading?
(4) Is there any Money Management Mechanism (spread and slippage control etc.)
(5) What is the Price of this system? Can I use it in more than one Live Account?
(6) Does my broker allow the use of a Forex Robot? (usually ECN /STP brokers allow
trading via the use of Forex robots)
(7) Is my broker suitable for automated trading? (spreads, execution speed etc)
(8) Will I need a VPS hosting service? (probably the answer is yes)
Furthermore:
(9) Test always any system in a demo account before using it in a real trading
account.
(10) Never mix the use of a Forex robot with other trading activity, it may confuse
the robot’s Money-Management System
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23
POPULAR FOR ROBOTS (EXPERT ADVISORS)
Here is a list with popular Forex Robots (Expert Advisors):
FOREX ROBOT
FAP TURBO
FOREX ROBOT
WALLSTREET
ROBOT
GPS FOREX
STYLE
■ Scalping
many Forex
Currencies
in the M15
Chart
■ Scalping:
EUR/USD,
GBP/USD,
USD/JPY,
USD/CHF,
AUD/USD,
NZD/USD
■ Scalping
many
currencies
during the
Asian
Session
VOLATILITY
ROBOT
■ Scalping
only
EUR/USD,
GBP/USD
FX MEGADROID
■ Scalping
only
EURUSD
PLATFORM
■ MetaTrader4
■ MetaTrader4
■ MetaTrader5
■ MetaTrader4
■ MetaTrader5
■ MetaTrader4
■ MetaTrader4
■ ZuluTrade
ONE-TIME
COST
■ 149 USD
for one-time
■ Free
Lifetime
Updates
■ 1 Forex
License
■ 299 USD
for one tine
■ 3 Forex
Licenses
■ Free the
Omega
Indicator
■ 149 USD
for one time
■ 1 Forex
Account
License
■ 190 USD
for one time
■ 1 Forex
Account
License
■ 67 USD
for one time
INFO
► Review System
» Visit Web
► Review System
» Visit Web
► Review System
» Visit Web
► Review System
» Visit Web
► Review System
» Visit Web
■ Find Expert Advisors and Trading Systems Reviews at ForexAutomatic.com
What is a VPS Hosting Service?
In order a Forex Robot to trade effectively it requires to remain active 24 hours per
day. This problem can be solved via the use of a VPS. A VPS is an external hosting
service that allows the Robot to trade 24 hours per day without having your PC,
Laptop or Tablet turned on.
A VPS usually costs about $40 per month but certain brokers offer that service for
free.
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24
8. Forex Trading Resources
(i) Major Currency Symbols
CURRENCY
CODE
SYMBOL
FOREX SLANG
US DOLLAR
USD
$
Dollar Buck
EUROPEAN EURO
EUR
€
Fiber
SWISS FRANC
CHF
CHF
Swissy
BRITISH STERLING
GBP
Cable
JAPANESE YEN
JPY
£
¥
CANADIAN DOLLAR
CAD
$
Loonie
AUSTRALIAN DOLLAR
AUD
$
Aussie
NEW ZEELAND DOLLAR
NZD
$
Kiwi
Yen
(ii) Six (6) Main Types of Trading Orders
These are the six (6) important order types when trading Forex:
(1) Market Order
Buying or selling a currency pair at the current market price.
(2) Limit Order
Buying or selling a currency pair at a pre-determined (limited) price.
(3) Stop-Loss Order
A stop-loss is the most important order type. A stop-loss sets a limit to the maximum
amount you are willing to risk in any trade.
(4) Target Profit Order
This common order sets your targeted price level. It pre-determines your profit
potential.
(5) Limit Entry & Stop-Entry
Buy or sell a currency pair below or above the market at a pre-specified level.
(6) OCO Order
OCO means One-Cancels-Other. Based on this order if a trade is executed then
another trade is automatically cancelled.
(7) GTC Order
GTC means Good-Till-Cancelled. A GTC order remains in the market active until it is
either filled or cancelled.
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(iii) Currency Pairs and Changes in Historic Volumes
Source: Aite Group ‘Global FX Market Update 2013: Increased Market Transparency, More Competition’
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26
(iv) Forex Calendar / Heat Map
This Forex Heat Map Table is based on statistics between the years (2000-2013).
The full research was published on www.TradingCenter.org.
Source: ForexAutomatic.com / TradingCenter.org
Forex Guide v1.0 – Qexpert.com
27
© George Protonotarios 2014
COPYRIGHT INFORMATION
ALL RIGHTS RESERVED. No part of this eBook (including text, information,
tables, analysis, resources and images) may be copied, reproduced, mirrored
or sold.
DISCLAIMER AND LEGAL NOTICE
The information presented in this eBook represents the view of the author.
Every attempt has been made by the author to verify all information included
in this eBook, but there is no guarantee about the accuracy and the reliability
of any information presented in this eBook. In addition, this Forex Guide
includes affiliate links. This eBook is not intended for use as a source of
financial or investment advice.
RISK WARNING
There is considerable exposure to risk when trading Forex, Futures and
Options. Trading Forex and other leveraged products involves a significant
level of risk and is not suitable for all investors. Before undertaking any such
transactions you should ensure that you fully understand the risks involved
and seek independent advice if necessary. The possibility always exists that
you could sustain a substantial loss. Never trade with funds that you may
need in the future. Past performance is not necessarily indicative of future
results. Any opinions, suggestions, brokers, systems, services, software,
reviews, promotions, bonus, rebates, links and web-sites mentioned on this
eBook are provided as general market commentary, and do not constitute
investment advice in any way.
Forex Trading Guide v1.0 - Copyright © February 2014
George Protonotarios -All rights reserved worldwide
Distribution by Qexpert.com
www.Qexpert.com
Forex Advertising & Web-Sites
Forex Guide v1.0 – Qexpert.com
28
FOREX TRADING GUIDE
FOR BEGINNERS & SEMI-ADVANCED TRADERS
Foreign Exchange Trading Guide
v1.0
“Making Money by Trading Forex Currencies”
Forex Trading Guide v1.0 -Copyright © February 2014
George Protonotarios ©-All rights reserved worldwide
Distribution by Qexpert.com
www.Qexpert.com
Forex Advertising
FOREX TRADING GUIDE
“How to Make Money by Trading Forex Currencies”
The Basics for Beginners and
Semi-Advanced Traders
-TABLE OF CONTENTS1. What is Forex all About? ...............................................
2. Two Categories of Forex Brokers..............................
3. Why so many People Trade Forex? .........................
4. Forex Bonus Promotions................................................
5. Forex Trading Rebates....................................................
6. Six Different Forex Trading Styles............................
7. Live Trading Signals & Forex Robots.......................
8. Useful Forex Trading Resources.................................
Forex Guide v1.0 – Qexpert.com
2
1. What is Forex All About?
Forex means FOReign EXchange and it is a global market where the world’s
currencies are traded, one currency against another. Central Banks, Commercial
Banks, Large and Small Corporations, Institutional Investors, Individual Traders and
Common Tourists occasionally need to exchange one currency for another.
Examples:
Take for example an importer who is based in the US and wants to import 5
Mercedes Trucks from Germany. He must exchange US Dollars for the European
Currency (EUR) in order to pay for his import, so he must make a transaction in the
Forex Market.
■ Importer Buys EUR and sells USD
In the opposite example, a tourist from Germany wants to visit New York so in order
to pay for his hotel he must exchange Euros for US Dollars. This transaction will also
be made in the Forex market.
■ Tourist Buys USD and sells EUR
Forex Currency Pairs & Main Categories
Currencies are traded in pairs, you buy one and at the same time you sell another
currency. In any currency pair (in the above example EURUSD) the purchased
currency is called the Base Currency (EUR) and the sold currency is called the Quote
Currency (USD).
There are three Main Categories of Forex Currencies:
i)
ii)
iii)
Forex Majors (the most popular and traded pairs: EURUSD, GBPUSD,
USDJPY, USDCHF, USDCAD, AUDUSD and NZDUSD)
Forex Minors (less popular pairs and thus more expensive to trade)
Forex Exotics (no-popularity and thus very expensive to trade)
What is a Forex Lot?
A Forex Lot is the standard unit size of a Forex transaction. There are 3 different lot
sizes:
■ Micro Lot Size (equals $1,000) → Suitable for Forex Beginners
■ Mini Lot Size (equals $10,000) → Suitable for Semi-Advanced Forex Traders
■ Standard Lot Size (equals $100,000) → Suitable for Advanced and Pro Traders
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3
But where is the opportunity to make money after all?
Currencies are not traded in fixed prices -instead they are part of a free floating
trading system. Every order for buying / selling a Forex currency is a factor creating
either demand or supply in the market. Even tiny fluctuations in this free-floating
system can be transformed into huge profits using the ability of trading leverage (as
it will be described afterwards in Chapter-3).
Where is the Forex Market Situated?
All currency transactions take place within the Forex Market. Where is Forex
situated? Actually nowhere specifically, Forex operates as a non-centralized network
such is the World Wide Web. All transactions are executed within the Electronic
Network of Banks (called the ECN network). There are of course several physical
Financial Centers around the world. These financial centers are found in major
capital cities such is New York, London, Tokyo, Sydney etc.
Today Foreign Exchange is by far the largest market in the world. Forex has become
so huge that volumes exceed today 5 trillion USD only in a single day.
Forex Market Trading Hours
The Foreign Exchange market is open 24/5 between Mondays to Fridays. The Forex
daily activity is divided into 4 separate sessions:
(1)
(2)
(3)
(4)
New York Session, 8:00 am to 5:00 pm EST
Tokyo Session, 7:00 pm to 4:00 am EST
Sydney Session, 5:00 pm to 2:00 am EST
London Session, 3:00 am to 12:00 noon EST
Forex Market Overlaps
Forex overlaps occur when two of the above sessions are opened simultaneously.
Here are the three Forex Session Overlaps:
(i) New York and London Session Overlap: 8:00 am to 12:00 noon EST
(ii) Sydney and Tokyo Session Overlap: 7:00 pm to 2:00 am EST
(iii) London and Tokyo Session Overlap: 3:00 am to 4:00am EST
During these overlaps, both trading activity and market liquidity are maximized.
Many traders select to execute orders only during these overlaps.
To highlight the importance of time when trading Forex, just think that there are
automated systems trading exclusively the London and Tokyo Overlap. That means
that during the other sessions remain inactive.
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4
Moreover, there are automated systems trading only as the Asian Session begins.
These short-trading systems are commonly scalping the market. Many of these
Scalping Systems are presented in Chapter-7.
So What is Forex Scalping Then?
Scalping is a promising way of trading Forex based on the assumption that you hold
state-of-the-art trading technology and the right system to do the job. Scalping
Forex means opening and closing trading positions lasting less than one minute and
targeting returns as low as 0.001%. Those traders who scalp the market are called
scalpers. This is a common trading style and you may find more trading styles at
Chapter-6.
Why should anyone targeting tiny returns of 0.01%?
Wait until the next chapter, the chapter about trading leverage, and you will
understand the reason why.
Online Forex Platforms
What is a Forex Trading Platform?
A Forex Trading platform is simply your ticket to Online Forex Trading. A Trading
Platform is working like a bridge between you and your Forex Broker. When you
execute a trading order (for example selling British Sterling against the US Dollar)
this order is passing instantly from your platform to your broker. Then again almost
instantly it is passing to the Forex Market.
The fantastic thing is that almost all Forex Trading Platforms (Desktop and Mobile)
are offered for free to download and to use. Freeware and open source software
matters when you trade Forex. The industry’s standard platform is the MetaTrader4
platform from Metaquotes. This platform is called also MT4 and allows manual and
automated trading in both desktop and mobile devices.
Almost all Trading Platforms today offer features such is the use of indicators,
technical analysis tools, trading on charts, 1-click-trading, news alerts etc.
■ Learn the basics about Forex Trading at the web-site What-is-Forex.com
» What-is-Forex.com Learning
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5
Delays on Execution -The Slippage Factor
The delay between the time you press the button on your PC and the time your
order is actually executed in the Forex Market is called the slippage. If we measure
this delay in real time we might say that this delay is between 0.1 seconds to 1.5
seconds. Slippage is generating price manipulation and that is why it is measured in
pips. One pip equals commonly 0.0001 of the value of a currency pair. The average
slippage in the market today is between 1-2 pips.
The Importance of Tiny Segments of Time
But why should a trader even care about such a tiny delay of less than 2 seconds?
Think about that. There are numerous arbitrage systems today that are trading
Forex in timeframes measured in million-seconds. These systems constitute the so
called ‘Million-Second Forex Market’.
One (1) second for a scalping system equals 1 month for a regular trader.
Furthermore if you trade the news (News-Trader) 1 second is the difference between
making a huge profit and suffering a huge loss. News-Trading is one of the six
trading styles presented in Chapter-6.
“Time is the most disputed issue in the men’s history”
■ Find full reviews and multiple comparisons regarding Scalping Forex Trading
Systems at ForexAutomatic.com: » Forex Robots and other Automated Systems
Forex Guide v1.0 – Qexpert.com
6
2. Two Categories of Forex Brokers -The
Need for Reliable and Regulated Partners
In order to trade Forex you need also a broker. Forex Brokers operate as
intermediaries between a trader and the aggregate Forex Market (The ECN network
mentioned before). Basically there are two main categories of Brokers based on their
execution model, the Dealing Desk and the No-Dealing Desk Brokers.
Two (2) General Categories of Forex Brokers
(a) Dealing Desk Brokers (DD) or Agents or Market Makers
These brokers operate as a Dealing-Desk, meaning that they are making their own
market within the Forex market. In simple words, Market Makers sum all the buying
and selling orders of their clients and execute trades instantly on both sides. Actually
they accept all orders from opposite sides and earn money by staying in the middle,
without risk. Sometimes Market Makers are trading against their clients just to fill all
their orders.
Professional traders don’t like the fact of trading against their brokers and that is
why they are constantly avoiding Dealing Desk Brokers. Dealing Desk Brokers or
Market Makers are not considered as pure Forex Brokers
Dealing Desk Brokers offer usually a wide asset index including Forex, Stocks,
Indices, Commodities and Energy trading. In general, Dealing-Desk Brokers are
considered a good choice only for beginners and semi-advanced traders. This
perception exists as Dealing-Desk Brokers offer currency pairs in wide spreads.
EURUSD for example can be found usually at 2 pips minimum. Moreover DealingDesk Brokers provide trading with slippage and re-quotes. The only important
advantage of trading with a Dealing Desk Broker is the Forex Bonus offered. DealingDesk Brokers offer very high welcome bonuses up to 100% (find Forex Bonus
Promotions later in this eBook).
■ Tip: If you want to trade with a Market Maker, choose a broker offering
withdrawable bonus. Trade your bonus as many times required and then withdraw
your funds and your bonus. It is the best chance you have to win.
(b) No-Dealing Desk Brokers (NDD) -ECN or STP Forex Brokers
In this category we find brokers that are transferring their client orders directly to
the Forex Market, meaning transferring orders directly to the Electronic Network of
Banks (ECN). The great advantage of trading with an ECN/STP broker is the low
transactional cost and the very fast order execution. Transaction cost in Forex
Trading is deriving mainly from spreads And from trading commissions charged on
Forex Guide v1.0 – Qexpert.com
7
volume. Cost may be also the outcome of slippage. ECN/STP brokers offer by rule
the lowest slippage in the market.
The ECN/STP Forex brokers are the only choice of professional and advanced Forex
traders and the only choice for all those wishing to trade Forex via automatedtrading systems (explained in Chapter-7).
Note: Not all ECN/STP brokers offer good trading terms to their clients. There are
good, medium and bad performers as in every other industry.
Here are two examples of an ECN/STP Broker offering EURUSD:
i)
ii)
EURUSD spread at 1.4 pips without any trading commissions
EURUSD spread at 0.4 pips plus $3.5 commission per $100,000 volume
The Essence of Trading with Regulated Forex Companies
Reliability is priority number one when your industry is the Online Financials.
Everyone who wants to trade the world’s currencies needs a reliable Forex Broker.
There are hundreds of Forex Brokers available in the market, but it is extremely
important to trade only with those that are high regulated and reliable. Regulation
means that a company is supervised and controlled by external independent bodies.
Regulation works as a great incentive for any broker to behave ethically and respect
his client’s interests. Another factor that adds reliability to a Forex Company is the
existence of Segregated Client Bank Accounts. That means that when you make a
deposit your funds are safely deposited in an external bank. The country where a
Forex Broker is situated also matters, avoid companies situated in offshore countries.
Offshore countries are providing weak legislative frameworks regarding corporations,
and that is not good for any online trader.
Here is a list with some High-Regulated Forex Brokers offering also segregated Bank
Accounts to their Clients:
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8
REGULATED FOREX BROKERS LIST (NO-US CLIENTS LIST)
Here is a list of regulated Forex Brokers offering funds safety via segregated client
bank accounts.
FOREX
BROKER
SEGREGATED
REGULATED
BANK
EXECUTION
MINIMUM
WELCOME
MODEL
DEPOSIT
BONUS
ACCOUNTS
INFO
► Review
FSA UK,
XeMarkets
CySEC
Cyprus, ASIC
Broker
Yes
STP MODEL
$5
30% up to
10,000USD
»XeMarkets
Australia
Web
ASIC
► Review
Australia,
IronFx
FCA UK,
Broker
Yes
ECN / STP
$500
50%
CySEC
»Ironfx Web
Cyprus
► Review
ASIC
AvaTrade
Australia and
DEALING
Yes
DESK
CBI Ireland
$100
50% up to
10,000USD
Broker
»Avatrade
Web
► Review
Broker
MiFID
HotForex
Europe and
Yes
ECN / STP
CySEC
$5
30-100%
»HotForex
Web
FOREX BROKERS FOR US TRADERS
Here are Forex brokers for US Traders offering segregated bank accounts to their
clients.
1) ForexBrokerInc. (ECN Broker)
100% Welcome Bonus | Minimum Deposit $5
► Learn more about the Forexbroker.inc |» Visit Web-SIte
2) FinFx (ECN Broker)
No Bonus | Minimum Deposit $100
► Learn more about FinFx | » Visit Web-Site
■ Find Forex Brokers Ratings at FxPros.net
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9
Forming the Profile of the Perfect Forex Broker -For the
Average Trader
Here are some characteristics of the Ideal Forex Broker:
(i) Offering maximum safety of trading funds (high regulation and segregated client
bank accounts)
(ii) Offering minimal transaction cost (low spread, low commissions, no re-quotes)
(iii) Offering a wide asset index containing more than 60 currency pairs (majors,
minors and exotic pairs as mentioned before)
(iv) Offering fast order execution with minimal delays and no price manipulation
(v) Offering a good variety of trading platforms allowing mobile trading, automated
trading and scalping
(vi) Providing a variety of different deposit / withdrawal methods by not charging
commission on withdrawals or on inactive accounts
(vii) Providing fast and reliable customer service (emai, live chat and phone support)
Rating Brokers Formula by TradingCenter.org -The New and
Revolutionary Way of Rating Financial Services
Based on recent research, most of the user ratings found in the Internet today are
fake. This is happening as Online Companies pay outsiders to rate them favorably in
user-rating sites. In this uncomfortable environment the Rating Formula Series was
designed to provide a completely objective framework of rating financial services.
The Rating Formula Series includes all the major factors forming the ideal Broker.
This innovative rating formula is designed by TradingCenter.org. Here are the four
(4) generic rating categories forming the maximum rating value of 100%.
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10
FORMULA v.4.0 TOTAL RATING
(The structure of Rating Formula v4.0)
WEIGHT (%)
Factor-1: Safety of Funds
26.0% Rating +
Factor-2: Trading Cost
28.0% Rating +
Factor-3: Available Trading Options
26.0% Rating +
Factor-4: Technology
20.0% Rating =
100% max
Learn more about the Rating Formulas:
These are the latest versions of the Rating Formula series.
► Rating Formula v5.0 –Forex Brokers, at TradingCenter
► Rating Formula v4.0 –Forex Brokers, at TradingCenter
► Rating Formula v3.5 –Binary Options Brokers, at BinaryValue
Forex Guide v1.0 – Qexpert.com
11
3. Why so many People Trade in the
Forex Market? –The Profit Potential
Two factors are forming the great Profit Potential of Forex Trading, liquidity and
trading leverage. Here is a short analysis of these two trading factors.
2.1 Forex Market Huge Liquidity and Low Cost of Transactions
As it was mentioned before the Foreign Exchange Market is really huge with daily
turnovers of more than 5 trillion US dollars. That means that there are tens of
thousands of currency buyers and currency sellers at any given second. That
enormous volume activity pushes the distance between buyers and sellers (called the
spread) in minimal ranges. The average spread on EURUSD for example is less than
2 pips. That means that if the first buyer is at 1.3800 then the first seller is at
1.3802. This distance in the example given is just 0.002, or else 2 pips spread.
Why is this fact so important? This is important because you can open and close a
trading position with an extremely low transaction cost. (i)
2.2 Multiplying Funds via the Use of Leverage
Forex trading provides the unique advantage of huge trading leverage. What does
trading leverage means? Trading leverage means that you can trade more funds that
you really hold. But what makes that advantage astonishing is the number of times
you may leverage your funds.
Most Forex Brokers today offer leverage up to 500:1. Therefore, if you open an
account with $1,000 you may trade theoretically $500,000. (ii)
By combining minimal transaction cost and high trading leverage {(i) and (ii)} it is
obvious what makes Forex Trading so lucrative and popular in a global scale.
Example:
If you open a position worth $500,000 and you gain 1.0% then your earnings are
calculated as:
■ Earnings Computation = $500,000 X 1.0% - Hypothetical Cost of Transaction =
$5,000 - $300 = $4.700
■ Your Initial investment was $1,000, so you gained 370% on your investment with
just 1.0% currency movement
Be aware that this procedure incurs high risks too, as you may win or lose money,
especially if you are not familiar with this process. This example is given to highlight
the profit potential and why Forex Trading attracts so many people worldwide.
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4. Forex Welcome Bonus -Another Great
Advantage of Forex Trading
High Deposit Bonus and No-Deposit Bonus
Forex Welcome Bonus –The Difference between a Credit Bonus and a
Withdrawable Bonus
Forex Brokers in order to attract new clients offer promotions that are called Forex
Bonuses. A common welcome bonus is 30% but it can be up to 100%.
What means 100% welcome bonus on deposit?
It means that if you are a new client and you deposit 1,000USD then the broker will
add you another 1,000USD in your account as an extra trading capital.
There are two types of Forex welcome bonus:
i)
ii)
Withdrawable Bonus (usually 30% on new deposit)
Credit Bonus (usually 50-100% on new deposit)
You may withdraw a Withdrawable Bonus by trading it several times according to the
Terms & Conditions of any promotion.
From the other hand, you can not withdraw a credit bonus but you may still
withdraw the gaining generated by a credit bonus.
Risk-Free Trading via a No-Deposit Bonus Account
Additionally, Forex Brokers in order to make traders more familiar with their
platforms offer also the so called No-Deposit Forex Bonuses. That means that you
get a bonus amount between 20-100USD just by confirming your email or phone and
without depositing any funds at all. That is an excellent risk-free way to get in touch
with Forex Trading for the first time.
Where is the Catch?
Be aware that you may withdraw a No-Deposit Forex Bonus but you must first trade
it at least 20-25 times. Anyway that is a great way to start trading without any risk.
Forex Guide v1.0 – Qexpert.com
13
NO-DEPOSIT BONUS & BROKER
1) AvaTrade offers $50 No-Deposit Bonus
► Review Broker and Information | » Claim $50 Free Bonus
2) InstaForex No Deposit Bonus
► Review Broker and Information | » InstaForex Free Bonus
3) XeMarkets offers $20 for joining the innovative Trading Contest Arena
► Review Broker and Information | » XeMarkets Free Bonus
4) Markets.com $25 No-Deposit Forex Bonus
► Review Broker and Information | » Markets.com $25 Free Bonus
NO-DEPOSIT BONUS FOR US TRADERS
5) ForexBroker Inc. offers $100 No-Deposit Bonus Only for US Traders
► Review Broker and Information | » ForexBrokerInc $100 Free Bonus
Forex Guide v1.0 – Qexpert.com
14
Binary Options Trading Bonus
Binary Options constitute a relative new instrument to Trade Forex and other
Financial Markets. These are some Binary Option Brokers and their bonus offerings.
Be aware that trading binary options is considerably risky.
BINARY OPTIONS
BROKER
■ GOptions
US TRADERS
Yes
TRADING
Max Payout:
90%
70+ Assets
MINIMUM
DEPOSIT & BONUS
$200
25-100% Bonus
INFORMATION
► Review
Broker
» Web-Site
■ CapitalOption
No
Max Payout:
85%
90+ Assets
$100
100% Bonus
► Review
Broker
» Web-Site
■ Banc De
Binary
No
Max Payout:
75%
90+ Assets
$250
50% Bonus
► Review
Broker
» Web-Site
■ OptionRally
No
Max Payout:
78%
70+ Assets
$200
30% Bonus
► Review
Broker
» Web-Site
■ StockPair
■ OptionsXo
Yes
No
Max Payout:
82%
120+
Assets
$200
40% Bonus
Max Payout:
89%
40+ Assets
$100
Up to 100%
Bonus
► Review
Broker
» Web-Site
► Review
Broker
» Web-Site
Note: Brokers Features & Promotions presented in this eBook may change any time.
■ Information, Reviews and Comparisons about Binary Options at Binaryvalue.com
Forex Guide v1.0 – Qexpert.com
15
5. Forex Trading Rebates –Promotions
designed for Advanced Traders
What is a Forex Trading Rebate?
A Forex trading rebate means making money from your trading volumes. For
example if you have joined a rebate plan offering $5 per lot (lot = $100,000), and
during a certain month you have traded 20 lots, you earned $100. A trading rebate
has nothing to do with your overall trading performance, only volumes matter.
Where is the Catch?
There is no catch here. Simply Forex Brokers provide rebates to Professional
Investment Consultants as an incentive to introduce them new clients. A part of this
rebate is given back from those professionals to real traders. This circle of money is
called a Forex Trading Rebate.
Automatic Forex Rebates –The best way to Trade Forex
An automatic Forex Rebate means a rebate that is earned directly to your trading
account without any interventions. You need again a Professional Investment
Consultant as the intermediary.
Here are three Trading Rebate Plans from advanced ECN Brokers and information
how you can join them. All three rebates are fully automated and 100% free of any
charge (sign or other fee). Furthermore all your other trading terms on these brokers
will remain exactly the same.
ECN BROKER
REBATE PLAN
US
CLIENTS
MINIMUM
DEPOSIT
FUND
METHODS
» Learn more
here
Find more
Information
■ FinFx $0.6 /
lot discount on
ECN Accounts
FinFx
■ The same
$0.6 / lot for
ECN Pro
Finnish
Broker
Yes
Accounts
INFO
$150
Or
■ 0.25 pips
manual rebate
for Micro
Accounts
Forex Guide v1.0 – Qexpert.com
Bank Wire,
Credit
Cards,
MoneyBook
ers
► Automatic
ECN Rebate Link
Minimum deposit
$1,000
► Automatic
ECN Pro Rebate
Link -Minimum
deposit $10,000
16
ECN BROKER
REBATE PLAN
US
CLIENTS
MINIMUM
DEPOSIT
FUND
METHODS
INFO
FINFX MINI
ACCOUNT
► Manual
Rebate Link Minimum deposit
$150
DUKASCOPY
BANK
» Learn more
here
Dukascopy
Bank
Swiss Broker
Dukascopy
Europe
Branch of
Dukascopy
Bank
■ Dukascopy
40% Rebate
No
on all
$5,000
commissions
Bank Wire,
Credit Cards
charged
■ Dukascopy
10% Rebate
No
on all
$100
commissions
charged
Bank Wire,
Credit Cards
During the
registration
process at the
step KNOW US
FROM indicate
8410 as your
Introducing Agent
► Register at
Dukascopy Bank
-Indicating
‘Known us from
IB’ 8410
DUKASCOPY
EUROPE
» Learn more
here
During the
registration
process at the
step KNOW US
FROM indicate IB8411 as your
Introducing Agent
► Automatic
Rebate link
Other Web-Sites with Forex Promotions
1) ForexBonus.info (Forex Bonus)
2) Binaryvalue.com (Binary Options Bonus)
3) You may also find promotions in the Facebook page Facebook/OnlineFx
» Visit Facebook Forex Trading
Forex Guide v1.0 – Qexpert.com
17
6. Six Different Forex Trading Styles –
Select your Own Style
These are the six main categories of Forex Traders (Trading Styles):
1. Curry Traders (Long Traders)
WHAT THEY DO?
They open positions lasting from 1 month to 9 months and aim to exploit
inefficiencies’ in the level of interest rates between two economies. They usually like
to buy currencies offering huge interest rates (10-15%) and at the same time sell
currencies offering lower interest rates. This difference can be transformed into huge
profits for those who know how and when to trade it.
REQUIREMENTS:
When you open a position in the Forex Market that remains open more than 1 day
you pay or get paid what is called as the Swap value. Swap charges are calculated
based on the level of interest rates between two currencies. These interest rate
differences can sometimes work for you and some other times against you.
Therefore if you trade long you need a Forex Broker offering the best terms as
concerns the swap charges. Additionally you need a broker offering a wide asset
index. An asset index is the portfolio of currency choices that you will be able to
trade. This asset index varies depending on your broker. The more currency choices
you have the easier it will be for you to exploit interest rate inefficiencies. When you
trade long, you don’t care about the spreads, the technology, delays etc.
It is essential that a long-trader must be able to understand fundamental analysis
and the correlation between inflation, interest rates and the current Forex currency
rates. I would need another eBook just to explain this correlation furthermore.
2. Swing Traders
WHAT THEY DO?
They open and close positions lasting from 1 day to 15 days. They aim to exploit
mid-term trends because 1 week is considered mid-term in Forex Trading. Swing
traders are some of the most successful Forex Traders there is. They avoid trading
intraday as they don’t like the so called ‘market noise’ of intraday trading.
REQUIREMENTS:
Swing trading is one of the best ways to trade Forex. In order to evolve as a Swing
Trader you need a little bit about everything. You need narrow spreads, reasonable
Forex Guide v1.0 – Qexpert.com
18
swap charges, relative good technology and also a broker offering a wide asset
index. Swing traders are using both technical and fundamental analysis.
3. Intraday / Short Traders
WHAT THEY DO?
They open and close positions in the same day. This type of Forex traders is focusing
solely on technical analysis. Short-traders use either their own system to trade or
they pay a monthly subscription to an external signaling service. The alerts of
signaling services are delivered via SMS, email, Facebook, Member’s Area etc.
Information about Live Forex Signaling Systems is found in Chapter-7.
REQUIREMENTS:
Basically two things really matter. First of all you need the perfect technology with
minimal delays. Secondly you need a Forex Broker offering very tight spreads and
small trading commissions. Short-Trading is all about paying minimal cost. If you
want to evolve as an Intraday Trader, think about joining a trading rebate plan too.
A trading rebate can minimize your trading cost. You may find three ECN rebate
plans at the Chapter-5 of this eBook.
4. News Traders
WHAT THEY DO?
They are trading important news and events, perfect information and top technology
are considered absolutely a ‘must’ for News-Traders.
REQUIREMENTS:
The same requirements needed as the Intraday Traders (News-Traders are Intraday
Traders too).
5. Forex Scalpers
WHAT THEY DO?
As it was mentioned in Chapter-1, scalpers open and close positions in tiny
timeframes lasting less than one minute. They aim to ‘scalp’ the market and earn 210 pips.
REQUIREMENTS:
Scalpers need perfect technology and minimal transaction cost -But all that is needed
in a much higher extend than the case of the usual intraday trader. Usually scalpers
Forex Guide v1.0 – Qexpert.com
19
are not trading Forex manually but instead they trade via the use of an automated
system (copier or Robot). You can learn about automated scalping systems in the
Chapter-7 of this eBook.
Keep in mind that usually scalpers trade exclusively three currency pairs. The reason
is that these 3 pairs enjoy high liquidity and therefore minimal transaction cost:
i) Euro against the US Dollar (EUR/USD)
ii) British Pound against the US Dollar (GBPUSD)
iii) US Dollar against the Japanese Yen (USD/JPY)
6. Copy Traders / Social Traders
WHAT THEY DO?
Following (copying) the trading activity of other traders. This procedure is also called
as Social Trading (nothing to do with common Social Media).
REQUIREMENTS:
Social trading is booming nowadays. In order to make money from this type of
trading you need a social trading platform, for example ZuluTrade and MirrorTrader.
Social trading platforms are again free to download and to use.
► The ZuluTrade Platform
Furthermore you need good technology too, but most importantly you need an
excellent instinct to select the perfect signal provider. All social trading platforms
offer the chance of monitoring the past performance of any signal provider. You can
also compare providers based on your criteria.
Forex Guide v1.0 – Qexpert.com
20
7. Live Forex Trading Signals & Forex
Robots
(i) Live Forex Trading Signals
What is a Live Forex Trading Signal?
A Live Forex trading signal is an alert for buying or selling a Forex Currency Pair. This
alert can be delivered either manually or automatically. Manual alerts are delivered
via classic methods as email, Facebook, SMS, twitter, member’s area etc. Automatic
alerts are delivered via a signal copier. Usually automated trading signals are based
on MetaTrader4.
Which are the Criteria When Choosing a Forex Signaling Service?
A Forex signaling service is provided usually for a monthly subscription between 50150 USD. First of all you must focus on a service that is able to cover all your needs
(manual or automated trading, delivery method, frequency of signals etc).
Furthermore, it is important to focus also on the past performance of each service.
Sometimes, these services offer also a trial period of a few days.
Here is a list with popular Forex Signal Providers:
SIGNAL
STYLE
TRADING
PROVIDER
■ Automated
Trading
■ Manual
■ Forex
Trading
Currencies
■ News
■ Gold
SIGNALS &
Trading
MENTORING
Trading
■ Social
■ Stocks &
CLUB
Trading
Indices
■ Forums
Trading
with Signals
and Reports
■ Learning
■ Forex
■ Desktop
Currencies
Trading
■ Futures
Software
TRADE MINER
Trading
■ Manual
■ Stocks
Trading
Trading
■ Forex
MBFX TRADING ■ Manual
COST
■ 77 USD
per month
■ 97 USD
for one-time
■ 97 USD
Forex Guide v1.0 – Qexpert.com
INFORMATION
► Review System
» Visit Web
► Review System
» Visit Web
► Review System
21
SIGNAL
PROVIDER
STYLE
Trading
■ SMS Alerts
AUTO BINARY
OPTIONS
SIGNALS
ELITE SIGNALS
FX TRENDY
SYSTEM
■ Manual
Trading
■ SMS Alerts
■ eMail Alerts
■ Automated
Trading
■ Manual
Trading
■ Manual
Trading
■ eMail Alerts
TRADING
Currencies
■ Gold
Trading
■ Stocks
Trading
BINARY
OPTIONS
TRADING
■ Forex
Currencies
■ Stocks &
Indices
Trading
■ Forex
Currencies
■ Gold
Trading
■ Forex
Currencies
COST
INFORMATION
for one-time
» Visit Web
■ 120 USD
for one-time
■ 49 USD
per month
■ 37 USD
every 3months
Forex Guide v1.0 – Qexpert.com
► Review System
» Visit Web
► Review System
» Visit Web
► Review System
» Visit Web
22
(ii) Forex Robots (Expert Advisors)
What is a Forex Robot?
A Forex Robot (or else an Expert Advisor) is a piece of software that plugs in a
Trading Platform in order to trade Forex automatically. These systems are usually
running on Metatrader4. If you want to trade using a Forex Robot you need top
technology and probably a VPS hosting service (explained later).
The Criteria When Choosing a Forex Robot
A Forex Robot is designed to perform a very difficult task so there are many
parameters defining your best choice. Here are some important factors that must be
taken into consideration:
(1) Past Performance of the Robot
(2) Who is the Developer?
(3) What is the average frequency of trading?
(4) Is there any Money Management Mechanism (spread and slippage control etc.)
(5) What is the Price of this system? Can I use it in more than one Live Account?
(6) Does my broker allow the use of a Forex Robot? (usually ECN /STP brokers allow
trading via the use of Forex robots)
(7) Is my broker suitable for automated trading? (spreads, execution speed etc)
(8) Will I need a VPS hosting service? (probably the answer is yes)
Furthermore:
(9) Test always any system in a demo account before using it in a real trading
account.
(10) Never mix the use of a Forex robot with other trading activity, it may confuse
the robot’s Money-Management System
Forex Guide v1.0 – Qexpert.com
23
POPULAR FOR ROBOTS (EXPERT ADVISORS)
Here is a list with popular Forex Robots (Expert Advisors):
FOREX ROBOT
FAP TURBO
FOREX ROBOT
WALLSTREET
ROBOT
GPS FOREX
STYLE
■ Scalping
many Forex
Currencies
in the M15
Chart
■ Scalping:
EUR/USD,
GBP/USD,
USD/JPY,
USD/CHF,
AUD/USD,
NZD/USD
■ Scalping
many
currencies
during the
Asian
Session
VOLATILITY
ROBOT
■ Scalping
only
EUR/USD,
GBP/USD
FX MEGADROID
■ Scalping
only
EURUSD
PLATFORM
■ MetaTrader4
■ MetaTrader4
■ MetaTrader5
■ MetaTrader4
■ MetaTrader5
■ MetaTrader4
■ MetaTrader4
■ ZuluTrade
ONE-TIME
COST
■ 149 USD
for one-time
■ Free
Lifetime
Updates
■ 1 Forex
License
■ 299 USD
for one tine
■ 3 Forex
Licenses
■ Free the
Omega
Indicator
■ 149 USD
for one time
■ 1 Forex
Account
License
■ 190 USD
for one time
■ 1 Forex
Account
License
■ 67 USD
for one time
INFO
► Review System
» Visit Web
► Review System
» Visit Web
► Review System
» Visit Web
► Review System
» Visit Web
► Review System
» Visit Web
■ Find Expert Advisors and Trading Systems Reviews at ForexAutomatic.com
What is a VPS Hosting Service?
In order a Forex Robot to trade effectively it requires to remain active 24 hours per
day. This problem can be solved via the use of a VPS. A VPS is an external hosting
service that allows the Robot to trade 24 hours per day without having your PC,
Laptop or Tablet turned on.
A VPS usually costs about $40 per month but certain brokers offer that service for
free.
Forex Guide v1.0 – Qexpert.com
24
8. Forex Trading Resources
(i) Major Currency Symbols
CURRENCY
CODE
SYMBOL
FOREX SLANG
US DOLLAR
USD
$
Dollar Buck
EUROPEAN EURO
EUR
€
Fiber
SWISS FRANC
CHF
CHF
Swissy
BRITISH STERLING
GBP
Cable
JAPANESE YEN
JPY
£
¥
CANADIAN DOLLAR
CAD
$
Loonie
AUSTRALIAN DOLLAR
AUD
$
Aussie
NEW ZEELAND DOLLAR
NZD
$
Kiwi
Yen
(ii) Six (6) Main Types of Trading Orders
These are the six (6) important order types when trading Forex:
(1) Market Order
Buying or selling a currency pair at the current market price.
(2) Limit Order
Buying or selling a currency pair at a pre-determined (limited) price.
(3) Stop-Loss Order
A stop-loss is the most important order type. A stop-loss sets a limit to the maximum
amount you are willing to risk in any trade.
(4) Target Profit Order
This common order sets your targeted price level. It pre-determines your profit
potential.
(5) Limit Entry & Stop-Entry
Buy or sell a currency pair below or above the market at a pre-specified level.
(6) OCO Order
OCO means One-Cancels-Other. Based on this order if a trade is executed then
another trade is automatically cancelled.
(7) GTC Order
GTC means Good-Till-Cancelled. A GTC order remains in the market active until it is
either filled or cancelled.
Forex Guide v1.0 – Qexpert.com
25
(iii) Currency Pairs and Changes in Historic Volumes
Source: Aite Group ‘Global FX Market Update 2013: Increased Market Transparency, More Competition’
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26
(iv) Forex Calendar / Heat Map
This Forex Heat Map Table is based on statistics between the years (2000-2013).
The full research was published on www.TradingCenter.org.
Source: ForexAutomatic.com / TradingCenter.org
Forex Guide v1.0 – Qexpert.com
27
© George Protonotarios 2014
COPYRIGHT INFORMATION
ALL RIGHTS RESERVED. No part of this eBook (including text, information,
tables, analysis, resources and images) may be copied, reproduced, mirrored
or sold.
DISCLAIMER AND LEGAL NOTICE
The information presented in this eBook represents the view of the author.
Every attempt has been made by the author to verify all information included
in this eBook, but there is no guarantee about the accuracy and the reliability
of any information presented in this eBook. In addition, this Forex Guide
includes affiliate links. This eBook is not intended for use as a source of
financial or investment advice.
RISK WARNING
There is considerable exposure to risk when trading Forex, Futures and
Options. Trading Forex and other leveraged products involves a significant
level of risk and is not suitable for all investors. Before undertaking any such
transactions you should ensure that you fully understand the risks involved
and seek independent advice if necessary. The possibility always exists that
you could sustain a substantial loss. Never trade with funds that you may
need in the future. Past performance is not necessarily indicative of future
results. Any opinions, suggestions, brokers, systems, services, software,
reviews, promotions, bonus, rebates, links and web-sites mentioned on this
eBook are provided as general market commentary, and do not constitute
investment advice in any way.
Forex Trading Guide v1.0 - Copyright © February 2014
George Protonotarios -All rights reserved worldwide
Distribution by Qexpert.com
www.Qexpert.com
Forex Advertising & Web-Sites
Forex Guide v1.0 – Qexpert.com
28
