1fta Forex Trading Course.pdf

Disclaimer

T rading in the Forex market is a challenging opportunity where above average returns are

There is considerable exposure to risk in any foreign exchange transaction. Any transaction involving

currencies involves risks including, but not limited to, the potential for changing political and/or

economic conditions that may substantially affect the price or liquidity of a currency.

Moreover, the leveraged nature of FX trading means that any market movement will have an

equally proportional effect on your deposited funds. This may work against you as well as for you.

The possibility exists that you could sustain a total loss of initial margin funds and be required

to deposit additional funds to maintain your position. If you fail to meet any margin call within

the time prescribed, your position will be liquidated, without prior notice to you, and you will be

responsible for any resulting losses. Investors may lower their exposure to risk by employing risk-

reducing strategies such as “stop-loss” or “stop-limit” orders.

available to educate and experienced investors who are willing to take above average risk.

However, before deciding to participate in Forex trading, you should carefully consider your

investment objectives, level of experience and risk appetite. Most importantly, do not invest money

you cannot afford to lose.

TABLE OF CONTENTS

Introduction 5

How to read and interpret a weekly economic calendar 23

How to manage your risk 35

Fundamental Analysis 38

Glossary 42

FAQ 53

Reading 56

SUMMARY

analytical tools on the trading system and methodologies. In this respect, the purpose of the

course is to provide an overview of the many strategies that are being used in this market

and to discuss the steps and tools that are needed in order to use these strategies successfully. The

Academy firmly believe that the key to success rely on the application of the basis trading elements

and the discipline to stick to a strategy. Furthermore, the strategy chosen will have to meet your

objectives and personality.

1st Forex Trading Academy is a school with a true knowledge conscience and we understand that

the objectives of all of our students are different and this is precisely why we are offering a course

that will respect the capabilities of each individual in order to apply the mandate of the Academy.

For many years, this market was reserved to people working in the financial business and we want

to share with the general public all the necessary information to access the trading market.

1 st Forex Trading Academy’s FOREX trading course intends to provide to all of the students

Introduction

Description of the Forex

The Forex market, established in 1971 , was created when floating exchange rates began to

materialize. The Forex market is not centralized, like in currency futures or stock markets. Trading

occurs over computers and telephones at thousands of locations worldwide.

The Foreign Exchange market, commonly referred as FOREX, is where banks, investors and

speculators exchange one currency to another. The largest foreign exchange activity retains

the spot exchange (i.e.., immediate) between five major currencies: US Dollar, British Pound,

Japanese Yen, Eurodollar and the Swiss Franc. It is also the largest financial market in the world.

In comparison, the US stock market may trade $10 billion in one day, whereas the Forex market

will trade up to $2 trillion in one single day . The Forex market is an opened 24 hours a day market

where the primary market for currencies is the 24-hour Interbank market. This market follows the

sun around the world, moving from the major banking centres of the United States to Australia

and New Zealand to the Far East, to Europe and finally back to the Unites States.

Until now, professional traders from major international commercial and investment banks have

dominated the FX market. Other market participants range from large multinational corporations,

global money managers, registered dealers, international money brokers, and futures and options

traders, to private speculators.

There are three main reasons to participate in the FX market. One is to facilitate an actual

transaction, whereby international corporations convert profits made in foreign currencies into

their domestic currency. Corporate treasurers and money managers also enter the FX market in

order to hedge against unwanted exposure to future price movements in the currency market. The

third and more popular reason is speculation for profit. In fact, today it is estimated that less than

5% of all trading on the FX market is actually facilitating a true commercial transaction.

The FX market is considered an Over The Counter (OTC) or ‘Interbank’ market, due to the fact

that transactions are conducted between two counterparts over the telephone or via an electronic

network. Trading is not centralized on an exchange, as with the stock and futures markets. A true

24-hour market, Forex trading begins each day in Sydney, and moves around the globe as the

business day begins in each financial center, first to Tokyo, London, and New York. Unlike any

other financial market, investors can respond to currency fluctuations caused by economic, social

and political events at the time they occur - day or night.

History of the Forex

Money, in one form or another, has been used by man for centuries. At ﬁrst it was mainly Gold or Silver

coins. Goods were traded against other goods or against gold. So, the price of gold became a reference

point. But as the trading of goods grew between nations, moving quantities of gold around places to

settle payments of trade became cumbersome, risky and time consuming. Therefore, a system was

sought by which the payment of trades could be settled in the seller’s local currency. But how much of

buyer’s local currency should be equal to the seller’s local currency?

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