Day 1 – Introduction to Forex Training

Day 1 Getting a good overview of the Forex market

Day 1 – Introduction to Forex A wide variety of aspects are looked at on the Forex
Trading market, broken down in to the following sections
 Brief History of the Forex Market
 Forex vs. Stocks, pros and cons
 What is traded and how ?
 Market size and liquidity
 When are the good times to trade ?
 Different types of Forex trading, and why we
use ours
 What to consider when choosing currency
pairs
 How is money traded in the market ?
 How to read a Forex quote
 Long vs Short / Bid vs Ask
 First look at a Forex chart and how to read it
o What is a pip
o Time frames
o Candles 101 (just four for trend
reversals)
 Lots, leverage, profit and loss
 Types of orders (pending orders, immediate
etc.)

Introduction to Forex Training and this book

If you’ve ever travelled to another country, you would know that you need to go and exchange your money for
the money of the foreign currency. They will set a rate at which you can exchange your money. So if you had
British Pounds, the exchange people might say “we will give you USD 1.5 per pound you give us”.

Now at the end of your holiday you go home and want your British Pounds back, so you go to the same people
and in that time exchange rates have changed. The travel agent now says “It used to be USD 1.5 for each 1 GBP,
but now it’s USD 1.2 per Pound”. So the Dollar has strengthened. And all the dollars you didn’t spend are now
worth more than when you bought them and you’ll get more pounds per dollar. Make sense ?

In essence, you have traded Forex already.

Exchange rates fluctuate constantly, every second there is a minor change. Forex traders learn how to predict
these changes and purchase the currency they think will get stronger than another. There are many different
systems, tools and sources of input. Don’t worry about that for now, we’ll get to that later.

The difference between someone who calls him/herself a Forex trader, and someone just going on holiday, is that
a Forex trader does this intentionally and with the view of earning a profit. Also, we don’t have the expense of
plane tickets, accommodation and all those things. We have one small expense to place the trade and that’s it.

Forex trading used to be the domain of only large banks or very large investment groups, with the smallest trade
being allowed of $100’000 (that’s USD and not Zimbabwean Dollars!). This puts it out of reach of the general
population.

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Over the last 10 or 15 years the Forex market has had several changes which allows people to trade with very
small amounts. Some brokers offer as low as $25, these accounts are not recommended and we’ll get in to that
later as well.

It’s good that you’re reading this and that you are interested in Forex trading. However, it’s not for everyone. You
must be aware that there is always an element of risk when placing a trade. And secondly, anyone offering a 2 or
3 day course with no follow up program is just making a quick buck from you. I could not learn your job in 2 or 3
days, so how can I expect you to learn mine ? Make sure there is a good follow up and mentorship program
involved. Getting live trade advice and market analysis is a huge bonus, especially if it’s based on the same
system you’ve been taught in class. We’ll go more into how to choose the right tutor in more detail.

Brief History of the Forex Market

At the end of World War 2, the whole world was experiencing so much chaos that the major Western
governments felt the need to create a system to help stabilize the global economy.

Known as the “Bretton Woods System,” the agreement set the exchange rate of all currencies against gold. This
stabilized exchange rates for a while, but as the major economies of the world started to change and grow at
different speeds, the rules of the system soon became obsolete and very limited.

In 1971 the Bretton Woods Agreement was abolished and replaced by a different currency valuation system. With
the United States in the pilot’s seats, the currency market evolved to a free-floating one, where exchange rates
were determined by supply and demand.

At first, it was difficult to determine fair exchange rates, but advances in technology and communication
eventually made things easier.

Once the 1990s came along, thanks to the advent of personal computers, banks began creating their own
trading platforms. These platforms were designed to stream live quotes to their clients so that they could instantly
execute trades themselves.

Meanwhile, internet-based trading platforms were introduced for individual traders.

These are known as “retail Forex brokers”, these entities made it easy for individuals to trade by allowing smaller
trade sizes. Unlike in the interbank market where the standard trade size is one million units, retail brokers allowed
individuals to trade as little as 1000 units.

Why the Forex Market, and not stocks or others ?

Once again, this is a personal choice. I can only give you the reasons why I decided on the Forex market and not
the more traditional stock market.

There are many factors to consider, from how the market works to how it will fit in to your personal life and income.
The Forex Market suits me very well, and I hope to persuade you to consider Forex as your market of choice.

Long story short, here’s my propaganda for why you should consider trading Forex.

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Trade Volume

Trade Volume
London Stock Exchange $7 Billion

Tokyo Stock Exchange $18 Billion

NY Stock Exchange $74 Billion

Retail Forex $1.49 Trillion

Forex Market $3.98trillion

0 1000 2000 3000 4000 5000

You will see that in the graph above there are two spots for Forex. This is because there are two published versions
of how much Forex is traded daily. The larger one of $3,98 trillion is the entire global Forex market traded per day.
The retail sector (you and I) accounts for a smaller amount of $1.49 trillion per day.

The retail sector is still 15 times bigger than the combined weight of the three largest stock markets combined.

So why is trade volume important ? Liquidity. There is always someone out there wanting to buy your currency,
and trades execute almost immediately. Also, the sheer size of the global Forex market eliminates the possibility of
companies or people tampering with the prices. It takes almost the full weight of a government to influence the
price, and even then it doesn’t last for long.

Trade in either direction

Forex is traded in either direction on the graph. Unlike stocks, where the aim is to buy low and sell off the stock at a
higher price, Forex traders can enter the market high and close low. This will be discussed in more detail later, but
for now you need to know it’s there. As long as there is movement in the Forex market, you can make money.
And if your favourite currency pair is a little too quiet, you can pick another.

Time Management
In Stocks and other markets, there are loads of options out there, which can become quite confusing. Successful
traders in those markets can require to watch 50 to 100 (or more) different stocks or options, and analyze each
one. The real professional Forex traders very rarely trade more than 5 currency pairs. I know several very successful
traders who trade from only one pair, and then only 20 to 25 times a year.

This gives you more time to spend on your pairs, and pick the right trades. It also means that once you have a
good system and you feel comfortable trading, you can spend as little as an hour a day trading. It might take you
3 years to get to that level, but how many businesses can realistically say that in 3 years the business will run and
you only need to work 1 hour a day 5 days a week ?

No Commissions
No clearing fees, no exchange fees, no government fees, no brokerage fees. The only “fee” charged is a spread,
which differs from broker to broker, but is charged upfront and the fee is usually covered in the first 2 or 3 pips of
positive movement.

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No Middlemen
Spot currency trading eliminates the middleman and allows you to trade directly with the market responsible for
the pricing on a particular currency pair.

No Fixed lot Size

Unlike other markets where contract sizes or lot sizes are determined by the exchange, you can determine your
own lot (trade volume). This allows traders to participate with small accounts or massive accounts alike.

Low transaction costs

The retail transaction cost (spread) is typically less than 0.1% in normal market conditions. Large dealers might
offer costs as low as 0.07%.

Leverage
And this is a big bonus. In Forex trading, a small deposit can control a much larger amount. Leverage gives the
trader the ability to make nice profits and keep total capital risk to a minimum. Leverage is given in a ratio, the
two most common being 50:1 and 100:1. How the ratio works, is the broker will let you trade as though you had an
amount 50 times or 100 times larger than what you have put down. So a $500 account could effectively trade
with $50’000.

There are brokers out there that will offer up to 400:1 leverage. However, I don’t recommend going that high. Stick
to either 50:1 or 100:1. This is because while leverage can greatly increase your earnings, it can also increase your
loss. Always keep in mind that Forex is a risk. Sorry to put a dampener right there, but I want to make sure you’re
aware of the risk and don’t go running to the bank after seeing a 400:1 leverage !

Demo accounts
Demo accounts are accounts offered from brokers where they give you virtual money to trade on their platforms.
You are trading real exchange rates, real indicators, and the fees and everything is built in as though it was a real
account. Best of all, they’re free. So if you want to try out a new system, try trading a currency pair you’re not
used to, you can setup a demo account and try it out. It’s fantastic.

It’s better than stocks

Let me finish that sentence with “in my opinion”. Even though it should be your opinion too. But here’s a quick
breakdown of why.

Advantages Forex Stocks

24 Hour Trading YES No
Minimal or no commission YES No
Instant execution of market orders YES No
Short-selling without an uptick YES No
No middlemen YES No
No market manipulation YES No

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What is traded and how ?

The long story short, is money. You are purchasing foreign currency in the hopes that that country’s economy
strengthens in relation to the currency you used to buy it. You are effectively purchasing stock or shares in world
economies.

The Major Currencies

Depending on who you speak to, there are 5 or 8 major currencies. On the below table we show the 8 major
currencies, with the first 5 being the big five.

Symbol Country Currency Nickname

USD United States Dollar Buck
EUR Euro Zone Members Euro Fibre
JPY Japan Yen Yen
GBP Great Britain Pound Cable
CHF Switzerland Franc Swissy
CAD Canada Dollar Loonie
AUD Australia Dollar Aussie
NZD New Zealand Dollar Kiwi

The symbol of each currency always has three letters, and generally the first two letters shows which country and
the last letter shows the name of the currency. So the USD is the United States Dollar.

These currencies are called the majors because they are the most traded currencies.

How is it traded ?
In Forex, a single trade is the simultaneous purchase of one currency and the selling of another. Brokers and
dealers handle all the technical things related to it so you don’t need to worry about that. Because you’re buying
AND selling currencies in one trade you are trading pairs.

If you knew that the USD was going to get a lot stronger than the JPY, you would trade the pair USD/JPY and you
would buy. This means you are purchasing Dollars and selling Yen. If you thought the Yen would strengthen
against the dollar, you would trade the same currency pair but enter a sell.

These are the major currency pairs that get traded

The Major currency pairs all contain the USD on one side. The majors are the most liquid and widely traded pairs.

Pair Countries Lingo

EUR/USD Euro Zone / United States Euro Dollar
USD/JPY United States / Japan Dollar Yen
GBP/USD Great Britain / United States Pound Dollar / The Cable
USD/CHF United States / Switzerland Dollar Swissy
USD/CAD United Stats / Canada Dollar Loonie
AUD/USD Australia / United States Aussie Dollar
NZD/USD New Zealand / United States Kiwi Dollar

The Minor currency pairs consist of any currency from the 8 majors except for the USD. You also get exotic pairs,
which consist of currencies from the emerging markets against the USD.

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There are few Forex brokers who offer these pairs, and even if they do then the spreads are quite high making
them more difficult to trade. We’ll explain more on spreads later in the document if you’re not sure what that is.

Here are the exotic pairs.

Pair Countries Lingo

USD/HKD United States / Hong Kong
USD/SGD United States / Singapore
USD/ZAR United States / South Africa Dollar Rand
USD/THB United States / Thailand Dollar Baht
USD/MXN United States / Mexico Dollar Peso
USD/DKK United States / Denmark Dollar Krone
USD/SEK United States / Sweden
USD/NOK United States / Norway

Market Size and liquidity

The Forex Market is considered an OTC (over the counter) market due to the fact that the entire market is run
electronically between a network of banks 24 hours a day. There is no physical location nor a central exchange.

So in a market that is spread throughout the world with no central location, trading can take place anywhere that
you can connect to a broker. Whether it be a trading floor, or on the beach, it makes no difference.

The Forex market is by far the biggest financial market in the world, and is traded globally by over 4000 world
banks and a massive amount of individuals and other organizations. See the Trade Volume diagram earlier in this
document.

Traders choose who they want to trade with depending on current market conditions, attractiveness of price and
even the reputation of the trading counterpart.

The USD is the most traded currency taking up 84,9% of all transactions. The Euro’s share is second at 39.1%
followed by the Yen at 19%.

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Percent of all transactions

90.00%

80.00%

70.00%

60.00%

50.00%

40.00%

30.00%

20.00%

10.00%

0.00%
USD EUR JPY GBP AUD CHF CAD Others
84.90% 39.10% 19.00% 12.90% 7.60% 6.40% 5.30% 25.00%

You can quickly see why the Dollar keeps getting mentioned in this document.

Currency Composition of
World FX Reserves

USD
EUR
GBP
JPY
Others

According to the International Monetary Fund, the USD comprises almost 62% of the world’s official foreign
exchange reserves.

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Speculation
It is important to note that despite the Forex comprising of commercial and financial transactions, most currency
trading is based on speculation.

Most trading volume comes from traders that buy and sell based on intraday price movements, the trading
volume brought about by speculators is estimated to be more than 90%.

Due to the massive volumes and high number of traders, the liquidity of the Forex market is very high. This makes it
easier for people to buy and sell currencies.

For investors, liquidity is very important because it determines how easily a price can change over a given period
of time. In a very liquid market like the Forex market, huge trading volumes can happen with very little effect on
the price or action.

It is good to note that market depth can change depending on the currency pair and the time of day. We’ll go
more into detail on best times to trade later on.

Different Ways to Trade Forex

There are four different ways to trade Forex, we will only be focusing on one of them. The four methods are Spot
Market, Futures, Options and Exchange-traded Funds

Spot Market
In the spot market, currencies are traded immediately or “on the spot” using the current market price. The
simplicity, liquidity, tight spreads and 24 hours a day operation makes this the most popular of the four methods.
You can start with tiny accounts of $25 (not recommended but possible) up to several million dollar accounts. This
is the market that we will focus on.

Futures
Futures are contracts to buy or sell a certain asset at a specified price on a future date. Forex futures were first
created in 1972 by Chicago Mercantile Exchange. Since futures contracts are standardized and traded through a
centralized exchange, the market is very transparent and well-regulated.

Options
An “option” is a financial instrument that gives the buyer the right or the option (with no obligation) to buy or sell
an asset at a specified price on the option’s expiration date. If a trader “sold” an option, then he or she would be
obliged to buy or sell an asset at a specific price on the expiration date.

Exchange-traded Funds
An ETF could contain a set of stocks with currencies, allowing the trader to diversify with various different assets.
They can be traded like stocks through an exchange. The market is not open 24 hours however, and since they
contain stocks they are subject to trading commissions and other transaction costs.

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When are the good times to trade ?

You should now have an understanding of what Forex is, why you should trade it, who makes up the Forex market
but now we should find out when you should trade. The market is open 24 hours a day, but there are still “sweet
spots” where it’s best to trade.

Ideally we want movement in the market when we trade. Doesn’t matter if it’s up or down, as long as there is
movement we’re happy. When it’s a sideways market (no real up or down trend) things can be quite tough.

Before we choose the best time to trade, let’s look at what happens in the market over a 24 hour period. We can
break the Forex market up into four major trading sessions. Sydney, Tokyo, London and New York sessions. Here are
the session times.

Northern Hemisphere Summer

Time Zone GMT SA Time (GMT+2)

Sydney Open 22:00 00:00
Sydney Close 07:00 09:00
Tokyo Open 23:00 01:00
Tokyo Close 08:00 10:00
London Open 08:00 10:00
London Close 17:00 19:00
New York Open 12:00 14:00
New Your Close 21:00 23:00

Northern Hemisphere Winter

Time Zone GMT SA Time (GMT+2)

Sydney Open 21:00 23:00
Sydney Close 06:00 08:00
Tokyo Open 23:00 01:00
Tokyo Close 08:00 10:00
London Open 07:00 09:00
London Close 16:00 18:00
New York Open 13:00 15:00
New Your Close 22:00 00:00

You can see that between each session, there is a period of time where two sessions are open at the same time.
For example, Tokyo overlaps with London for an hour, and London overlaps with New York for 3 hours. These are
the busiest times of day because two major centers are both open and trading.

Now here’s the really interesting table. The average pip movement of the majors during each separate trading
session.

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Pair Tokyo London New York

EUR/USD 76 114 92
GBP/USD 92 127 99
USD/JPY 51 66 59
AUD/USD 77 83 81
NZD/USD 62 72 70
USD/CAD 57 96 96
USD/CHF 67 102 83
EUR/JPY 102 129 107
GBP/JPY 118 151 132
AUD/JPY 98 107 103
EUR/GBP 78 61 47
EUR/CHF 79 109 84

From the table, you can see that the European session usually provides the most movement. All of the markets
can be traded, but if you’re looking for a fast moving and liquid market then the European session is the better
one to look at.

Here is why I tend to look at the European session more than the others

 I’m based in South Africa, and the timing suits me perfectly.

 The London session crosses with two other major trading sessions, and with London being a key financial
sector, a large portion of all Forex transactions take place during this time. So there’s a very high liquidity
and usually lower transaction costs.
 Most long term trends begin in the London session and typically continue until the beginning of the New
York session.
 If you want to work half days, the volatility tends to die down in the middle of the session. Larger traders
head off for a break before the New York session begins.

Which pairs to trade ?

Assuming you agree with me on the European session, it’s usually a good idea to stick with the majors to avoid
surprises. The majors are traded in such large volumes by so many people that it’s less likely for something
unexpected to occur. The majors in this trading session to look at would be the EUR/USD, GBP/USD, USD/JPY and
USD/CHF.

You can try the Yen crosses, specifically using the two biggest European currencies EUR/JPY and GBP/JPY.
Personally, I trade the GBP/USD as my primary currency pair, then I’ll branch out to the other majors.

How is Money Made in the Forex Market

In the Forex market you buy or sell currencies. The idea is that you exchange one currency for another with the
expectation that the price will change in your favour. So the currency you bought will increase in value
compared to the one you sold.

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Here’s an example

Trade EUR USD

You purchase 10’000 Euros at the EUR/USD exchange of 1.1800 +10’000 -11’800
Two weeks later you exchange your 10’000 Euros back into USD at the -10’000 +12’500
exchange rate of 1.2500
Profit taken of $700

When taking leverage into account, profits could be much higher. Exchange rate is the ratio of one currency
valued against another currency.

How to Read a Forex Quote

As usual, we will be using the GBP/USD. This information will apply to any of the currency pairs that you decide to
use.

GBP/USD =
1.6050
Base Currency Quote Currency

The first currency mentioned in the quote is the base currency. The second (after the slash) is the quote currency.
In the above figure, we are showing that 1 British Pound is worth 1.6050 US Dollars.

So if at this point you decided you want to trade on this exchange rate, and you felt that the GBP would increase
in strength, you will then buy. When trading we always refer to what you are doing with the base currency.
Because if you feel the pound with strengthen, you want more of them, so you buy pounds.

If you decided that the pound would weaken against the dollar, you would sell. You want to get rid of them and
rather stock up with dollars.

Long vs Short
Traders like their lingo. A long position or a short position, has nothing to do with time. Long means that they are
buying the base currency, and short means selling the base currency.

So if you hear someone saying they are “entering a short position” or “going short” they are basically entering a
trade by selling. “Going long” or “entering a long position” is when they are entering a trade by buying the base
currency.

Bid / Ask
All Forex quotes are quoted with two prices. The bid and ask. The bid is the price at which your broker will buy the
base currency, and the ask is what they will sell the base currency. The difference between the bid and ask price
is known as the spread and this is where brokers make their money.

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Brokers bid prices will be a little lower than the value of exchange so when they buy back the currency they make
a small profit. The ask price is a little higher than the exchange value, so when they sell you the currency they
make a small profit.

This is actually a very good system, so there are no fees or commissions payable to brokers and your spread is
included in your trade immediately. So you can cover your costs immediately.

How to Read a Forex Chart – the basics

What is there to take note of on the Forex charts ?

 Currency Pair
 Chart period
 Current Exchange Rate
 Any obvious trend ?

Usually on charts it will show what currency pair you are trading. You’ll see on the top left of this chart it shows I am
trading the GBP/USD. The H1 next to the currency pair shows us that it is the 1 hour chart. This means that each
candlestick represents one hour. Don’t worry, we’ll cover more about candlesticks soon.

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The vertical column on the right shows the values of the currency, in this case the black background block shows
the current exchange rate. And we can clearly see over this period that there was a big long movement. Long
meaning going up. This shows us that the British Pound is hammering the US Dollar. At least over this small bite of
the market.

What is a pip ?
Have a look at the above graph, and the section on how to read Forex quotes. You will note that we use 4
decimal places instead of the regular two. Nothing is smaller than 1c right ? Wrong.

A pip is 1/100th of a cent and this is where Forex traders make their money. Let’s take the exchange rate from the
previous graph of 1.6069.

1, | 6 | 0 | 6 | 9

6
• 10 cents
= 1000
pips

0 • 1 cent =
100 pips

6
• 1/10th of
a cent =
10 pips

9
• 1/100th of
a cent =
1 pip.

So if the market moves from 1.6069 up to 1.6089 it means it moved 20 pips up, or you could say the pound
strengthened by 20 pips.

Depending on how much you traded, this could be a small amount of profit or a lot. With a $5’000 dollar account,
you could trade $10 a pip and make $200 off a small trade like that. It should be noted again that Forex trading is
a risk, and if you went the wrong way you could also lose $200 on a trade like that.

The next section covers Lots, Leverage, Profits and Loss which will help you understand how we make money from
pips. Important Note : Some brokers will offer a 5th decimal place, and these are called Fractional Pips. They are
also nick-named a pipette.

Lots, Leverage, Profit and Loss

In the introduction of this document, we showed that the minimum amount allowed used to be $100’000 per
trade for this type of Forex trading. With the opening of the retail sector, these lots have been divided up making it
more accessible to the general public to start trading.

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Lot’s Name Number of Units

Standard 100’000
Mini 10’000
Micro 1’000
Nano 100

Micro lots seem to be a very popular account size for people starting out, and most brokers will allow Micro
accounts. Not many allow Nano accounts purely because it’s not worth their while.

Leverage is one of the best (and possibly worst) things about Forex trading. If you think of your broker as a bank
who is fronting you the money to purchase currencies, all the bank is asking is that you give it a smaller amount as
a good faith deposit.

If your broker offers a 100 : 1 leverage, then for every 1 unit you put in, the broker will let you trade 100 times that
amount. In this example, if you wanted to trade a Micro lot (1’000 units) you could put down 10 units at 100:1
leverage. Make sense ?

Simply put, here’s an example of profit/loss on a trade. So let’s say you wanted to trade $100’000 on the USD/CHF
pair, and you agreed on a 100:1 leverage with your broker. You would put down $1’000 to secure the temporary
loan and the broker would let you trade with $100’000 value. For every pip movement on this amount, you would
make or lose $10.

Types of Orders
The term “order” refers to how you will enter or exit a trade. There are various types of orders that can be placed
in the Forex exchange market.

Different brokers will have different options of what type of orders they will accept.

Market Order
A market order is an order to buy or sell at the best available price. It is an immediate order with no pending
details. It is quite simply the easiest order to place and the most commonly used.

Limit Entry Order

This is an order placed to either buy below the market, or sell above the market at a certain price. This falls under
the pending order category on most platforms. Let’s say the GBP/USD is currently at 1.6900. You can set a Limit
Entry Order to buy if the market reaches 1.6950 or sell if it drops to 1.6850. The idea is to place this order, and be
able to walk away. Most commonly used when you believe the market will turn after reaching a particular price.

Stop Entry Order

This order works in reverse to the Limit Entry Order, where you will buy above the market, or sell below the market
at a certain price. This is generally used when you believe that if the market hits a certain price it will continue in
that direction. Let’s say the market is on 1.6950. There is a nice trend forming upwards, but you’re not convinced
yet. You know that if the market hits 1.6980 then it will continue. So you place a Stop Entry Order that if the market
hits 1.6980 (or maybe a little higher to be safe) it will then BUY. The same works in reverse for sell positions.

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Stop Loss Order

A stop-loss is a very good type of order to learn. It helps you protect your overall capital, but setting a market
price that will trigger your trade to close. So if you see a trend, enter, and the market swings the other way while
you’re not at your computer, it will stop your trade. You will still lose some money, just not nearly as much as you
could’ve.

Trailing Stop
A trailing stop is like a dynamic stop loss. If you set your trailing stop at a certain level (let’s say 20 pips) then as you
move in to profit your stop loss will automatically follow 20 pips behind. This can be very useful for the nervous
trader, but sometimes it can also cause your trade to close on a fake out.

Demo Account vs Live Account

Firstly, let’s talk about the difference between the two types of account. Money. That’s it. Almost every broker has
a demo account option where you use real live charts, and all the spreads are already built in. So it works exactly
like a live account, except you’re playing with a fake bank account.

So that’s the technical difference. The other difference is much more important, psychology. Using a demo
account is great for learning whichever platform you want to trade with, testing new systems, or as a beginner to
the Forex market.

Here’s a little disclaimer. If you do not feel ready to put down real money on a live account, then wait. This must
be your decision to do so, and you must be aware that there is always risk when trading Forex so never put down
more money than you can afford to lose.

Assuming you have gone for genuine training and have a good mentorship program, then you should look at
moving to a live account. If you scour forums and chat to existing traders you will find out quickly that the
transition from demo account to live account is quite big. There are many people trading very successfully on
demo accounts who fail miserably on live accounts. Even though they are technically the same, it is hard to
remove all emotions from trading.

We suggest, and once again this is only a suggestion, that after you have completed your training, you spend 2
to 4 weeks on a demo account using the same platform you intend to trade on. In this time you must become
comfortable with the software to avoid silly mistakes, and apply what you learnt in class to the charts and follow
your mentorship program. After that, you open your live account.

If at any time you lose 4 consecutive trades, or have a drawdown of 10%. STOP TRADING. Contact your trainer,
analyze your trades, take a step back and relook at your strategy. Never chase that “one big deal to cover
losses”.

Let’s be honest here, when looking at the possible income from Forex trading people generally get quite greedy.
I’m not saying you shouldn’t want to earn a lot, but greed itself is never good. It makes you step out of your
trading strategy, take bigger risks and often it makes you trade when you should actually just step away for a bit.

Strategies do need to be adjusted from time to time, and you might notice that everything just goes wrong at the
worst possible time. Nine times out of ten, this is due to news coming out. There are several ways to trade news,
one of which is to simply not trade at all! Which is a surprisingly popular decision to make. We will be covering
popular news and how to trade off it, or if you prefer to be a pure indicator trader you might make the decision to
simply avoid trading during those times.

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Day 1 – Introduction to Forex Training

Closing Statement
This document should bring you up to speed with an overall view of the Forex Market and how it works. The
intention was not to spend a lot of time on any one thing, but to educate you enough to hopefully protect
yourself.

If you have any questions, or think we should add something to the document, please contact us through the
website www.completetrader.co.za and make a suggestion.

And always remember, the number one rule for successful traders…

Plan your trade, and trade your plan

Disclaimer
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high
degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you
should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists
that you could sustain a loss of some or all of your initial investment and therefore you should not invest money
that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and
seek advice from an independent financial advisor if you have any doubts.

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