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Learn Forex Trading Basics

Forex Trading Fundamentals

Beginners who want to invest in Forex should start by studying the information. so that we may have knowledge and understanding Because Forex trading is considered to be another career that must be involved in the use of investment funds. If we understand the fundamentals, whether it’s profitability, risk, the right understanding of the market. This will lead to becoming a professional trader that is sustainable and profitable. Reduce the loss of money to the market as well.

Things to know when starting Forex trading

  1. What is Forex? How did this happen? Because Forex is a type of investment. So we need to know first what we are investing in. What are the details and what are the risks?
  2. Advantages and Disadvantages. Every investment has different advantages and disadvantages. For Forex investments as well, investors should study the pros and cons in order to decide whether to invest or not.
  3. Market opening-closing time. Forex market is a market that has different opening-closing times than the stock market. And related to foreign currency, therefore trading 24 hours a day, only on Monday – Friday. This is an important point that novice traders should know.
  4. There are many specific terms. in Forex trading that you may not have heard of before. Beginner traders should learn the terminology to understand their meaning and help them trade more smoothly.
  5. Opening a Forex trading account. In order to open an account, it is necessary to open it with a broker. You should choose a reliable broker. It is certified by leading organizations and has easy-to-reach support services.
  6. Using the Forex Market Trading Tools Forex. trading is preferable to MetaTrader, which can be done anywhere via the Internet. There is also a trading program called EA Forex (Expert Advisor) which can be installed in MetaTrader.
  7. how to make profit in the market. After knowing the preliminary information Next is how to successfully trade currency in the Forex market. We will get profit or loss depending on the difference in currency. Therefore, we should study this matter well as well.
  8. Factors used in the analysis, such as economic analysis, whether the situation is different, monetary policy. both short term and long term This includes technical factors such as computational analysis based on historical statistical data to assess where the price index will go.
  9. Risk management – Risk is inevitable in the business world. Traders should therefore set a wall for themselves on how much losses they want to deal with in order to serve their potential risks.

Forex terms you should know

Vocabulary is a top priority in Forex trading because it connects everything. Be it in terms of profit methods, currency pairs and risk management. These terms are included in all the trading processes we need to know in order to better understand trading.
Examples of words you should know

  1. Lot is the name of the order size or investment unit used in trading. This determines the value of each order that we place a lot.
  2. Pip and Point are units used to count the price movement of a currency pair. For example, the price has moved 10 pips or 100 points, where 1 pip equals 10 points and the more the price moves, the more. Compared to the number of Lot, it is very valuable.
  3. Broker is an intermediary that accepts orders to the central market. Correctly registered in a foreign country because at present there is no Thai law to support
  4. Spread, Bid, Ask
    o Spread is a fee that we have to pay to the Broker caused by the difference between the buy and sell prices.
    o Bid is the price the broker gives us when pressing a sell order or SELL.
    o Ask is the price the broker gives us when placing an order or BUY.
  5. Support and Resistance
    o Support is support when the price chart goes down and then there is a rebound. can’t pass down
    o Resistance is resistance when the price chart goes up and then moves back down. can’t pass up
  6. Money Management is to manage portfolios and investments to minimize risk. To make the portfolio safer and more profitable than loss
  7. Leverage is a ratio set by the broker. It helps to increase your trading power and make more trades.
  8. Indicator is a help or analysis tool that is created to signal us to make decisions easier.
  9. Take Profit or TP is the profit point that we set for the program to automatically close the order.
  10. Stop Loss or SL is the point we set. When a loss occurs or the chart runs in the wrong direction, the program automatically closes the order.

Choosing a Forex Broker

Forex brokers are the ones who accept orders from us and send them to the market. giving us more trading power Or a broker is an agent that is a private company registered correctly. We must open a trading account to trade Forex through a broker.

How to choose a basic broker

  • Choose a licensed broker properly registered
  • have good service help quickly
  • Fast deposits and withdrawals
  • Supports multiple financial transactions
  • It supports a variety of trading styles, for example, there are platforms to choose from. There are many types of trading accounts.

Using the Forex Trading Program

Forex trading software is an indispensable tool for Forex trading, which can be done through the Internet. Currently, MetaTrader is used in two versions: MT4 (MetaTrader 4) and MT5 (MetaTrader 5), but for beginners it is recommended to use the MT4 version because the program is designed to be easy to use, uncomplicated, and supports running any operating system on a computer. all systems

How to use MT4 Basics

  • Download the MT4 program from the available brokers.
  • Install the program on your computer.
  • Take a trading account that has been opened and verified. Login to the program
  • Select a currency pair to open a chart window. by holding together in pairs
  • Place a buy order when the analysis results are up Sell when the analysis results are down Put an order for investment units through the One Click Trading window.
  • View trading information at Trade Data and Trade History.
  • Select an order to close the order as needed.

Using the EA Forex Trading System

EA Forex (Expert Advisor) is a program written to help traders automate Forex trading, no need to monitor. There are both free and paid versions available. This system helps to make money continuously 24 hours a day and reduces the problem of emotional and mental decision making of traders. Both concerns and fears Because the program will trade according to the system set.

How to Choose a Basic Forex EA

  1. Choose an EA Forex program that fits our trading style, such as short trades, long trades.
  2. Compare the advantages and disadvantages of each program.
  3. Refer to historical trading profit performances or ask questions from real users.

How to install Forex EA on MT4

  1. Download the EA file to install, either download it for free from any website or purchase it from the author or developer.
  2. distribute files and copy data
  3. Then open MT4 (MetaTrader) and go to the File menu.
  4. Select the command Open Data Folder > MQL4 > Experts, then paste the previously copied file into this window.
  5. After pasting the file, go to Menu Navigator.
  6. Scroll down to Expert Advisors, right click and press Refresh. The name of the EA that we installed will be displayed.
  7. After the installation is complete, enable it by dragging and dropping it to the graph.
  8. We can instruct the EA to run or stop using the Expert Advisors menu.

Using the indicator tool

Indicators are aids or analytical tools that are created with specific formulas. as a signal for us to make trading decisions easier, for example, to look at the direction, to tell the price reversal and entry points

Examples of popular indicators

  1. The Exponential Moving Average (EMA) is a tool used to tell the direction of the trend and the change in the trend. It is also used as support and resistance to find entry points.
  2. The Stochastic Oscillator is a tool that tells the price reversal points and the zones of trading strength.

Forex trading techniques

There are many different techniques for making profits in the Forex market. It depends on the trader’s habits, preferences, capital and the nature of daily life, how much time is available for trading. Because trading is like another business. It takes time and dedication to it for you to succeed. First, we need to find strategies and techniques that can be the most profitable. fit into our daily habits and times.

Basic Forex Trading Principles

  1. Analysis of the Trading Fundamental Analysis is to analyze the fundamentals covered events such as the announcement of a policy on finance – lower interest rates. social and economic situations, etc.
  2. Analysis of trade entry from Technical Analysis is a chart analysis based on historical statistics. By applying various forms of analysis such as technical analysis with Indicator, chart analysis from Chart Pattern, Price Action can be seen from the support-resistance price frame.
  3. Selection of time frames from short to long term. The format of the time frame is important. Because we cannot use the same strategy for every timeframe. There is a time frame format as follows:
  • Scalping is a short-term profitable trading, opening and closing orders within minutes only.
  • Day Trading is open-close trading. Orders within the day we trade If overnight or at 4 am according to Thailand time
  • Swing Trading is open-close trading for days or weeks. Take profits based on the short-medium price range.
  • Positional Trading is open-close trading. It aims to make the most of the big price changes. It’s usually a long-term investment.

Once we know the nature and style of trading We will find a strategy to suit that pattern. If you like Scalping, it takes a short period of time to make profitable trades. Don’t have to watch the screen, wait for a long time. The price run will be around 5 – 10 pips, but the lot is big. The price is only a few pips and it can be profitable.

Forex chart techniques

Learning charting techniques is another important aspect of Forex trading, essentially analyzing from charts. Can be divided into two types:

1. Analyze from blank charts using Price Action or Candlestick Theory.

  • The candlestick itself indicates buying pressure. There are several types of selling pressure, such as Doji, Hammer, Shooting Star, Harami, which we will use together with support and resistance. It is divided into 2 forms: support – resistance according to the trend of the chart. and the other is horizontal support-resistance.
  • We can use it to find a point to open a buy or sell contract, just by looking at the price approaching the support or resistance line. If it runs near the support line or the line below it, we will buy, but if the price if it runs near the resistance line or the line above it, we will buy.

2. Analyze charts by using Indicators, using mathematical-statistical principles calculated from open, close, high, low prices.

  • It is important to understand that all indicators calculate their values ​​more slowly than the actual price bars. And we should know first what each indicator tells us. And we should not use multiple indicators of the same type because it may cause confusion.
  • We should use 1 indicator per 1 type, for example MACD is used to look for trends, Stochastic moves according to the momentum of the price and will occur before the direction of the price change. So most people prefer to find Overbought or Oversold levels in the price reversal.

Risk Warning: Investments and speculations are risky. Investors and speculators should learn more and consult a financial advisor. before making any investment or speculation decision. Trading leveraged products such as CFDs carries a high risk of loss and may not be suitable for all investors. Trading in such products is risky and may result in the loss of all invested funds.

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