Weekly Forex Forecast: February 26 – March 2 2018 – Forex Trading Guide

Welcome to our weekly forex market analysis call and today we are looking for at the week of February 26th to March the 2nd 2018 and just a quick disclaimer before we get started this is for educational purposes only trading is a risky business so please be careful with your money all right so now let’s dive in and we’ll we’ll start with a look at our forex factory calendar here and we are on the 26th ok so we’re starting off oh this is not the right week alright so here we go perfect so we’re starting off Monday with ECB President Draghi speaking and also there are a lot of or you know other Bank members speaking as well so basically with these ones now that the monetary policy stance is changing from central banks we just have to be mindful of the comments that come out so any comments that point words the solid state of the economy and also point out concerns about inflation may be overshooting or anything that suggests that the banks may raise rates that will be considered positive for the currency so that’s what we need to pay attention to Tuesday we have CPI numbers and then we also have German booba present Weidman speaking again this will have an impact but here Draghi speech will have a bigger impact here but we do have a fetcher Powell is testifying so this will have an impact so we saw previously we saw Bank of England they were testifying about the monetary policies which had an impact now this one fetcher Powell testifying will also have an impact on the market so basically the market will just now that they have switched the leadership role the market will be paying attention to what the forward stance would be for the fad because we have been seeing interest rate hikes are they going to continue with that or with the change of leadership things are going to change so that’s the question that everybody will be paying attention to and then core durable goods orders will also have an impact on the US dollar consumer confidence number this is an important number that we do need to pay attention to and it will generally have an impact so if it comes out positive like it’s expected then that would be positive for the US dollar same thing here ANZ business confidence number for New Zealand will have an impact on a New Zealand dollar here as well and then going into Wednesday here not a whole lot of important read data we do have GDP preliminary GDP numbers for the US which will be important and this one here Chicago PMI numbers and pending home sales numbers so these numbers will be important PMI numbers are always important because they are leading indicators that generally lead to retail sales so these numbers will be important we have crude oil inventories which will generally impact US dollar than Canadian dollar as well and private capital expenditure for Australia we have a bunch of PMI numbers coming out on Thursday out of the eurozone again these will have an impact on the euro manufacturing PMI number for British pound that will be important as well so a lot of PMI numbers coming up so that will be important and then again we have fetcher Powell testifying so expect volatility in the US dollar as a result of these speeches and more Isum manufacturing PMI numbers for the US that will be impactful okay and then on Friday a very very key speech will be from prime minister Theresa May here for a British pound here so brexit will be a concern going forward or it already is a concern so right now they’re going through the nose and British Pound has really benefited from the positive sort of the the whole scope of the negotiations right now it seems very positive so as a result of that the British Pound has benefited as well the data that has been coming out of the out of UK has been positive as well so overall British Pound has been good however anytime there are political issues like this things don’t tend to go as smoothly as you know they may appear so just keep an eye on these braixen negotiations and the comments that come out of it right now with Prime Minister Teresa Mae’s speech it will be market moving so if we hear comments about them reaching agreements the two countries reaching agreements in terms of trades and market and that kind of stuff that will be positive for for the especially the British Pound it will also be positive for the euro but overall it’s a British Pound that is getting impacted more by these negotiations so that’s what we’ll have to pay attention to however if there are any comments whether they are in Theresa May speech or otherwise about how they may not be able to reach the agreement or they may not be able to negotiate the right type of terms that will be detrimental for the British Pound so we’ll have to keep an eye on that we also have construction PMI numbers of course those will be important and we have another major thing here Bank of England governor Carney speaking so what Prime Minister Theresa May says or does in regards to brexit as the last what Bank of England governor Carney says both of these will have an impact so it looks like Friday will be a big day for the British Pound so if you are trading the British Pound on Friday just be mindful of that because we could see a lot of volatility in the pound as a result of that and then GDP numbers for Canada which will be important so overall not a ton of critical data coming out so but we do have some central bankers so central bankers have been in the focus right now and what they say does have a big impact on the market so just be mindful of that all right so that is our that’s our fundamental so now let’s take a look at what we have in terms of our charts here all right so what we have seen with the Euro it’s sideways so last week we looked at this range bound move and this week as well it’s sideways went to the high and then went back down now so I’m looking for it to come back towards the bottom of the range into one level or one 2200 level and then it could bounce off so for now I’m gonna trade this as a range my bound move so when price comes into the bottom of the rage arranged at 120 200 I’m looking for a bounce up and if it goes into the top of the range I’m looking for a bounce to the downside so one thing we do need to keep in mind would be any breakouts from the range so general behavior with the range bound market is sell at the top and buy at the bottom right however if the price let’s say comes down here and starts to do this breaks down then we are looking for a further move to the downside but we do have to wait for that breakout for now it is just going sideways there’s really no clear market direction we have gone into our high here so if you take a look at the left-hand side and we see that we are into this resistance area price had trouble here before it really sort of dropped further from this previous downtrend and now we are at that level again so at this point we are just in no-man’s land in terms of market direction for the last one to five weeks here we haven’t really broken out of this range so now we need to see is the price willing to break out of the range at some point price will break out the rain the range we just don’t know which direction it’s going to break out and as a result of that we just have to be mindful when the price gets to these these end of the boundary of the ranges of if the price comes back in to 120 200 we have to watch out for that so basically scenario will be the bounce back into the range once it comes to 120 200 and if once it goes to 125 50 level then I’m looking for a bounce back into the range but I’ll be watching out for any breakouts if it breaks out to the downside then I’m looking for next move to be into 12050 area so those that’s what I’m looking for but for now waiting for price to come in and bounce off of one 2200 so range bound for euro dollar in terms of the pound here we are also we’re also looking at sorry just a quick question can we hedge it I’m not sure what like how I would hedge it I was just wait for I would just trade the range and once we see an indication of breaking out of the range you could so you probably what you’re talking about is a straddle so if you mean can you like put a sell order at the bottom what I’d be concerned about is price spiking through it and then pulling back in I don’t typically do straddle orders because of that very reason there’s a lot of times what happens is price will break through because there are so many stops on the other side of it price will break through that level and then pull back and like this right price will punch through and go back into the range and the purpose of really that pin will be to grab all the orders sitting there and then kind of continue on into the opposite direction so that’s why I’m not a big big proponent of straddling it like that I’d rather see a break of the range and then once the price holds below the range then we can sort of kind of continue on with that so similar to here where the price was just sitting below this level and once it broke through once this candle closed you can just take trade to the downside so that’s my preference but of course there are different strategies that you can use I prefer to just trade the range and wait for the breakout in either direction so with the British Pound here this one has also gone sideways we are in this level here so for now it is overall it is kind of pointing to the downside but if there is no real no real sort of direction here either because we do have this uptrend and now we are seeing this this pullback so it could be a pullback so we could just see one of these moves back into the bottom here into 135 80 so for now I am the weak here has been really not much the candle air is very very small so we had a bullish candle here which was not angling and now we have a higher or lower high and a higher low so it hasn’t really it’s and just inside candle with a little pin so given this situation I’m looking for price to my bias for British Pound and this is just my bias so just be mindful of that we have to watch what goes on my bias is that it breaks down a little bit I think things have been a little bit overly positive for the British Pound because everybody is optimistic that we’ll get these excellent brexit negotiations but like I said before these things rarely go well and I mean there was a reason there was you know brexit vote so having a soft practice brexit is unlikely in my opinion however things could change so that’s why we have to watch what the market does so what I am looking at basically is a retest of this one 3800 level and probably a squeezing like this and my target would be 135 80s I’m looking for price to come down into this 135 80 level and then potentially bounce off of this uptrend line so that’s my that’s how I’m viewing the markets I’m looking for further weakness in pound dollar in to 135 80 however we do have Prime Minister Theresa May speaking so on Friday this could be impacted so keep an eye on that aussie here aussie has been arranged bound here as well but this one is looking more bearish than what we saw with the euro here so for the last three weeks it has held this range but we have a lower high here so price is coming down and we all so have a double top so a few weeks ago we had a double top now prices moving lower so as a result of that I am looking for price to go further down so my bias for Aussie dollar is to the downside I’m looking for a break of this 7760 ish level here and price continuing into 7650 level and potentially even further into 7550 level so I’m looking for price to step down a bit into the next support or resistance level here this has been an important resistance level which has now turned into support so we do need to wake wait for the breakout of this level so what I would be looking for is one of these and then a break to the downside we do have to be mindful of this 7760 ish level overall my biases to the downside and the target for this would be 75 50 New Zealand dollar here similar situation I am looking for price to break down further so price has tested this resistance level several times now and only once did it try to break out to the other side and then reversed right away and with this one here I am looking for a further move to the downside we have had a bearish candle close so I’m looking for a move into 7180 level here that will be the first target and then the second target would be 70 50 level so basically waiting for price to are looking for price to drop so bias for New Zealand dollar would be bearish dollar cad here this has been a bit interesting so we have seen higher lows now surprise is moving higher but it hasn’t been moving high in a very sort of Astra in a very consistent manner so we are seeing kind of back and forth so it’s not as as weak as the Australian dollar for example or New Zealand dollar so for this one my bias is to the upside and again we need to see a break we are into this resistance level right now so we need to see a break of this and resistance that will or the support and resistance level has kind of played out several times but the bias is to the upside so what I’m looking for for dollar cad is maybe so right now we are in the middle of the candle here so maybe back into this 12550 level and then another move to the upside and finally a break to the top here so my target is 120 900 to the up sights of biases to the upside but it’s won’t be as smooth sailing as maybe Australia or Australian dollar a New Zealand dollar here so bias is to the upside and they’re commodity currencies as well so they tend to sort of move at the same time some expecting price to move up higher here it has found stuff so we have a higher low higher low higher low so and higher highs here as well it’s looking for it to move up further euro Swiss franc this one is it’s still in this downward trend here and now I am looking for price to basically again do another leg to the downside make another leg to the downside for two weeks here we have not seen it break the highs so now we have a lower highs as a sorry yeah lower highs and I’m looking for price to go down further into a 3 20 level here so the bias is to the downside for euro Swiss franc pound Swiss franc has been a little bit tougher than our euro but overall though we are still in so we still have this this downtrend here right but it could go up further so with this one I would be careful we do have a bullish candle closed as a result we could see price move either into 130 300 or 13250 so I would look for price to push up first and then do a drop but this one will be tied to whatever happens with the with the British pounds I would be careful trading this one so right now what it looks like is maybe a pullback in the so I’m kind of seeing it as this so looking for price to drop further but it like I said it could pull back into 130 250 or 130 3300 level and then drop from there so that will be my that would be the scenario that I’m looking for for me this is not the best pair to trade this week I am just I’m gonna look for other opportunities probably pound yen and pound dollar will be the better ones to trade instead of pound Swiss franc your Swiss franc I think is a better one compared to this this one here dollar this one is sideways so we have seen it be in this range or staying in this range for the last few weeks now and I am looking for price to potentially retest this level once again and do a double top type of formation so 9450 would be my target to the upside but it is range bound at the moment it hasn’t really gone anywhere in the last few weeks so this one may be another one where we just have to wait and see what the price does here but for now we did have a bullish candle close it did not manage to close above the previous high so it is not overly bullish but because there is still buying going on here we may see price push all the way up into 90 450 level and then drop so I’m going to treat this as a range bound move if the price goes into the hi I’m looking for a potential sell if it goes into the bottom here 90 180 I’m looking for a potential buy so trading this as a range bound market let’s take a look at the yen crosses now with the yen Here I am let’s see so the yen here we are making a lower high here so it’s not overly bullish very very small weekly candle close we have a pen on top so I’m looking for a break to the downside for this one like I said my biases I’m not overly bullish on the British Pound I am looking for four pound to face more hurdles as the whole talks negotiation talks continue so for me I am looking for further breakdown of this my target would be 140 320 level so I do want to see a break of this level of the 148 20 ish level and then I continued move to the downside so we do need to make sure that the price holds below this pin here or maybe 140 level and then I’m looking for a break to the downside so bias is to the downside for pound yen euro yen here the bias is also to the downside and the next target so the next target looking at is 128 50 here so this is we have last this is what we have last three weeks we have seen a downwards move we have a bearish pinbar here for the weekly candle close we are in two support here though this resistance turning into support so we do need to see a break of 130 but my bias is to the downside I’m looking for price to go into 120 850 level so looking for euro yen to drop a bit this one here Aussie yen we were bearish and it has come into this 83 30 level so the bias still is to the downside but as we can see price is struggling at that level and this is the where the previous support resistance is coming from price had struggled in this area before but the bias is still to the downside I’m looking for a retest of this 83 30 level and then looking for 8250 level to the downside so looking for price to draw further overall the bias still remains to the downside here but do keep in mind we are kind of coming in to these levels that are almost to the bottom here and also just to mention with Japanese yen strengthening so much there will be additional pressure or added pressure on on Bank of Japan to react so sorry looking at the weekly here we do have a bearish pinbar so I’m looking for price to go into 8250 and potentially even lower into 8180 level so there will be additional pressure or added pressure on Bank of Japan to intervene so they have said that they’re not likely they’re not going to intervene in the markets but the history that Bank of Japan has is of intervention so what could happen is if the Bank Bank of Japan is not very comfortable with the strength of their currency because if the currency is expensive the exports will drop and they don’t want that Japan is such a big exporting country that it would have material impact the strength of the currency has a material impact on their economy so as a result of that Bank of Japan does not want the currency to be high and before they would just go intervene in the market before really letting anybody know however there has been a lot of pressure on them to not do that everybody’s criticized them because it creates sudden moves in the market that nobody really likes or cares who cares about so as a result of that they have sort of stayed their hand in terms of intervention but the more expensive Japanese yen gets more we see drops and everything else against the Japanese yen the higher the likelihood of Bank of Japan intervention so generally will we see as Bank of Japan will just come and sell a whole bunch of yen and it will create this move to the upside and all the yen crosses so just be just be mindful of that because as the further it drops all the yen crosses drop the more the likelihood of Bank of Japan intervening in the market all right so the last one here is our dollar yen dollar yen we are still staying below this previous support level and now turning into resistance I’m looking for price to drop further and the target will be about 104 50 level right into this one here in this case we could see a push up into this to retest the support and resistance level again 107 80 level and then looking for price to test a 105 50 and then 104 50 after that so bias is to the downside for dollar yen as well all right any other questions or any other anything else you want me to look at first depends when to enter the trade I usually so I look at my weekly analysis at the beginning of the week just to sort of get a get a lay of the land and get an idea of what I’m looking at for the week to come and then based on how things play during the week because the news may come out and things may change market is dynamic so I look at the daily I do the daily market analysis and I look at the daily candle states and that’s when I would start looking at where to take the trades from but when I actually plays the trade I am looking at a lower down lower timeframe to go into the position but at the levels are coming from the higher time frame levels I hope that makes sense anything else um my what indicator do I recommend I personally don’t tend to use too many indicators what I do use our pivot points so these are pivot point levels and these green are pivot points and R 1 R 2 and s 1 s 2 levels so this is one of the indicators that I do like to use and then volume is another one that I tend to look at so I have a point in volume I would say will be the two that I personally prefer alright so I don’t see any other questions alright so that’s all I have if you so we were just talking about daily Market Analysis if you guys are interested in joining me for for the daily market analysis that’s part of trade room option that I have so if some if you want to join me in the trade um there is a private skype group where I share my trade ideas and analysis I also when I take live trades I send out alert so I normally put in where I’m entering the trade the entry level my stop loss level my take profit target and I also manage the trade so when I move my stops and the stuff like that so I send all of that information out and I also we also do daily market analysis so we have a similar call every night at p.m.

Eastern it’s recorded so if you’re not able to make it you can always you know get the call or get the recording of the call and if you join the trade room you will also you’ll be able to based on the daily market analysis call you’ll be will you’ll get the levels that I’m looking to take trades from so you can choose to take the entries that I’m taking or if you wanted to take additional trades we go through all the different crosses so you have levels for all those crosses to trade from you also get my pivot point indicator which is one I that I do reference in the trade room so you can join this on a monthly basis and the cost for that would be ninety seven dollars a month and you can go to trading with Venus Campos trading – signals for that or if you wanted a better price point I do offer some yearly and yearly options as well and these are the different links you can go to to access those alright so that’s all I have I will call it a wrap now so you guys have a wonderful rest of the weekend and I will see you next time

As found on Youtube

El mejor curso de Forex en español – Clase de muestra GRATIS #2 – ¿Qué es Forex y cómo funciona?

Financial Education ♪♪♪ What is Forex? Let’s start with the basics! Forex is the abbreviation of Foreign Exchange and it is nothing more than the currency market. What does this mean? Suppose you want to buy food Where would you go? Well, to the food market, that’s where you can buy what you need. In the same way, if you need clothes you go to a clothing market. And the same with shoes or anything else you need. In this way we understand by market that place where you pay money in exchange for the good or service that you require. It is a trade in goods. Now, Forex is a money market. You pay money in exchange for money. Does it sound confusing? It is not so! Let me explain to you! Each country has a different coin or currency.

Some countries share the same currency but in general there are dozens of currencies in circulation. For example, Mexico has the Mexican pesos, The United States has the dollar, Peru has soles. Venezuela has bolivars, The countries of the European Union such as Spain, Italy, France, etc. have the euro, Chile has the Chilean pesos, and so on. And each of these currencies has a different value, so that in this money market you pay with the currency of one country to buy the currency of another country. It’s that simple! These coins have an international ISO code that consists of three alphabetic characters where usually the first two characters refer to the name of the country and the last to the name of the currency. For example, the Chilean peso code is CLP, where CL is for Chile and P for Peso, the United States dollar code is USD where US by United States and D by dollar, since the euro is a shared currency among all countries of the European Union the code is only an abbreviation of the name of the currency, therefore it is represented as EUR, the ISO code for the pound sterling is GBP, that is, Great Britain Pound, and so on.

When negotiating with currencies not only negotiate with one currency, there are always two, that is, you pay with one currency and you receive another. This is the reason why when you look at the Forex quotes you will always see the currencies quoted in pairs, because each transaction involves the purchase of one currency and the sale of another, so we have for example euro/dollar, pound/dollar, dollar/yen and these currency pairs are known as financial instruments. For each pair you will see a quote or price for the exchange rate, the first currency is known as the base currency and the second as the quoted currency, variable or counterparty. The exchange rate or price tells the buyer the amount of the quoted currency or variable that must be paid to obtain a unit of the base currency, that is, if you are trading the euro/dollar pair (EURUSD) and the quote is of 1 dollar 3125 cents, this is the price of one euro in US dollars. Therefore you must pay 1 dollar with 3125 cents to get 1 euro. Now, who buys foreign currency and why? This market was born with the objective of facilitating the monetary flow derived from international trade, that is, imports and exports.

For example, Venezuela produces oil and sells it to many countries in the world, mainly to the United States. Then, the United States pays Venezuela in US dollars and then Venezuela theoretically uses those dollars to buy bolivars and reinvest the capital in their country. In the same way happens with Chile, the main copper exporter in the world. Chile produces copper and sells it to China and other countries and transactions in foreign currencies also occur. So governments and private companies buy and sell coins from other countries to trade with them. International banks also buy and sell large amounts of foreign currency and finally people buy and sell foreign currency either because they are going to travel, for vacations, for business, and so on. So the main operators in the forex market are the following: Financial Institutions, Commercial Companies, Central Banks, Management Companies of Investment Funds and Private Investors through intermediaries, these are us, the common people.

Nowadays it can be assured with total veracity that the currency exchange market Forex or FX as it is also known, is the financial market with the greatest projection of growth in the modern financial world. Thanks to this market, specialized companies have emerged that are in charge of providing Forex account management services, investment funds and automatic systems. Currently there are specialized companies in the participation and support to the operators of this market that offer different types of services, these financial intermediaries are called brokers and they offer you the possibility of opening an account in a certain currency; dollars, euros, or your local currency so that through purchase and sale orders issued by different channels allow you to obtain benefits taking advantage of the fluctuations of the exchange rates of the different currencies. These companies given their importance in the financial system are usually subject to various controls and audits, however when you are talking about the financial intermediary or broker it is advisable that before choosing one you investigate very well its solidity and trajectory, as well as taking into account the legal framework by which they are governed.

In class number 4 I will talk more about this topic and I will show you in detail everything you need to review to choose a suitable broker, reliable, safe and in tune with your trading strategy. Not all brokers are good, not all are reliable, and even among the reliable ones, not all will be appropriate for your strategy or your trading style because there are conditions and characteristics that are not compatible with certain investment strategies. So it’s very important that you pay attention to this class number 4 before deciding on a broker and opening your account. I think I can not be emphatic enough at this point, do not open an account in any broker no matter how good and reliable it is before you have seen class number 4 of this course.

Trust me! You will thank me and your pocket too! Now, for you to have an idea of the size of the Forex market, the daily volume of transactions leads to moving around 3 trillion US dollars per day. Forex is the largest financial market in the world, it is bigger than all the stock markets of the United States together. Trillions of dollars are traded daily in the Forex market. From 1997 to the end of 2000, the daily volume of foreign exchange operations increased from 5 billion dollars to billion dollars. The Forex market continues to grow at an incredible rate. This high volume is advantageous from the investor’s point of view because transactions can be executed quickly at a low cost. Before the emergence of the internet only companies and very wealthy people could make foreign exchange investments in the Forex market through the banks’ private currency exchange systems because these systems required a minimum of 10 to 50 million dollars only to get started.

Today, thanks to advances in technology, an investor who owns only 1 dollar can open an account in a broker and access the Forex market 24 hours a day with just a computer, an Internet connection and all the information that You will receive throughout this course. This traffic activity with currencies is known as trading and the person who makes it is known as a trader, so this thing of being a trader is a profession, as well as being a doctor, accountant, pilot, engineer… although it is not the same as a job. Trading is an activity that you can carry out from anywhere in the world and in parallel to your employment or you can even be a full time trader and live on trading millions of people do it and believe me when I tell you that it is a profession highly lucrative, although I will not lie to you is also highly risky. However before continuing, I want to talk to you a little about the risk of investments.

Let me ask you this: How dangerous is it to drive a car? It depends on the driver, isn’t it? If a person who has never driven a car, who has never done a driving course, places it on the street behind a steering wheel, that person will be a very high risk both to himself and to other drivers and passers-by. However, the risk can be drastically reduced with study, practice and experience, right? The investments are exactly the same, the investment is not risky in itself, it is the investor who is risky because if he does not know what he is doing, the investment is not only a risk but terribly dangerous and is almost guaranteed to end with terrible consequences. Therefore, before investing you must study, practice, experiment and perfect your techniques, your knowledge and your skills… Thus, an investment will be as risky as the investor is, and as lucrative and profitable as the person who directs it.

Most have the idea that a job is safer than investing, it is not surprising that people think so. Almost all of these people have spent their entire lives studying and practicing to perform their work. A doctor studied at least 8 years of specialization, if he had not done it… would you trust your health in the hands of a doctor who has not graduated from university? A surgeon who has not studied enough is also risky, although he has a job, not only is it a risk to the health of his patients, it is also certain that he will run out of work in a short time. However, despite having studied and being a great professional, having a job is not exactly safe. The truth is that nothing guarantees that you do not wake up unemployed tomorrow, your income can be stopped at any time without you being able to do anything about it, either because the company went bankrupt, because you fought with your boss, because they replaced you with another resource or by the nephew of the boss… The list is very long! It does not seem so safe anymore, is it? If you have doubts that this job is not yours, tell me…

If you get tired of that job, can you sell it? When you die, can you inherit it to your children so they do not run out of food? It is not yours! It’s temporary! And you never know how long you’re going to have it! Can you say the same about the Mcdonald’s owner on the corner? That guy can sell the business, or inherit it. He is not going to be fired! He does not have to go every day to meet a schedule to guarantee his money and without doubt his income is much higher than average. Who is more secure? Let’s continue! Unlike other financial markets like the New York Stock Exchange, the Forex market does not have a physical location, everything is executed electronically within a network of banks without interruption 24 hours a day except on weekends.

Forex is what is known as a spot market, this means that everything is negotiated at the current price of the financial instrument. Financial instrument? Yes, remember, two currency pairs euro/dollar, dollar/yen, euro/pounds and… What are the currencies that can be negotiated? Actually, all legal tender currencies can be negotiated, however, the most commonly traded currencies are: the United States dollar also known as Buck, the euro also known as Fiber, the Japanese yen, the pound of Great Britain or Cable, the Swiss franc or Swissy, the Canadian dollar or Loonie, the Australian dollar or Aussie, and the New Zealand dollar or Kiwi, you will hear these nicknames frequently in the slang of the traders to refer to these coins. Now there are hundreds of currency pairs but I recommend that you only pay attention to the main currency pairs that are the most traded. It is considered that the activity of these currencies involves more than 85% of the volume of the daily market. In addition, the cost of transactions in foreign currencies is much higher because these currencies do not have as much liquidity as the main ones, and liquidity is essential in this market.

Also, they are more likely to fall into atypical conditions where opening and closing positions is not possible due to lack of counterparty, that is, you want to buy and there are no sellers, or you want to sell and there are no buyers. This graph that you have on the screen shows the world activity of currency exchange. The dollar is the most traded currency, participating in 87% of all transactions, the share of the euro is in second place with 33% while the Japanese yen has a 23% share. Now when you see the quotes of the different pairs of currencies you will see that there are two prices called Bid (Offer) and Ask (Demand). The large international banks provide the currency market with a purchase price Bid (Offer) and another sale Ask (Demand) The difference between these prices is called Spread and is usually constituted as the profit to the entity by its role as an intermediary between those who buy and those who sell using their channels. In general, the Spread in the most traded currencies is only 1 to 3 bips or basic points.

Do not worry, in the next class I will tell you in detail what a bip is, but for example if the purchase price or Bid in a euro/dollar quote is 1 dollar with 3100 cents while the asking price or Ask is set to 1 dollar with 3103 cents the three spread points can be clearly identified. I explain it better! Every commercial transaction has two parts, when you buy someone is selling you, isn’t it? So you are a party and your seller is the counterpart and that transaction takes place at a defined price, that price that for you is the price at which you are buying, the purchase price, from the point of view of your counterpart is the sale price because it is the price at which he is selling you. If you go to a store to buy $40 shoes, that price is what you are going to pay, and from the point of view of the trade it is the price that you will receive in exchange for the merchandise.

So, 40 dollars for you is the purchase price and for the merchant it is the sale price. However, in Forex, three parties are involved in each transaction. On one side are you who want to buy euros paying with dollars, and on the other side there may be a person like you who wants to sell euros receiving dollars in exchange but so that both of you, who do not know each other, can carry out this transaction you need an intermediary that is the broker. That broker provides them with the platform so they can buy and sell. So let’s suppose that the purchase price of the euro/dollar is 1 dollar with 3103 for the purchase and 1 dollar with 3100 for the sale, that is, you pay 1 dollar with 3103 cents to receive 1 euro in exchange, but that’s what the broker charges you.

Then that broker goes with your counterpart and buys the euro you need by paying him 1 dollar with 3100 cents. That is, the broker keeps 0.0003 cents as a kind of commission for having helped them make this transaction and that commission is what is called Spread. If you have not been very clear about this Spread, Bid and Ask… do not worry! All this, as well as other important concepts will be studied in detail in the next class so that you can master the terminology of trading like professionals.

I will go point by point explaining each word and its meaning. When can you Operate? Forex is unique in world markets, it is open 24 hours a day, you can operate at any time, from anywhere in the world, day or night … the forex market follows the sun and remains open always, except on weekends. However, the fact that it is open 24 hours does not mean that it is active all that time, that is, the prices go up and down and you can make money when it goes up and also when it goes down but you can not make money when the prices are not move or when they move very little. Therefore you need a high volume of transactions, that is, many people buying and selling so that the prices vary a lot. In fact, transaction volumes are higher when two or more markets are open at the same time. How is this? I’ll explain! The main trading centers are the London, New York and Tokyo exchanges. First open the Asian markets, they receive the sun first, then the Europeans and finally open the American markets. Taking the time of the East Coast of the United States as a reference, the market opens on Sunday afternoon, because while in the United States it is Sunday afternoon, in Tokyo it is already Monday morning.

So the market is open and you can start trading. And the closing occurs on Friday at 4 o’clock in the afternoon. Remember that we are talking about the schedule of the east coast of the United States which is the last to close. This allows permanent access to markets with the benefit of greater liquidity and a capacity to respond quickly to economic or political events that have an effect on them. The moments in which the main stock exchanges of the world open and the moments of the day when more than one market is open at the same time are those of greater liquidity and movement, that is, when the most radical price changes take place and it is the moment in which the most profits can be generated or the worst losses.

Let’s see a table where you can visualize the openings of the world markets. Again, we are talking about the time zone of the east coast of the United States. As you can see between each session there is a period of time in which two sessions are open at the same time from 3 to 4 in the morning the markets of Tokyo and London coincide and are open at the same time, and from 8 in the tomorrow until 12 noon the markets of London and the United States are open at the same time. Obviously, these are the most active hours in the market as there is a greater volume when two markets are open at the same time, with the London market producing the biggest changes but it is also true that there are certain days of the week where all markets tend to show more movement. And these days are: on Tuesdays and Wednesdays for the four main pairs of currencies which are euro/dollar, pound/dollar, dollar/franc and dollar/yen. The worst times to operate are on Fridays, Sundays, Holidays and when there are important news reports.

Fridays because they are unpredictable and there is usually little activity, Sundays and holidays because of the low volume and little movement, and finally operating during news is a guillotine because nobody knows where the price will go, the prices are unpredictable, there is little liquidity and great volatility . However, there are strategies that allow you to take advantage of these situations but you must know very well what you do and be a professional trader. Now, why would you want to trade in currencies? The benefits and advantages are many in Forex, these are just some reasons why so many people have chosen this market: There are no compensation rates, no exchange rates, no government fee no brokerage fees. Brokers are compensated for their services through the Spread or a variable commission according to the size of your investment. There is no intermediary! Forex eliminates intermediaries and allows you to negotiate directly with the market responsible for the pricing of any currency pair. There is no fixed lot! In the next class I will explain what a lot is but in Forex you determine how much money you want to invest, this allows you to participate with accounts as small as 1 dollar.

Low Transaction Costs. In retailing the Spread is normally less than 0.1% under normal market conditions. In the larger brokers the Spread could be as low as 0.07%. Of course, this will depend on your leverage and the type of broker, two aspects that I will also detail later. 24 hours Market As I mentioned, from Sunday afternoon until Friday afternoon the Forex market does not sleep and you can operate. This is great for those who want a business or part-time activity because they can choose if they want to do their trading in the morning, at noon or at night. Nobody can control the market! The currency market is so large and has so many participants that no entity, not even a central bank, can control the market price for a prolonged period of time. Leverage This is the biggest advantage and also the biggest danger of Forex because with very little money you can control a much larger amount. Leverage gives you the ability to make good profits while keeping venture capital to a minimum. For example, there are Forex brokers that offer a leverage of 200 to 1, which means that if you have 50 dollars in your account you can buy or sell up to 10 thousand dollars in currency value, similarly with 500 dollars you could negotiate 100 thousand dollars, and so on.

However leverage is a double-edged sword, this high degree of leverage can lead to large profits but without proper risk management it also gives large losses. High Liquidity Because the Forex market is so huge it is also very liquid, this means that you can always buy and sell at will instantly because there are always buyers and there are always sellers. Free demo accounts, news, graphics and analysis. Most Forex online brokers offer demo accounts for trading practices along with breaking news and graphics services. All free! These are very valuable resources for you to perfect your skills by playing with fictitious money before opening a real account, that you risk real money. The demo account will allow you to invest with toy money so you can make all the mistakes that are necessary while you learn. Investing in Forex is dangerous when you do not do it right. So the best part of your learning stage is that you can practice your techniques in a real scenario to perfect them and make sure they work without risking a single dollar out of your pocket.

So if you make a mistake, you will only have lost toy money. If you try to do that with real money, when you make a serious mistake you could be ruined, the only problem is that most demo accounts have a money limit, or a time limit. That is to say, they give you for example ten thousand dollars toy for you to practice and when you run out… you’ve run out! You can not keep practicing! Or they give you a demo account with an expiration time of 1 to 3 months, so when it expires you will not be able to continue practicing. But in class number 4 I will show you how to open an unlimited demo account in which you can deposit virtual money the amount you want and how many times you want without expiration, without conditions, without restrictions of any kind so you can practice with total freedom. And then in class 19, I will teach you how to use the platform with your demo account so that you can put into practice everything learned in previous classes and start investing in virtual money until you are sure of your success and can invest your real money feeling comfortable with what you do.

Mini and Micro Accounts Starting as a trader does not cost a ton of money, online Forex brokers offer Mini and Micro accounts some of them with a minimum deposit account of $10 or less. Now, I do not tell you that you should open an account with the minimum but Forex makes it much more accessible to the average individual who fears to risk initial capital. These are the tools you need to make Forex trading: A computer with an internet connection! And all the information of this course! How do you earn money in Forex? Your main objective as an investor is speculation about future changes in the price of currencies, and by buying and selling them according to fluctuations in exchange rates you can get profits or losses.

The purpose of trading is to exchange one currency for another with the expectation that the price will change. So the currency you bought increases its value in relation to the one you sold. But it is easier to see this in an example! Suppose you have seen the news and you have realized that the economy of the United States will weaken, perhaps you have seen that unemployment is growing or that a major company listed on the New York Stock Exchange went bankrupt, or maybe the United States has some complicated political situation… Any of these factors would weaken the US economy which is bad for the dollar. This means that the value of the dollar will decrease. At the same time you realize that the countries of the European Union are having a rebound in their economy, so it would be a good idea to buy euros with dollars, therefore you must execute a purchase operation of euro/dollar.

Suppose then that today the price of the euro against the dollar is 1 dollar 28 cents, then you buy ten thousand euros paying 12 thousand 800 dollars… Remember the leverage, you do not need $12,800 in your account. Two weeks later, the price of the euro has risen to 1 dollar and 35 cents. So, you change your 10.000 euros that by then they represent $13,500, obtaining in this way a profit of 700 dollars in the process. As I explained to you a while ago, currencies are quoted in pairs such as euro/dollar or dollar/yen because each transaction involves the purchase of one currency and the sale of another. For example, the exchange rate of the euro against the dollar looks like this EURUSD = 1.3100 It can also be seen in this way… EUR/USD = 1.3100 The currency on the left is the base… the euro And the one on the right is the currency traded. When you want to buy, the exchange rate tells you how much you have to pay in the quoted currency to get a unit of the base currency, that is, you pay 1 dollar and 31 cents to get one euro.

When you want to sell, the exchange rate tells you how many units of the quoted currency you get for the sale of a unit of the base currency, that is, using the example again, you will receive 1 dollar with 31 cents for each euro you sell. When you execute a euro/dollar purchase order it means that you are going to buy euros and at the same time sell dollars, and when you execute a euro/dollar sales order it means that you are going to sell euros and at the same time buy American dollars.

Are you going Long or Short? The first thing you should do is decide what you want to do, Do you want to buy? Do you want to sell? If you think that the euro will appreciate, that is, if you think that the value of the euro will increase with respect to the dollar… Then you must buy euro/dollar. And if you think it is the dollar that will gain value against the euro… Then you should sell euro/dollar. If you are buying it is because you expect the value of the euro to increase and then sell it at a higher price. and that means you’re taking a long position or going long. So in Forex, long equals buying, and as you will be imagining, going short is the same as selling. Get used to these terms because they are widely used in traders’ slang. You will often hear things like: “I’m long on the dollar/yen” or “I have a short position in the euro/pound”.

You should also know that everything that has to do with rising prices, upward trends, buyers, they are known as bulls, and this is due to the way of attacking the bull, which is from the bottom up. For that reason the symbol of Wall Street is the famous bronze bull of New York, located in Bowling Green Park, it is a symbol of optimism, aggressiveness and financial prosperity because it represents price rises. On the other hand, the downward movements, the bearish tendencies, the sellers, are known as Bears, and it also has to do with the bear’s attack, which is from top to bottom. Can I become a millionaire in Forex? And… Can I become a millionaire by investing in Forex? The quick answer to this question is yes. However, do not get confused. This is not a magic wand, nor is it the genius of the lamp. The foreign exchange market, like the stock markets, has the potential to make you earn a lot of money quickly but also to take away your capital in the blink of an eye. So you must be very careful! There are certainly thousands of success stories about people who have earned millions from capitals as low as $2,000 in a few hours, but you will also have heard those who have lost millions in the same period of time.

In fact, the statistic is that approximately 95% of people who invest in this market lose all their money in less than 6 months, and only 5% is profitable in the long term. These scandalous figures should scare you only if you are not willing to devote the time and effort required to learn things correctly, because the root problem, the reason why 95% of people who invest lose their money is due to lack of education. It’s like trying to fly a commercial plane without having even done a basic flight course, and most do that for the promise of getting rich in a stroke of luck, because they enter the market thinking this is a casino or a lottery…

Yes, it may be that you win a good amount of money from one day to another but if you do not know what you are doing, if your profit was the result of a stroke of luck, in the same way you won it you will surely to lose because you are not operating with your skills but throwing the dice, unless, of course, after winning you never return to operate in this market. But we know that no one does that either in the casino or in the financial markets. If you want to be profitable in the long term and make money systematically… You have to put your feet on the ground! Have realistic expectations! Define a goal of daily, weekly or monthly production. And make that goal consistent with your investment capital, with your trading system, with your risk management, with your personality and your trading psychology.

So stop dreaming of magical solutions and be professional with it. Forex is not a game and if you treat it as such, the toy will end up being you and your pocket will not thank you. Now you know what Forex is and what it is for, so I invite you to the next class where I will teach you some basic concepts so you can become familiar with the traders’ slang and begin to understand how it is spoken in Forex. Financial Education .

As found on Youtube

What is a Bear Market? – Forex Terminology

What is a bear market? A bear market is when the price of a currency pair declines substantially over a period of time. The US Dollar and the Japanese Yen are classed as safe-haven currencies and tend to strengthen in a bear market as the weaker currencies are sold and the safe-havens become in demand if you have any questions or terms you would like covered please write a comment below. If you’d like to learn more attend one of our free forex workshops by clicking the link below to register today .

As found on Youtube