Module 1: Forex Basics & Terminology
1.1 What is Forex?
- Definition: The global decentralized market for trading currencies.
- Market Participants:
- Banks (Interbank Market)
- Hedge Funds & Institutions
- Retail Traders (You!)
- Trading Hours: 24/5 (Opens Sunday 5 PM EST, Closes Friday 5 PM EST).
1.2 Key Forex Terms
| Term | Definition | Example |
|---|---|---|
| Pip | Smallest price move (0.0001 for most pairs) | EUR/USD moves from 1.1000 → 1.1001 = 1 pip |
| Lot Size | Trade volume (Standard = 100,000 units) | 1 lot EUR/USD = €100,000 |
| Spread | Difference between Bid & Ask prices | EUR/USD Bid: 1.1000, Ask: 1.1002 → 2-pip spread |
| Leverage | Borrowed capital to amplify trades | 1:100 leverage → Control 100,000with100,000with1,000 |
| Margin | Collateral required to open a trade | 1% margin = 1,000for1,000for100,000 position |
📊 Module 2: Currency Pairs & Market Mechanics
2.1 Types of Currency Pairs
- Majors (EUR/USD, USD/JPY) – High liquidity, tight spreads.
- Minors (EUR/GBP, AUD/NZD) – No USD, slightly wider spreads.
- Exotics (USD/TRY, EUR/PLN) – High volatility, wide spreads.
2.2 How Forex Prices Move
- Bid/Ask Price:
- Bid = Price buyers are willing to pay.
- Ask = Price sellers are offering.
- Example:
- If EUR/USD Bid = 1.1000, Ask = 1.1002 → Spread = 2 pips.
📈 Module 3: Technical Analysis (TA) Deep Dive
3.1 Candlestick Patterns
| Pattern | Meaning | Example |
|---|---|---|
| Doji | Market indecision | Price opens & closes near the same level |
| Engulfing | Reversal signal | Bullish engulfing after a downtrend |
| Hammer | Potential bullish reversal | Long wick below small body |
3.2 Support & Resistance
- Support = Price floor where buyers step in.
- Resistance = Price ceiling where sellers dominate.
- Example:
- EUR/USD bounces at 1.0800 support 3 times → Strong level.
3.3 Indicators
- Moving Averages (MA):
- 50 MA vs. 200 MA crossover → Trend change signal.
- RSI (Overbought/Oversold):
- RSI > 70 = Overbought (Sell signal).
- RSI < 30 = Oversold (Buy signal).
📰 Module 4: Fundamental Analysis (FA)
4.1 Economic Indicators
| Indicator | Impact | Example |
|---|---|---|
| Interest Rates | High rates strengthen currency | Fed hikes rates → USD rises |
| Non-Farm Payrolls (NFP) | U.S. jobs data → USD volatility | NFP beats expectations → USD surges |
| CPI Inflation | Rising inflation → Rate hike expectations | EUR CPI jumps → ECB may hike rates |
4.2 Geopolitical Events
- Brexit (2016): GBP/USD fell 1,000 pips in one day.
- Russia-Ukraine War (2022): EUR/USD dropped 500 pips in a week.
⚖️ Module 5: Risk Management & Psychology
5.1 The 1% Rule
- Never risk more than 1% of account per trade.
- Example:
- 10,000account→Maxlosspertrade=∗∗10,000account→Maxlosspertrade=∗∗100**.
5.2 Stop-Loss Strategies
- Fixed Pips: Always use 50-pip stop-loss.
- Support/Resistance: Place stop below key levels.
5.3 Trading Psychology
- FOMO (Fear of Missing Out): Avoid chasing trades.
- Revenge Trading: Don’t trade to recover losses.
💡 Module 6: Trading Strategies (Beginner to Advanced)
6.1 Price Action Trading
- Pin Bar Strategy:
- Look for pin bars at support/resistance.
- Enter with 1:2 risk-reward.
6.2 Breakout Trading
- Example:
- EUR/USD breaks 1.1000 resistance → Buy with stop-loss at 1.0950.
6.3 Scalping (5-Minute Charts)
- 5-10 pips per trade, high frequency.
- Example: Trade GBP/USD during London session.
🎓 Final Project: Demo Account Challenge
- Trade 10 times using learned strategies.
- Maintain a trading journal (Entry/Exit, Reasoning).
- Achieve 1:2 risk-reward consistently.