Forex Trading Course

Forex Trading Lessons for Beginners

Screen Shot 2013-08-13 at 11.51.01Forex means “FOReign EXchange, or the exchange of one currency to another.

In the offline sense, an individual or corporate entity may need to conduct transactions in another country’s currency, and as such will need to exchange the local currency with the foreign one. In this situation, the forex transaction is one borne out of necessity or need. The only entities that make money from this deal are the exchangers, who make a profit from the difference between the buying price and the selling price of the currencies in question.

CourseYour ProgressYour Overall Grade
Forex Trading 0% n/a
Module 1 Basics
Unit 1 What is Forex?  
Unit 2 What is a Forex Broker  
Unit 3 How Forex Traders Make Money  
Unit 4 Forex Opening Hours  
Unit 5 Pros and Cons of Forex Trading  
Module 2 Forex Terminology
Unit 1 Forex Terminology FAQ  
Unit 2 Definition of a Lot in Forex  
Unit 3 What is the Spread in Forex?  
Unit 4 What is a PIP in Forex?  
Module 3 Setting up a Trade
Unit 1 Finding an Entry Point in Forex Trading  
Unit 2 Setting the Exit Point  
Unit 3 Where to Set a Stop Loss  
Unit 4 Live Forex Trade 1  
Unit 5 Live Forex Trade 2  
Unit 6 Risk-Reward Explained  
Unit 7 Margin Requirements Explained  
Unit 8 Margin Calls  
Unit 9 Tracking Your Trades  
Module 4 Choosing a Forex Broker
Unit 1 Required Trading Capital for Forex Trading  
Unit 2 Choosing the Right Forex Broker  
Unit 3 Forex Demo or Real Account?  
Unit 4 Automated Trading: Yes or No?  
Unit 5 Which Forex Account Type Suits You?  
Unit 6 Opening your 1st Forex Trade  
Unit 7 What is a Realistic Return on Investment?  
Module 5 Money Management
Unit 1 Position Sizing in Forex  
Unit 2 Setting the Take Profit  
Unit 3 How to Use a Stop Loss in Forex Trading  
Unit 4 Leverage and Margin Calls  
Unit 5 Keeping Your Emotions Under Control  
Module 6 Setting up your MT4 Plaform
Unit 1 How to Install the MetaTrader 4 Trading Platform  
Unit 2 How to Open A MT4 Demo Account  
Unit 3 How To Install a Technical Indicator on MT4  
Unit 4 How to Use Trading Charts on the MT4 Platform  
Unit 5 How to Activate an Expert Advisor on MT4  
Unit 6 How to Use MT4 Destination Folders  
Unit 7 How to Install An Expert Advisor or Software Product onto MT4  
Unit 8 How to Calculate the Risk Exposure of an Expert Advisor  
Unit 9 How To Install a Money Management Strategy onto MT4  
Unit 10 How To Modify Stop-Losses and Take-Profits Automatically  
Unit 11 How to Evaluate How Good Your Expert Advisor Is  
Unit 12 How To Optimize the Settings of an Expert Advisor  
Unit 13 How to Keep Your Trading Software Active 24 hours/day  
Unit 14 How To Install MT4 Scripts  
Module 7 Fundamentals that Influence Forex
Unit 1 Interest Rates  
Unit 2 Economic Growth  
Unit 3 Political Stability  
Unit 4 Trade Balance  

For instance, if a company based in Britain wants to buy goods worth $162,000 from an American company and the exchange rate of the British Pound to the US Dollar is 1.6200, then the company would need to change 100,000 pounds for 162,000 dollars. If another company in the US wants to buy 100,000 pounds from the same exchanger, the exchanger will not sell the GBP at the rate of 1.6200, but at a rate of 1.6500, in which case, the company would need $165,000 to get 100,000 pounds. The exchanger would then make 30,000 US dollars from this deal. Why is there a price differential in this case? We will explain this later.

In the online arena, exchange of currencies is not conducted out of need but out of a desire to make money from the change in value of one currency to another. The value of one currency to another in the forex market is not constant but fluctuates every single second. We will also explain the reason behind this.

Origin of Forex Trading

By the onset of the Second World War in 1939, every country was either using its own currency or that of the colonial masters. By 1944, the war had dealt huge blow to the economies of the principal actors. A global financial conference was held in a town known as Bretton-Woods in the US in 1944 to discuss how the post-war global economy was to be run. Since the US was about the only economy not to be severely affected due to its late entry into the war, it was agreed to peg the world currencies to the US Dollar, and then to peg the USD to gold at a price of $35 an ounce. By 1971, the peg was no longer sustainable as a result of global financial dynamics that saw the US exposed to its own economic woes and European countries gradually recovering their economic powers. This culminated in the Nixon-led US government unilaterally abandoning the gold standard. The peg other currencies had to the USD were all dismantled and the era of floating currencies began. No longer would currencies be fixed to a peg, but their values against each other were to be strictly influenced by forces of demand and supply. This is the origin of online forex trading as we know it, where traders can make money if the currency they previously acquired increases in value, enabling them to acquire more of the currency they initially used in buying the appreciated currency.

Over time, the market which was initially dominated by banks and other major players expanded to accommodate individual traders. This has served to expand the market’s liquidity and provided a new wave of businesses affiliated to the forex market: brokerages, software providers, signals service providers, software programmers, etc.

Forex Trading Today

Online forex trading requires a brokerage account, an acceptable means of transaction, and access to a trading platform. Traders can trade from laptops, desktops, smartphones and tablet devices, you could take a look at our list of forex brokers once you have completed your studies into forex trading, or you can check out our binary options brokers list for more ways to compliment your trading or hedging strategies.

Trading Process

On a typical trading platform, currencies are paired and the pricing system allocates two prices to the currency pairs: the bid price and ask price. The bid price is the price at which the trader can sell a currency to the broker, while the ask price is the price at which a trader can buy a currency from the broker. As explained earlier in this article, the difference between both prices is the spread, which is the broker’s compensation. This is also the profit of offline exchangers.

Profits are made when the value of one currency rises against another, allowing the trader to make more money when the currencies are re-exchanged. Online, this is done by a buy-sell process. There are always two parties to a transaction. Traders can always find another trader to sell to, and another trader to buy from. The brokers use an automated system to match both sets of traders in their systems.


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Adam is an experienced financial trader who writes about Forex trading, binary options, technical analysis and more.

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