Phidcon Guide to Forex

PHIDCON GUIDE TO FOREX

TABLE OF CONTENT INTRODUCTION TO FOREX HISTORY OF EXCHANGE AND MONEY

WHAT IS FOREX

WHAT IS TRADING

CURRENCY PAIRS OPENING A TRADING ACCOUNT CANDLESTICKS INTRODUCTION TO INDICATORS HOW TO TRADE FOREX INTRODUCTION TO TRADING SIGNAL WHY SIGNALS TYPE OF ORDERS HOW TO TRADE OUR SIGNAL HOW TO MANAGE OPEN TRADE (WINNIING AND LOSING) RISK EXPOSURE FOR FOREX TRADING RISK DISCLAIMER FOR FOREX TRADING

INTRODUCTION TO FOREX

Money! Money has been one of the major measures of value and financial success, and is known to be generally accepted as a means of exchange of goods and service in the world today. Currency being its tool of exchange since the early days, following the post-barter age is very important and highly regarded by all countries. However, in the market of finances, some currencies are stronger and highly valued than others due to economics trend, political conditions and market psychology - this is one of the basis on which Forex is built. Then, what is Forex? Ever paid some worthy amount of money to an imported shoe seller in a shopping mart or an online market to get an Italian pair of shoes because you feel you would derive some comfort and confidence from it? Oh yes! That’s what Forex is like, and much more. Don’t worry, it’s not rocket science. However, unlike commodity buying, Forex does not thrive on ‘feelings’ – you have to keep your emotions in check while trading.’ Forex also known as Foreign Exchange Market is one of the most legit and largest financial market in the world which involves trading currencies on an online market with an eye on the value of currencies and trends of the world’s finances.

Until the late 90’s, Forex was a financial instrument wielded by banks, large institutions, and of course, the big boys with high net-worth and this is because you really need a rock- sized amount of money to get started. Forex wasn’t traded with peanuts. Who says technology has done more harm than good, hasn’t read of how individuals with few bucks can become retail traders. With the emergence of the internet and smart devices, Forex Trading just became easier and more accessible than ever! Individuals with small capital can bank on leverage provided by brokers and can conduct trades with a small amount of money. But! It’s not a sea you can navigate alone, and that’s why we are committed to educate, train and guide you through the essentials of Forex Trading. You sure don’t want to see your fingers get burnt. We too! You need a great deal of know- how and consistency of practice to become a seasoned trader and we’re super-ready to feed you with more knowledge on forex trading.

HISTORY OF EXCHANGE AND MONEY

Since the inception of age, humans have had need for goods produced by people in their neighborhoods and other geographical areas which later developed into nations. Also, the need to trade out excess or surplus goods for the ones they lacked was identified. In a bid to exchange these goods from one nation to another, the bartering system was adopted.

The bartering system was simply based on the premise of exchange of value. One, who wanted coal to keep his house warm, cook and drive activities, would be willing to give out a basket full of a bag full of wheat grains. Sounded funny right? The system worked for the ancient man until the system was faulted, as the commodities could not be divided into units of equal amounts and the exchange value depended on the quality of the

commodities, which mostly depreciates over time. A good example is animals which decline with time to a state of loss. Think of it as wanting a bowl of ice cream and giving out two large bunches of plantains, the value of the two goods aren’t the same; hence, commodity barter was not an even form of exchange. Another fault in the barter system was that you needed to find someone who’s in need of the commodity you have in excess or are willing to give out for the one you need. Barter evolved from commodity exchange, in the late ‘BCs into money, coinages being the first official currency minted by King Alyattes of Lydia (Now Turkey).

In order to make trading easier, money was created, and as one would have thought, if money was made from papers or metals, as in the case of the olden days, then, why is money scarce?

This is because one of the characteristics of money is that it has to be valuable: unlike barter, money can serve as a better unit of exchange and as a store of value. If not, there would be no essence of business today and exchanging goods would have been more difficult in this new age.

In the ancient ages, a common form of money, usually precious metals such as gold, bronze or silver and cowrie shells, where used to transact businesses (buying and selling).

For ages, the currencies of the world were endorsed by gold, in which a piece of paper currency is given by any world government to represent a real amount of gold stored in an underground safe by that government. At this point, countries had issues with the value of gold and were affected by inflation at another time. This problem saw the beginning of what later metamorphosed to Foreign Exchange.

Thus, Foreign exchange can be seen as a stream of solutions which provides for each country to produce their own currency and to implement policies to guide their monetary decisions and activities. The beautiful view is that it avails countries with the room to participate in international trade by providing a system of exchanging one currency for another relative to their exchange rate.

WHAT IS FOREX?

I can almost hear your heart yearning to know more about forex and delve into trading. Wait! Let’s take our first baby steps. What is Forex?

If you live in the United States, and you’re travelling to Japan to purchase electronic goods, or see a cousin who just gave birth, you’ll be surprised that the new shiny $1000 notes in your wallet will take you no farther than your

country’s airport. What do you do in this case? Here comes forex! The green light is on, and you think of exchanging your dollars into the equivalent value of the local currency of Japan - YEN, so that you can buy your electronics and also perform transactions. What more? You won’t get stranded on the streets of Japan before the new mother comes pick you up. The rate at which you exchange the currencies (USD to YEN) is known as the exchange rate, and all of this forms the basis of foreign exchange.

Forex commonly referred to as ‘FOREX,’ ‘Retail Forex,’ ‘FX,’ or ‘Spot FX’ is a blend of the words financial currency and exchange. It’s a financial instrument that exchanges money from one country’s currency to another country’s currency for example, exchanging US’ dollars for Britain’s pounds. This means forex is the simultaneous buying of one currency and selling of another. Unarguably the largest and most liquid market in the financial world, Forex trading volume exceeds $4 - $5 trillion USD per day. Comparing this to the trading volume of the New York Stock Exchange a day, about 28 USD billion, forex exchange market is indeed large.

Foreign Exchange Market (Forex Market) is a decentralized global market unlike other commodity trading and other financial markets, which has a centralised market for transactions, and is run at specified time of the day. Forex market runs electronically (online), over-the-counter, and exchanges national currencies over a 24-hour period. Wow! It’s interesting to know that it doesn’t matter whether you’re a nighthawk or a day lark; Forex is just a market for all times.

FOREX TRADING: What it is and what it is not

 Forex Trading is not a Get-Rich-Quick Scheme! Looking for a Ponzi scheme or money making pyramid that doubles your money in two weeks? If yes, sorry to disappoint you, as sweet and as profitable as Forex trading may be, it is pertinent to know that it’s not an investment for people looking for quick ways to get rich. It’s a trade that requires patience, skill and commitment to learning.

 Forex trading is not a trade for people who have an anti-loss skin. In Forex, there’s no 100% win-win situation. Just like many other investment/trade, it has its own level of risk involved, even experienced traders still run into losses once in a while but with proper planning, adequate training and signals from seasoned brokers, the risk can be put to the barest minimum.

 Forex trading is not a trade for those who lack the discipline required for trading. If you can’t stick to a diet or your exercise routine, it might be a little difficult to trade. This simply means trading requires discipline. You need to be disciplined enough to allow your funds grow before you stop trade or take profit. You must be ready to really spare few bucks.

 Forex trading is not for lazy people.

It is a skill that takes time to learn and requires diligence. There’s no shortcut to forex trading, you have to commit yourself to the required skills and strategy to make you a

seasoned trader. Of course! It’s a profitable trade, but it’s a trade that opens you up to learning on a daily basis.

You can be a successful forex trader, but just as life itself, it requires diligence, commitment, patience, discipline, a good analytical sense and a great sense of judgment.

WHAT IS TRADING

Forex market is driven by the exchange of currency pairs, and this activity is referred to as trading. Just like many other financial markets, the foreign exchange market is subjected to demand and supply, and is a factor of the value of one of the currency pair against the other. It is important to know that the fact that one currency has fallen in value in relation to its other currency pair does not mean it has depreciated relative to the other currencies. Taking a very simple example, quoting the currency pairs USD/JPY, a strong demand for the US Dollar from Japanese who possess Yen, would initiate an exchange activity of their Yens for Dollars. The value of the US Dollar will

appreciate (rise) while the value of the Yen will (depreciate) fall. However, this transaction only affects the JPY/USD currency pair and will not for example, cause the USD to depreciate against the Euros.

One of the major objectives of trading forex, is to exchange one currency for the other in a pair, with the prospection that the sold currency will lose value, become less demanded for and the bought currency will increase value, thereby causing a change in price and increase of demand with reference to the bought currency. You remember our FX quote (Base currency/Quote currency); we would be referring to this currency pairs as we move on understanding what forex trading is.

In forex language, buying and selling the base currency is referred to as ‘going long and going short.’ Going long also known as taking a ‘long position,’ is buying of the base currency and selling the quote currency, in expectancy that the base currency will appreciate while you sell it back at a higher price.

Going short also known as taking a ‘short position,’ is selling of the base currency and buying the quote currency in expectancy that the base currency will depreciate while you buy it back at a lower price.

How do you remember which is long and short position? Think of long as buying, and short as selling, all expressed in the base currency.

In understanding trading, it’s quite important to understand some terms commonly used. This includes:

Base Currency: This is the first currency in an FX quote (i.e. a currency pair). It is the measure of how much the base currency is worth in relation to the quote currency. E.g. If USD/JPY rate equals 106.64; this means that one unit of the base currency (1USD) worth 106.64 Japanese Yen. With the exceptions of certain currencies (The British pounds, the Euro, and the Australian and New Zealand dollar) in Forex markets, the United States Dollars (USD) is regarded as the base currency in FX quotes.

Quote Currency: This is the second currency in an FX quote. Also known as counter currency or pip currency, and it’s the currency which profit or loss not realized is expressed in.

Pips: Every human being is made up of that tiny bits of life called cell, and every growth or degradation it experiences is experienced in the person’s overall health. Hope you

didn’t get bored with that jargon. Let’s hope you didn’t. A pip (price interest point) just like cells is the smallest unit of price for any currency. It is important to know, that pip is the smallest price movement (or increment) for any currencies, and is how profit or loss is measured. A pip is the last decimal place of the exchange rate of a quotation. In the example below, If the USD/JPY rate increases from 106.60 to 106.64, this means 4 pips have been moved. 1 pip would be 0.01; hence, 4 pips would be 0.04.

Bid Price: is the price set, at which the market is willing to buy a currency pair in the Forex market. At this price, the trader can sell the base currency. It is shown on the left side of the quotation. Ask Price: is also called the offer price, and is the price at which the market is willing to sell a currency pair in the Forex market. At this price, you can buy the base currency. Bid/Ask Spread: The spread is the difference between the bid and ask price.

Leverage: Forex is best traded with a tangible amount of capital, say at least $1000. Are you worried that you don’t

have that much? Worry not! Leverage is one of the tools of forex trading that gives access to individuals with low capital to enter the market, riding on the wings of seasoned brokers who offer varying leverage. It allows you to trade with only a fraction of the required capital value (margin) needed to trade. Leverage is the ability to trade larger positions with a small amount of capital, and is the ratio of the capital used in a transaction to the margin. Leverage can be 1:100 or 1:200, depending on brokers. This means with a margin trading ratio (leverage) of 1:100, you as a trader with an invested capital of $100 can trade with USD $10,000.

Margin is that particular amount of capital required to trade, and is the difference between the full worth of your trading position and the amount you borrowed to trade with from your broker. Margin is expressed in lots, where a lot is the minimum amount of currency you possess to buy. Imagine going to a mart to buy a single ear ring for the left ear alone. I’m pretty sure the mart attendant wouldn’t sell to you. It’s wise and understandable to buy at least two of the ear rings to make a pair. thus, we can say, that the earrings comes in pairs or ‘lots of 2.’ consider your currencies as you would your

earrings, it’s also an unwise trading action to just buy or sell 1 USD. Hence, they come in lots of $10, 000 or $1000, 000.

Let’s see a typical example of a trading action and how profit is made.

Let’s assume the current bid/ask price for USD/ YEN is 106.64/106.68 Meaning: You can take the long position (buy) for 1 US dollars with 106.64 or Take the short position (sell) 1 US dollars for 106.68.

Evaluating the economy and political stability of a country, you can speculate the rise or fall of its currency. Taking it that US dollar will be undervalued against the YEN, you would buy US dollar (simultaneously selling YEN), and then wait for an increase in the exchange rate. So you make the trade: If $1 = 106.64, then, to buy $10,000 will be $10, 000 X 106.64¥ Therefore, To buy 10, 000 US dollars you pay ¥ 1066400

As projected, US dollar strengthens to 116.64/116.68

Now, to realize profits, you sell 10, 000 US dollar at the current rate of 116.64, and receive ¥ 1166400. 10, 000 US dollar X 116.64, = ¥ 1166400.

NOTE: You bought 10, 000 US dollar at 106.64, paying 1066400 YEN. You sold 10, 000 US dollar at 116.64 receiving $1166400 YEN.

Total profit = ¥ 10, 0000.

You can now see for yourself how trading is being done. However, it’s also involves some analysis that helps you make well-calculated and profitable decisions.

Are you still thinking of more reasons why you should trade forex? Let’s take a look at few more reasons:

1. Low transaction costs: Compared to other financial markets such as equity, forex trading is cost-effective and does not involve any commission or governmental fees. Traders make profit on

spread especially, when the trade market is entered and exited before night, in which negative prices may apply.

2. High Liquidity: It’s a very liquid market. Currency pairs can be easily bought and sold, and you can also enter and exit market easily.

3. Leverage: The market allows you to enter the market on a basis of leveraging, where you can borrow the larger fraction of the required full capital value to make up your small capital. With leverage, profits and losses are amplified, and you can initiate a large trading action with a relatively small capital.

4. Profit: Forex trading allows traders to analyse, monitor and project increase in value of currencies (appreciating) and decrease in value of currencies (depreciating). Also, there are different profitable forex pairs for trading.

5. Demo Accounts: As a beginner, forex trading allows you to trade in a demo account, and understand the system, before you put in real money. This way, you won’t quickly get your finger burnt.

CURRENCY PAIRS

No one ever enters the kitchen without having an idea of what the recipe looks like right? Yes, same thing applies to trading in the forex market. A trader who doesn't have a concrete idea about the currency pairs is only but a joker. The first thing you must know about currency pairs is that

you're putting one currency against the other. In other words, you are exchanging one currency for another.

The knowledge about currency pairs in the forex market is one that most people in the beginning stage of learning do not pay good attention to but it is the basis of whether you'll become a profitable trader or not.

The next few reads will be providing you with the ride to understanding currency pairs, and whether you've been trading for long or you're new to this market, you'll definitely be learning something new.

Currencies is the most important tool to people in the world today and is not just exchanged for commodity buying and tourism, but is needed to serve as a medium of carrying out foreign trade (import and export) and business. Also, it is traded by institutions and retail traders for profits. Hence, its market is one of the most active financial markets.

Currencies are simultaneously traded as exchange rate pairs in which one unit of a particular currency is sold to buy units of another currency at a particular exchange rate which reflects how the condition of a country’s economy is, in comparison to another.

The most popular currencies and its country exchanged in the FX market include the following, with USD being the most traded:

Symbol Country Currency

USD$ United States Dollar

EUR € Euro members Euro

JPY ¥ Japan Yen

GBP £ Great Britain Pound

CHF Switzerland Franc

CAD Canada Dollar

AUD Australia Dollar

NZD New Zealand Dollar

As earlier stated, currencies are traded in pairs, in which the value of one currency is relative to the other. This pair is referred to as FX Quote. A FX quote refers to currency pairs traded in the FX market in which the currency stated first is the Base currency and the second of the pair is the Quote currency or Counter currency.

E.g.: FX Quote: USD/JPY Base Currency: US Dollars (USD) Quote Currency: Japanese Yen (JPY)

These currency pairs are referred to as the combination of the abbreviated form of the individual currencies.

For instance when you're trading the British Pound against the U.S Dollar, the forex market present the pair as GBPUSD (GBP- Great Britain Pound, USD- United States Dollar). Straight forward right?

Let's go a little further. For every currency pair, there's a Base currency and there's a Quote currency. The base currency is the first currency in the pair and the quote currency is the other currency in the said pair. Using the GBPUSD pair as an example, the GBP is the Base currency while the USD is the quote currency.

HOW BUYING AND SELLING OF CURRENCY WORKS.

Having understood that a currency pair involves trading one currency against the other. How then does one buy or sell?

As in our previous illustration of the GBPUSD pair, how do you buy the GBP or the USD or how do you sell either? You need to know that buying and selling of currencies doesn't require you to place two different orders when buying or selling.

So, here's how it works. Placing a "Buy" order on a currency pair simply implies that you're buying the Base currency and selling the Quote currency at the same time and same thing applies when you place a "Sell" order. You're simply saying you want to sell the Base currency and buy the quote currency simultaneously.

For example Buying the GBPUSD means you're buying the GBP and selling the USD simultaneously also Selling the GBPUSD means you're selling the GBP and buying the USD.

Straight forward right?

CLASSES OF CURRENCY PAIRS

There are 3 known classes of currency pairs. The MAJORS, The MINORS and The CROSSES.

MAJOR CURRENCY PAIRS

When you think of football, what Lionel Messi and Christiano Ronaldo are is what the major currency pairs are. Everyone wants to be attached to them.

They are the most popular and their level of liquidity is high.

Below is a table showing the major currency pairs.

CURRENCY PAIR COUNTRIES CUCCURRENCY NAME NICKNAME

E Eurozone/ United EUR/USD Euro/ US Dollar ______States

US Dollar/ USD/JPY United States/ Japan ______Japanese yen

United Kingdom/ British pound/ US GBP/USD Sterling or Cable United States Dollar

United States/ USD/CHF US Dollar/ Swiss franc Swissy Switzerland

United States/ US Dollar/ Canadian USD/CAD Loonie Canada dollar

A Australia/ United Australia dollar/ US AUD/USD Aussie or Oz States Dollar

New Zealand/ United New Zealand dollar/ NZD/USD Kiwi States US Dollar

Did you notice the trend? Every major currency pair involves the USD. Any currency pair that doesn't have the USD as the Base currency or Quote currency is not a part of the major currency pair family.

MINOR PAIRS AND CROSSES

Basically, cross pairs are those currency pairs that are without the USD. The minor pairs meanwhile are a fraction of the cross pairs. These cross pairs do not offer as much liquidity as the major pairs, but this doesn't mean they are not to be traded. While everyone wants to trade the major pairs, there are times that the major pairs are not favorable and trying to force a trade on them might result to over trading.

You need to know that there's a slight difference between the minor pairs and the cross pairs.

The cross pairs generally do not include the USD while the minor pairs (although in the family of the cross pairs) are the major pairs in the cross pairs. These minor pairs include the Euro (EUR), British Pound (GBP) and the Japanese Yen (JPY). They are the "big boys" in the cross pairs.

EURO CROSSES

CURRENCY PAIR COUNTRIES CURRENCY NAME

EUR/GBP Eurozone/ United Euro/ British pound kingdom

EUR/AUD Eurozone/ Australia Euro/ Australia dollar

EUR/NZD Eurozone/New Zealand Euro/ New Zealand dollar

EUR/CAD Eurozone/ Canada Euro/ Canadian dollar

EUR/CHF Eurozone/ Switzerland Euro/ Swiss franc

JAPANESE YEN CROSSES

CURRENCY PAIR COUNTRIES CURRENCY NAME

EUR/ JPY Eurozone/ Japan E Euro/ Japanese yen

GBP/ JPY United kingdom/ Japan British pound/ Japanese yen

AUD / JPY Australia/ Japan Australia dollar/ Japanese yen

NZD / JPY New Zealand / Japan New Zealand dollar/ Japanese yen

CAD / JPY Canada/ Japan Canadian dollar/ Japanese yen

CHF / JPY Switzerland/ Japan S Swiss franc/ Japanese yen

BRITISH POUND CROSSES

CURRENCY PAIR COUNTRIES CURRENCY NAME

GBP/ AUD United kingdom/ Australia British pound/ Australia dollar

GBP/ NZD United kingdom/ British pound/ New Zealand dollar New Zealand

GBP/ CAD United kingdom/ Canada British pound/ Canadian dollar

GBP/ CHF United kingdom/ British pound/ Swiss franc Switzerland

OTHER CROSSES

CURRENCY PAIR COUNTRIES CURRENCY NAME

AUD/NZD Australia/ New Zealand Australia dollar/ New Zealand dollar

AUD/CAD Australia/ Canada Australia dollar/ Canadian dollar

AUD/CHF Australia/ Switzerland Australia dollar/ Swiss franc

NZD/CAD New Zealand/ Canada New Zealand dollar / Canadian dollar

NZD/CHF New Zealand/ Switzerland New Zealand dollar/ Swiss franc

CAD/CHF Canada/ Switzerland Canadian dollar/ Swiss franc

OPENING A TRADING ACCOUNT The moment you've always fantasized about is finally here. The stage is set, you're invited to come up on stage, but how do you go about it? Well, for trading forex, opening a trading account normally follow 3 simple steps after you must have of a necessity selected a good forex broker; We recommend that you use HotForex. Follow this link to register now https://www.hotforex.com/?refid=336553

In opening an account with a Forex online broker, these 3 simple steps are followed:

Selecting the type of account (brokers usually offer 3 types: Micro, Mini and Standard accounts)

Registration

Account activation

Before starting to pour out your hard earned money into this system, it is a good idea that you open a demo account (you can open different demo accounts with different brokers so you can select the one which works best for you) which comes with zero price tag. It's absolutely free.

TYPES OF TRADING ACCOUNTS.

There are different types of forex account that you can decide to open either for yourself, on behalf of your company, or for any loved one. The type of account that you can opt for depends on your capital.

Beginners or people with low capital are advised to open a "mini" or "micro" account while the "standard" account is for those who are experienced in the market or those with large capital. Cents accounts are normally offered by some brokers (rare though) with minimum deposits of as low as $1.

REGISTRATION PROCEDURE

The registration process requires that you fill out a registration form with your personal data. Some documents will be required of you to tender in the registration process. Most regulated brokers will request for:

and sometimes also some document that

* Proof of identity (copy of ID, passport or driver’s license)

* Proof of residence address (bill for electricity, water or telephone services in your name that show your address)

* Proof that you are the owner of the payment option that you are going to use to deposit/withdraw funds.

These documents are requested to comply with regulations of the regulatory bodies such as CySEC or FCA on customer safety and against money laundering.

ACCOUNT ACTIVATION

Once the broker has received all the necessary paperwork, you're going to get an email notification for you to activate your account. Then a final email should be sent to you with your username, password and instructions to transfer initial funds into your account.

Trading forex can always go wrong if you trade with the wrong broker. So it is safe to say, behind a success forex trader is the competency of a broker. Not only your skill makes you a successful trader, your broker also determines how successful you'll become and that is why we recommend Hotforex.

HOTFOREX?

HotForex is an award winning forex and commodities broker, providing trading services and facilities to both retail and institutional clients. Through its policy of providing the

best possible trading conditions to its clients and allowing both scalpers and traders using expert advisors unrestricted access to its liquidity, HotForex has positioned itself as the forex broker of choice for traders worldwide.

What does Hotforex provide?

HotForex offers various accounts types, trading software and tools to facilitate individuals and institutional customers to trade Forex and Derivatives online. All Retail, Affiliates and White Label clients have the opportunity to access various spreads and liquidity via state of the art automated trading platforms. HotForex provides an unparalleled variety of account options that clients can select to enjoy a tailored trading experience that perfectly suits their needs. Coupled with superior trading conditions and lightning fast execution, HotForex provides all the tools and services needed for clients of any level to realise their trading ambitions.

METATRADER 4 AS A TRADING PLATFORM

The MetaTrader 4 is a trading platform that allows online forex traders to carry out their speculations and to place their orders in the market. The network consists of both a server and client component. The server end is provided to

the broker to run and the client component is provided to the broker's client for speculating, placing orders and to manage trading accounts.

Wikipedia has the following to say about the components of MetaTrader 4

The complete MetaTrader 4 package includes the following components:

MetaTrader 4 Client Terminal - the client part. Provided free by brokerages for real-time online trading and as Demo (practice trading) accounts. This provides trade operations, charts and technical analysis in real time. The internal C-like programming language allows users to program trading strategies, indicators and signals. 50 basic indicators are included, each of which can be further customized. The software runs on Windows 98/2000/XP/Vista/7. Some users have reported success using Wine on Linux for the client terminal and on Mac using WineBottler.

MetaTrader 4 Mobile - controls a trading account via mobile devices such as mobile phones or PDAs. Runs on Windows Pocket PC 2002/Mobile 2003,[21] iOS,[22] and Android.[23]

MetaTrader 4 Server - the core of the system, the server part. Designed to handle user requests to perform trade operations, display and execution of warrants. Also, sends price quotes and news broadcasts, records and maintains archives. Works as a service. Does not have a separate interface.

MetaTrader 4 Administrator - is designed to remotely manage the server settings.

MetaTrader 4 Manager - designed to handle trade inquiries and manage customer accounts.

MetaTrader 4 Data Center - a specialized proxy server and can be an intermediary between the server and client terminals. It reduces the price quote sending load on the main server.

Learning to use the MetaTrader 4 allows the trader the opportunity to use many of the Indicators that leads to success in the forex market.

The Platform can be accessed either through the desktop, PC or even mobile phones.

HOW TO TRADE USING METATRADER 4

Having downloaded the MetaTrader 4 either on your mobile phone or computer system,

Link your Hot forex account to your mt4.

First click on “manage account”

Click on the add account sign (+)

Click on Login to an Existing account

Find broker, for Hot forex, check your mail to be sure which is correct.

Input your login details and boom, you’re ready to trade.

Placing a trade comes as easy as selecting the currency pair you want to trade, then select open chart which then leads you to screen where you'll be able to analyze the market.

After analyzing the market, you click the new order bottom which leads you to the part where you are able to either buy or sell, enter your stop loss and take profit and you'll be able to enter your desired trade size (in lots) in the 'Volume' box and then click 'Sell or Buy', with either 'Sell Stop and Sell Limit’ or ‘Buy Stop and Buy Limit’ selected as the order type. Market execution is also an order type, but it is never advisable.

CANDLESTICKS

The great thing about candlesticks in forex is that you're given the opportunity to analyze the body of the candles. All the features, the shadows and even the skin color (Body color) of the candle will determine whether a trader will place his money to buy or sell in the market.

PARTS OF THE JAPANESE CANDLESTICK

The things you should look out for on the candlestick are

The upper shadow

Lower shadow

High

Low

Open

The body of the candle.

The Japanese candlestick is relevant to every of the time frame. 1 minute, 1 hour, 1 day, whichever way you want it, they remain relevant.

HOW THE COLORS OF THE CANDLESTICK FORMS?

If the open is above the close, then the body of the candle will be colored and if the open is below the close, then the body of the candle will remain as white.

BUYING AND SELLING USING CANDLESTICKS

In the forex vocabulary, the bulls are the buyers while the bears are the sellers. The further the open is from the close, the longer the candle stick and the closer the open is to the close, the shorter the candlestick.

A long white Japanese candlestick implies a strong buying pressure, as buyers (the bulls) were more aggressive. A long

black or colored candlestick implies a strong selling pressure, as sellers (the bears) were more aggressive (tearing the bulls apart).

Also, it is good that you know how the shadows on the candlesticks work.

The upper shadow signifies the high session and the lower shadow signifies the lower session. Long shadow indicates that trading happened way beyond the open and close while a short shadow implies that trading happened around the open and close regions.

What if a candlestick has a longer upper shadow and a short lower shadow? It simply means that there was a high bid price from buyers but sellers came in and dragged prices back down to end the session back around the open price.

And if a Japanese candlestick has a shorter upper shadow and a longer lower shadow, it means that sellers forced a lower price but buyers came in and pulled prices back up to end the session back around its open price.

SPINNING TOPS

What if there was no one to surrender power between the sellers and the buyers, do we just go home and call it a day?

No, this situation where there's an indecision between the buyers and sellers is called spinning top patterns and the effect on the candlestick is that there will be a short distance between the open and the close with long upper shadow and lower shadow. Here, the color of the candlestick wouldn't matter.

MARUBOZU

Have you ever come across a man with a bald head walking under the sun? Does your brain signal anything to your hand at that moment? Well, MARUBOZU is a Japanese word that means 'bald head'. Marubozu in forex refers to a bald candlestick. A candlestick without shadow.

In a marubozu, the open price equals the low price and the close price equals the high price.

DOJI

For Doji, the open and close price are same or the candlestick have an extremely small body. The Doji situation suggests an indecision or a struggle.

HAMMER AND HANGING MAN

The hammer forms during a downtrend. It is a bullish reversal pattern. It is named because the market is

hammering out a bottom. It is not safe to place a buy order when you see a single hammer pattern, there has to be more hammer pattern to confirm if you should truly buy.

The hanging man forms a bearish reversal pattern that shows that sellers are outnumbering the buyers. It can also market a strong resistance level.

Both the hammer and hanging man are single candlestick patterns.

ENGULFING CANDLESTICK

There are two types of the engulfing candlestick.

The bullish engulfing candlestick and the bearish engulfing candlestick.

The bullish engulfing pattern gives an idea that a strong up move may be coming. It forms in a reversal pattern. When a bearish candle is followed immediately by a larger bullish candle, then a bullish engulfing pattern has formed.

The bearish engulfing pattern on the other hand forms when the bullish candle is immediately followed by a bearish candle that is longer than it. The implementation is that sellers overpowered buyers and that a strong move down could happen.

INTRODUCTION TO INDICATORS

Because of the unpredictability of the forex market, most traders are always actually looking for the "perfect" moment to enter into the market but in all actuality, there is no singular approach to exchange the forex markets hence the need for indicators.

Forex indicators or Forex Technical Analysis Indicators are used to forecast the fluctuations in price in the currency market. They are also known as technical indicators. They guide the trader as to when to enter and exit the market.

There are 4 types of indicators available to forex traders.

TYPES OF INDICATORS

1. Trend indicators

Trend indicators help traders to identify currency pairs that are trending up or trending down. These indicators help pointing out the direction of a trend and they have the ability to discern if a trend truly exit or not. Some of the technical forex indicators to determine the trend are:

*Moving Average Indicator which can average the price of the currency pair over a given time. The moving average indicator carries with it different other indicators of which simple moving averages and exponential moving averages are the popular ones.

*Ichimoku Indicator which can show current trends, indicate when a trend can be over turned and it also shows support and resistance level.

*Average Direction Index Indicator (ADX). While the ADX doesn't indicate whether the market is trending up or down, it sure indicates whether the price is trending or ranging.

2. OSCILLATOR INDICATORS

The oscillator indicators gives the trader an idea of how momentum is building over a particular currency pair. It moves high when price moves high and it moves low when price drops. There are four different types of oscillator indicators. They are;

*Moving Average Convergence/Divergence or MACD indicator which determines the force behind the market. It

shows when the market gets tired, when it needs correction or when it needs to rest.

*The Relative Strength Index or RSI indicator shows when a currency is overbought or oversold so the trader can take a reversal.

*Stochastics indicator indicates overbought or oversold regions, possibly making a price reversal.

*The Commodity Channel Index or CCI helps traders to sell breaks below +100 and buy breaks above -100.

3. VOLATILITY INDICATORS

When the price of a currency moves wildly up and down, it is believed to have high volatility or unpredictability meanwhile a currency pair without much dangling is said to have low volatility. Volatility Indicators helps the trader determine the volatility of a currency pair.

Some of the best technical indicators to measure volatility are:

*Bollinger bands which puts prices in a kind of box between the two outside lines. While the price is constantly rotating

around the middle line, it will go and test levels beyond the outside lines to determine the volatility.

*The Average True Range indicator(ATR) gives an idea of the distance between the low and high price over the previous set number of bars, which usually is 14. It is one of the best tools for measuring volatility

4. SUPPORT AND RESISTANCE

Every analyst of the market must understand the concept of support and resistance. It shows the power of both the buyers and sellers in the market over a given time. Two of the technical Forex indicators for support and resistance are Pivot Points and Donchian Channels.

*Pivot Points shows the levels that price might have a challenging time breaking through.

*Donchian Channels show the high and low prices over a long period. They display lines that can also act as support or resistance if the price comes into contact with them again.

These four Indicators are the most frequently used by forex traders but this doesn't guarantee money making especially for newbies in the forex world. With time and experience, you'll be able to find the ones that you're more comfortable with and you'll be able to make the most out of the most liquid market in the world.

HOW TO TRADE FOREX

Irrespective of any style of trade you chose (Short term or Long term), you must know why you want to trade a particular currency against the others, when to enter the market that’s placing your order and when to leave the market that’s closing your open position despite the outcome of such a trade. Until you learn and master this, you will keep chasing what is not lost in the market like a soldier who shoots on everything that appear to him instead of concentrating on his target.

Emotions run in our veins and they are given to us to enjoy and not to enjoy us. As a trader who aims to become prolific in his game, the number one thing to deal with must be emotion before, during and after each trade irrespective of its outcome. You cannot hold on to a losing trade expecting it to suddenly turn into a winning trade, and if it

does, you will not still be seen as a good trader. A good trader set his target before placing any trade based on the rules of the system using per time and these rules are what determines his entry and exit from the market because the market has no respect for anyone and it is forever open.

Determine your entry and exit before actual placing of any order in the market Entry and exit must be based on the rules of your system not the calculation in your head You must respect your system’s rules for it to respect you Knowing there is always another opportunity to place a good trade

INTRODUCTION TO TRADING SIGNAL

I will not go into explaining terms used in FOREX except as it relates to this cause because I believe you know what FX is all about before considering expert opinion (FX Trading Signal) on it.

This short manual will be dealing with my trading signal and how to trade it profitably. Every trading strategy one employs has its own Dos and Don’ts which must be followed strictly before one can really make any meaningful profit on consistent basis.

Trading FX is not the same thing as playing gamble or any other random game out there, but a profession and chosen career which must be treated as such or else loss and total wipe out of one’s account is eminent.

Emotions of any kind have no place in this profession and traders must learn to act according to the rules of any system or strategy employed.

PHIDCONFX SIGNAL has its own rules and must be followed religiously to achieve the desired result.

WHY TRADING SIGNAL “EXPERT OPINION”

There are many who want to trade and benefit from vast opportunities available in the FX market on daily basis but do not have the needed time to really analyzed the open market and make an informed decision, hence they look for expert opinion that will allow them to make consistent profit from the market.

Expert opinions (Trading Signals) have been around for as long as the market itself and traders have been making use of them either free or paid for.

PHIDCONFX TRADING SIGNAL is generated based on combinations of Price Action, Moving Average, Candle Stick and years of experience in the FX market. TYPES OF ORDER These are types of orders you will be expected to place using my trading signal and all of them will be explained under How To Trade My Signal

Market Execution or Market Order Buy Limit Sell Limit Buy Stop Sell Stop

HOW TO TRADE OUR SIGNAL

Our signals are to be traded as sent for better results. I will advise you on best entry and exit point based on my system generated signals coupled with years of experience.

LEVERAGE I strongly suggest you trade with a broker that allow 1:500 leverage and at worst 1:100 except you have more than $10,000 in your trading account.

REQUIRED AMOUNT I suggest minimum of $500 to be able to place a trade of micro lot of 0.05

NUMBER OF OPEN TRADE I recommend maximum of two open traders (Positions) at any given time to minimize risk exposure in case of losing trades

EXIT TAKE PROFIT (TP) TP is set between 20 to 50pips depending on the signal generated on a particular symbol

STOP LOSS (SL) SL is set between 20 to 40pips depending on the signal generated on a particular symbol but we may advise exit from a position at times based on our system even though our SL has not been hit

PLACING ORDER (TRADING) The term “order” refers to how you will enter or exit a trade

1. Market Execution or Market Order A market order is an order to buy or sell at the best available price.

For example, the bid price for EUR/USD is currently at 1.12436 and the ask price is at 1.12449

Picture 1

If you wanted to buy EUR/USD at market, then it would be sold to you at the price of 1.12449.

2. Buy Limit or Sell Limit Buy Limit is the order place below price and price then goes up

Sell Limit is the order place above price and price then goes down

Picture 2

3. Buy Stop or Sell Stop Buy Stop is the order placed above price and price keeps going up

Sell Stop is the order placed below price and price keeps going down

Picture 3

Most of my signals that will be send to you will be pending orders that’s buy or sell when the price reach a certain level in the market but I might send you Market Order too which will come with Buy or Sell now instruction.

Pictures 4 & 5 - Buy Stop Order

It means you will place a pending buy order (Buy Stop) in the market when you receive a signal to Buy Stop from us.

This is how you will input the signal into your order windwo on your Meta Trader.

Example

Buy Stop order on EUR/USD

Entry @ 1.12655 Stop Loss (SL) @ 1.12155 (50pips) Take Profit (TP) @ 1.12715 (50pips)

Pictures 6 & 7 - Sell Stop order

Example Sell Stop order on EUR/USD Entry @ 1.12305 Stop Loss (SL) @ 1.12805 (50pips) Take Profit (TP) @ 1.11805 (50pips)

Picture

HOW TO MANAGE OPEN TRADE

Trade management is very important in the life of a trader and it is a major factor that differential between the winner and the loser in the FX market.

Basically, I will tell you what to do once any of the positions is opened.

You can either open two positions when placing your trade and close one when the market move 20 to 30 pips in your favour and close the other when it moves 50pips in your favour or open one position and close half of your position when the market move 20 to 30pips in your favour and the remaining half when it reach 50pips in your favour.

For example, let us say your account balance is $500 and your account leverage is 1:500 and you want to place this below signal. Buy Stop order on EUR/USD Entry @ 1.12655 Stop Loss (SL) @ 1.12155 (50pips) Take Profit (TP) @ 1.12715 (50pips)

Scenario 1

Place two micro trades at the same price given

1st 0.03 lot - TP @ 30 pips (1.12955)

2nd 0.02 lot - TP @ 50 pips (1.12715)

You can also use trailing stop though not really advised because it might put you out of the market if the market is not really trending.

Trailing Stops… (Only Use them when the market is trending)

Trailing your stop as a trade moves in your favor can be a very good Forex trade management technique. However, trailing has limitations and you don’t want to just blindly trail your stop. Scenario 2

Open one single trade of 5 micro lots. Close half of the trade when the market move 20 t0 30pips in your favour and the rest at 50 pips.

Using of Stop Loss cannot be over emphasized in trading and every trader must determine his risk on a trade before placing the actual trade. Stop Loss therefore will save you from incurring unnecessary large losses in the market by taking you out of unfavourable trades.

RISK EXPOSURE FOR FOREX TRADING

Account management deals majorly with how you manage both good and bad trades.

Many experts advised not to lose more than 2% to 5% of your account balance on a single trade and I believe that is good so that one will have ample opportunities to make good trades.

Cut your loss as quickly as possible and let your profit take care of your loss.

Don’t let any trade that has move 10 pips in your favour to become losing trade against. Once market moves 10 pips in your favour, learn to move your Stop Loss to break even that’s to your entry price. Your entry price now becomes your Stop Loss and should in case the market move against you and hit your Stop Loss (entry price), you will have nothing to lose in that particular trade.

We strongly advised that you open account only with FX brokers that allow between 1:100 and 1:500 leverage to enjoy our trading signals.

RISK DISCLAIMER FOR FOREX TRADING

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Past performance is not indicative of future results. 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.