Edward Day - Forex Trading: Master The Basics of Currency Investing in a Few Hours— The Beginners Guide

Forex Trading - 3 Hour Crash Course

Master the Basics of Currency Investing in a Few Hours: A Beginners Guide

Edward Day

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Introduction

T rading doesnt just reveal your character, it also builds it if you stay in the game long enough. - by Yvan Byeajee

If youve ever read anything to do with trading then odds are good that youve heard all about currencies and forex trading. FX trading as its often referred to is different from stock trading in many ways and these distinctions are often lost on many traders. They jump into the forex market without paying any attention to the principles that govern the forex market and get burned.

Some traders go the opposite direction and stay away entirely from forex. They feel that the risks are far too high and that volatility and liquidity concerns are unmanageable. Then theres the newbie trader who knows nothing about stocks or forex or even the markets and simply wants to make money.

No matter which case applies to you, Id like to extend you a warm welcome. Youve made an excellent decision by purchasing this book. My aim in writing this book is to not just illuminate the wonderful world of forex trading for you but to also help you become a better trader. Forex market success often carries over into the stock market because the rigors of trading FX more often than not make one a better trader.

In addition to this the simple fact is that there is more money to be made in forex as compared to trading stocks. Its no secret that the stock markets around the world these days are dominated by high frequency algorithms that push prices too much in a given direction for the average retail trader to be able to make a profit.

Did you know that this is not the case in forex? This is just one of the many surprising things you will learn in this book.

From Beginner to Professional

T his book is aimed at beginners to the forex market. When writing books of this nature, it is essential to make some assumptions. To include the highest number of people who can find this book useful, Ive also assumed that most readers of this book will be beginners to trading as well. Even if you are a stock market trading expert, I urge you to take the time to read the sections on the basics of the forex market and about the instruments available since they function very differently to stocks.

Perhaps the biggest point of difference is the astronomical leverage you can access in the forex markets. Understanding and managing leverage is the key to your success since it both boosts your profits massively and creates losses that exceed multiples of your capital. A good forex trader understands that risk management is the key to success over the long term.

Lets get something clear right off the bat. It is easy to make money in forex. Thats right! It really isnt difficult for you to have a string of profitable trades that will increase your account balance. What is tough is keeping that money youve made. The combination of leverage and easily spotted trading conditions have caused many a trader to blow up their accounts spectacularly.

The numbers are stark. According to a study conducted by the American Fx broker FXCM, 95% of accounts that are opened end up closing within a year due to a loss of capital (Rolf, 2020). Of the remaining 5%, only a small fraction last two years and an even smaller fraction end up remaining open for five years.

Mind you, retaining capital for five years is no guarantee of profits. Making money and keeping that money are two very different things when it comes to FX trading. Does this mean you should simply stick to stocks? Hardly.

For one thing, the degree to which the forex market moves is far greater than the movements you will see in the stock market. This is a very good thing for you as a trader since the further the market moves, the greater is your money making potential. Think of it this way: If something moves just 5 points a day, theres only so much money you can make.