Adam Khoo
Forex
Market run within a network of bank 24 hours 5 days a week
Minimal investment
Account at @ $200
Minimal time commitment
3-6 hours a day is more than sufficient.
Need hard work
No employee, no office or inventory
Recession proof
The business of forex trading
24 hours market gives flexibility
Build your business from anywhere in the world
Plan your day trading routine around day
Generate consistent profits.
Profit returns of 5% - 20% a month are very possible.
Most common currency system
EUR Euro
USD US dollar
GBP British Pound
JPY Japanese Yen
CHF Swiss Franc
AUD Australian Dollar
CAD Canadian Dollar
NZD New Zealand Dollar
Successful traders only trade the most common and liquid 7 pairs:
EUR/USD, GBP/USD, USD/JPY, USD/CHF, AUD/USD, NZD/USD AND USD/CAD
Currency Exchange Rates
Currencies are quoted in Pairs and mostly in 4- decimal places.
EUR/USD = 1.3505
Base currency
If you want to buy Euro, you need to pay 1.3505 US Dollar. If you want to sell 1 Euro you would
receive 1.3505 US Dollars.
Currency Exchange Rates
While all other pairs are quoted to 4 decimal places (1 pip = 0.0001) , the JPY pairs are quoted to 2
decimal places
USD/JPY = 98.73
This quote tells is that 1 US Dollar is equivalent to 98.73 Japanese yen
PIP (price interest Point)
Pip is the smallest change in value for any given forex quote.
Contract Lot Sizes
A standard lot is 100,000 unit of the base currency
When you buy one standard lot of EUR/USD, you are buying 100,000 Euros with US dollars.
Other lot sizes
LOTS SIZE UNITS
STANDARD 100,000
MINI 10,000
MACRO 1,000
NANO 100
1 LOT = 100,000
0.5 lot = 50,000
Calculating forex profits
Profits/loss =
No of Pips
No. of lots
$ value per Pips Per Standard Lot
$value per pip per standard lot is USD 10 OR about USD10 for most of the actively traded pairs ( i.e.
EUR/USD, GBP/USD, AUD/USD)
GO TO https://www.mtpredicton.com/Pip-Value-Table to find out $value per pip per lot for all major
currency pairs.
Profit by going long
Going long EUR/USD
1 standard lot EUR100,000
Sell EUR/USD 1.3550
Bullish in trend
Profit 40 pips * $10* 1 standard lot = $400
Buy EUR/USD 1.3510
How to profit from forex moves
Going long EUR/USD 1 standard contract at EUR/USD 1.3510
Buy EUR/USD AT 1.3510
SEL EUR/USD AT 1.3550
3550-3510 = 40
Profits = Number of pips * $ value per pip std lot * number of lots
= 40 pips * US$10* 1 lot
= us$400
Another way of looking at it
Buy Euro 100,000 and pay USD 135,100
Sell Euro 100,000 and receive USD 135,500
Total profit earned = $400
Without leverage, you would have to invest USD 135,100 to earn USD 400 (0.29% Return). Forex
brokers allows you to leverage 1:100 times.
We employ leverage of 1:20 we just need to invest of a margin of US$6,755 (5% of position of the
position size). Our return becomes $400/6,755 =5.9% return.
Profit by going short
Going short EUR/USD
1 contract EUR 100,000
SELLEUR/USD AT 1.3560
BUY EUR/USD AT 1.3520
3560-3520 = 40 PIPS
Profits = Number of pips * $ value per pip std lot * number of lots
= 40 pips * US$10* 1 lot
= us$400
Another way of looking at it
SELL Euro 100,000 and RECIEVE USD 135600
BUY Euro 100,000 and receive PAY 135200
Total profit earned = $400
POWER OF LEVERGE
1.20 best for 10,000-dollar account
1. Scalpers 3 swing traders
Target 5-10 pips per trade Target: 50-150 pips per trade
Trade duration: second to minutes Trade duration less than a week
Charts: M1 and M5 Chart H and H4
2. Day traders 4. position traders
Target 20-40 pips per trade Target: 500-1000 pips per trade
Trade duration: within a day Trade duration: weeks to months
Charts: M15 and H1, H4 Chart: D1 (daily candles), W1
What is the secret to consistent trading profit?
Consistent profit from random outcomes.
Technical analysis
Three axioms of technical analysis
Market prices discount all known information
Market price is a reliable measure of collective human psychology.
Market price is leading indication of all fundamental data (economic and political news)
3. Price move with the trend
Uptrend > probability price will move higher.
Downtrend< probability price will move lower.
candle
Moving average indicates trend direction and support and resistance level.
A simple moving average is the simple average of the price over a pre-defined number of periods.
An exponential moving average (EMA) is a weighted MA that applies more weight to the recent
prices.
15 minutes
50 moving average.
The slope of moving average indicates the direction of market trend.
Moving averages act as support on uptrends and resistance on the downwards.
Moving averages
18
50
100
200
18 moving average is above 50 and 50 is above is 100 and 100 is above 200 and this is clears
uptrend.
It is bouncing 18 moving averages
Moving average crossover indicators indicate change is trend
6EM
Resistance zones.
When a stock fails to break resistance, it creates bearish momentum (possible short opportunity)
Avoid buying stocks when they are near resistance line.
