Chapter 1. Introduction (FX)

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Foreword
From MYTS Head Tutor, Phillip Konchar

Every day, huge numbers of brand new traders start trading for the first time on the Foreign Exchange markets (also called Forex, or FX for short).

More often than not, they were attracted to Forex because they believe trading currencies are an easy way to make fast profits, diving right in without first educating themselves about how it actually works. Don’t make the same mistake.

Even if you think you know, or have an idea, of how Forex trading works, it’s still important to get the best trading education possible. Even experienced traders keep learning and bettering themselves. Why? Because the financial markets are constantly evolving, and trading knowledge can always be improved upon.

We’ve packed this guide full of fantastic insights and nuggets of valuable information to set you on the right course, so please take the time to read it in full.

We’ve tried to go into as much detail as possible but if there are topics we cover more extensively in our free or premium courses we’ll tell you where you can find out more.

Happy Trading!

Introduction

Created by industry professionals, the MYTS Forex Trading Guide has been put together with complete beginners and new traders in mind. If that is not you, then there will still be some useful information contained within its pages – so please read on or select a chapter you want to jump to. Throughout this guide, you’ll become familiar with Forex concepts such as:

  • Currency pair quotation with base and quote currency
  • Cross-rates, majors, minors, exotics
  • Exchange rates
  • Pips
  • Lots
  • Bid and ask prices
  • Spreads
  • Leverage
  • Margin and margin calls
  • Long vs. short positions
  • Risk/reward ratios
  • Stop-loss and take profit orders

Not only that, you’ll also learn how to develop your own trading strategy depending on your experience level, risk aversion, initial capital, trading profile, as well as investment goals.

The guide is split into three parts: Why do it, What is it and How to make money out of it. Lets go over what you’ll get from each. 

Part I – Why do it

In chapters 2 & 3, we’ll explain why Forex is popular and how to work out if it is something you might want to learn more about. If you’re not sure about whether or not online Forex trading is right for you, this section will help you decide.

You’ll learn why people do currency trading, and who should and shouldn’t trade this market. 

Part II – What is it

If you’re not familiar with what Forex is, then this section will answer all of your questions.

We’ll provide a short history of Forex trading and explain how it works, with simple examples.

You’ll learn about the most popular Forex currency pairs, and the best time of day to trade them. We’ll also explain how you can take advantage of margin and leverage trading and the different products used to trade Forex – CFDs, spot Forex, and spread bets.

Most importantly, we’ll explain how to deal with profit or loss in order for you to enhance your potential rewards, while controlling and reducing your potential risk. You’ll also learn about Forex regulations and trader protections.

Part III – How to make money out of it

If you’re wondering how to create a profitable and complete trading method as well as how to avoid costly mistakes often made by new Forex traders, this section is for you.

We’ll explain how to develop a winning Forex strategy to make money more consistently.

We delve into using chart patterns like head-and-shoulder, technical indicators like the RSI and Bollinger Bands. We also focus on important psychological price levels like support and resistance levels, as well as risk and money management tools like stop-loss and take-profit orders.

You’ll also learn about two of the most well-known ways to analyse the market: fundamental analysis and technical analysis, as well as how to use them in your trading.

Get started right now!

Explore this guide and learn the basics of Forex trading.

Then, create your trading strategy to decide when and how to buy or sell currency pairs – whether it’s the EUR/USD, the GBP/USD, or any other currency pair that fits your trading method – and don’t forget about risk and money management.

Start learning

Learn the skills needed to trade the markets on our Trading for Beginners course.

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