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Stage 1*
❇️INTRODUCTION
❇️WHAT IS FOREX
❇️WHAT IS TRADED ON FOREX
❇️WHO IS A FOREX BROOKER
❇️TRADING TIMES & TRADING SESSIONS
❇️TERMINOLOGIES USED IN FOREX.
❇️FORMS OF TRADING
❇️CURRENCY PAIRS.
❇️MT4 INTERFACE PART 1
1.0
INTRODUCTION AND WHAT IS FOREX*
Forex is just a Short form for *FOREIGN EXCHANGE. Forex is one of the largest markets in the
world with a Total Daily Liquidity of $5.3 Trillion dollars. It is larger than New York Stock
Exchange market and Crypto-market combined together.
1.1
WHAT IS TRADED ON FOREX
Someone would ask what is traded on the Forex Market. This is not the form of market where
buying of clothes or shoes takes place. This is not Idiomata or Oshodi or your normal markets in
any parts of the world you are. In forex market we trade the following:
SpotOIL, Futures, Gold, GoldE, Silver, OIL, Shares EU, Crypto, Commodities, Shares US, Shares
UK, Bonds
Energy, Crypto1, AUDCAD, AUDCHF, AUDJPY
Some are currency pairs of different countries, others are commodities, Oil, Precious metals, some
Cryptos, and Bonds etc. we would come to see them later.
1.2
WHO IS A FOREX BROOKER?
Forex Brookers are Firms that gives you access to the FOREX MARKET. They provide Traders
access to the Financial Market. They provide a trader with a trading account. They give traders
what we call leverage. They also provide support functions to the traders. There are various
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Brookers in the Forex Market. We have Hotforex, Fxtm, Fxcm,Fbs, LitesForex, Alphaforex, Atlas
Fx, Bluestone etc.
1.3
TRADING TIME AND TRADING SESSIONS
There are various trading times and trading session in Forex. They include;
Sydney Session
Tokyo Session
London Session
Frankfurt Session
New York Session
The session names are derived from the major cities in which most of the Transactions are done.
For example Sydney Session represents Australia and other countries around the Time Zone.
Tokyo Session, sometimes called Asian Session represents Japan and some of the Asian countries.
London Session represents the United Kingdom and the countries within it. Frankfurt Session
which is in Germany represents Europe while New York Session represents the Americas. Forex
is actually a 24hour market. It is most times regarded as the Market that never sleeps because it’s
open for 24hours of the day except on weekends. So there are 5 times in sessions. No matter where
you are around the World, no matter your Time Zone you can actually trade this large. Highly
Liquid market. Each Session have their own Opening and Closing times.
Sydney - Opens by 9pm GMT
Tokyo - Opens by 11pm GMT
London - Opens by 7am GMT
Frankfurt – Opens by 8am GMT
NewYork – Opens by 1pm GMT
Note that these TIMES are listed in GMT (Greenwich Meridian Time). All sessions last for
9hours. Having known their Opening, to get their appropriate Closing Times just add 9hrs to the
Opening Time to get when they would close.
Example Sydney Sessions that opens by 9pm GMT will close by 6am GMT.
NOTE
There is an important thing to Note. This is what many Forex Traders don’t actually
understand because nobody taught them. It is always good to Trade the Market when 2
markets are open at the same time. This is because, volatility is always more when 2 or more
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Sessions are opened. In Forex Market, more Volatility means more money. As a Forex
Trader, you wouldn’t want to trade a Quiet market because there won’t be much fluctuations
and it’s those movements that make money for us.
EXAMPLE
You can trade London and Frankfurt at the same time since their time is very close
EXAMPLE 1
12am GMT
Sydney Session and Tokyo Session would be opened together and it would have more volatility
than someone that is trading at 9pm GMT
EXAMPLE 2
8am GMT
London Session and Frankfurt Session would open, in fact even Tokyo would be with them briefly,
so you would notice that Volatility would increase during such times since their time are very close
So as a Forex Trader, always time your trading to fall in periods where 2 or more Markets are open
at the same time. By doing that you would always have an edge in the market. Some of you have
heard about Forex before though you may not have known how to trade the Market. Also some of
you have friends that Trade Forex. They would rather prefer to buy you exotic drinks in clubs, take
you and your spouses out but they will never teach you how to Trade Forex. I was once in that
situation
The only thing you would see how this Friend Pop Champagne in Clubs but will never teach you
or show how to make this money. I used to tell people that hoarding knowledge won’t make you
progress. You progress faster when you share this Knowledge and the beauty about Forex is that
one’s profit doesn’t hinder the next persons own
1.4
TERMINOLOGIES USED IN FOREX
Just like every Field you try to learn, you would have to get accustomed to its Terms and
Terminologies. So for every new field you embark upon in life, you would encounter New
Terminologies and terms which is peculiar to such fields. Be it Law, Medicine, Journalism,
Engineering etc. you would have to get yourself acquainted with their Terminologies so as to be
able to communicate properly. So also in Forex, for you to be able to Learn and Trade, you would
get to know some of the terms that is used in Forex Trading. So that you can understand the New,
Flow with your fellow Forex traders and understand Analysts. You may be among the gathering
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of Forex Traders but you won’t understand a dime of what they are saying. This is because you
don’t know the terms. So that is what we would be learning in this section
TERMINOLOGIES USED IN FOREX
TO GO LONG – buy
TO GO SHORT – sell
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If a trader tells you that he went Long on a Currency pair. He meant that, he Bought the
pair.
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While if they tell you that they Short a Currency pair, it means that they Sold the pair.
BULLISH MARKET
A market that is going Upwards
BEARISH MARKET
A market that is going Downwards
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When someone tells you that a currency pair or a commodity is Bullish its telling you that
its going Up.
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While one that is Bearish is going down.
BULLS
The Buyer are referred to as Bulls.
BEARS
The Sellers are referred to as Bears.
RANGING
A market is said to be Ranging, if it does not have any particular direction. Its neither moving
Upwards nor Downwards
TRENDING
A market that has a direction. Its ether moving Upwards or Downwards
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So you can hear people say a market is Trending Upwards or the Market is Trending Downwards.
You may hear people tell you that the Market is Just Ranging. They are indirectly telling you that
the market is not found any direction yet
HAWKISH
This term is mostly used when referring to the Central Bank Governor or personnel of a country.
When they are Hawkish, they tend to be liberal on interest rate and are willing to increase it. This
is good news for investors.
DOVISH
This is the opposite of Hawkish. Financial personnel who are Dovish are very restrictive. They do
not want to tamper with the interest rate. They even want to reduce it. This is bad news for
investors. Like what is happening to Great Britain right now
NFP
An acronym for Non Farm Payroll. A very important New Event in the US.
Also most of the Currency pairs have specific names in which they are called. We would get to
know them soon.
Example
1.5
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the dollar is sometimes called Greenback
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the Pounds is called cable
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the New Zealand dollar is called Kiwi
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the Australian dollars is the Aussie etc.
FORMS OF TRADING
There are basically Two (2) forms of Trading in Forex. They are sometimes referred to as
ANALYSIS.
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a. Fundamental Analysis
b. Technical Analysis
1.5.1 FUNDAMENTAL ANALYSIS
Fundamental Analysis is also known as News Trading. Here you are analyzing Forex market with
respect to the News. It’s been said that News is what moves the market. Everyday various news
are being released by these major countries and they either Positively or Negatively affect the
Currency pair involved and then you make your Trading decision based on New heard. We see all
these news on CNN, Bloomberg, CNBC etc. Also your MT4 App has a Summary of news section.
Some sites like forexfactory.com, dailyfx.com etc gives summary of this News.
Whether the News is Positive or Negative as a Forex Trader that is none of your business because
you make money both ways. Those into Crypto Trading would tell you that you only make money
when a Coin is appreciating but in Forex we make money both ways. If a currency pair is
appreciating, we go long on the pair. When a Currency is also depreciating based on News, we go
short on the pair. So in Forex, you make money on both sides of the News. (We will come to see
how to trade the News Later.
Today we would be discussing an important News Released by the United States even though
there are News released every day. This is what we Forex Traders call KING OF ALL NEWS. It
is called NFM (NON FARM PAYROLL). This is a news released by the United States of
America. Among all the news released by the US, this is the highest because it causes the most
Volatility in the market. By Volatility, we mean making the market fluctuate and move in a
particular direction most rapidly. Example, in Forex we calculate Profit in PIPS (we talk about
pips soon).
Those Traders I did today is averagely about 121 pips and I traded about 3 currencies to make that.
On a day of NFP, you don’t even need to Trade that much Currency pairs to make such profit. Just
one Currency pair could make a move of 100pips within 5 minutes. (We would all see this soon).
Non Farm Payroll is one of the Biggest News that every trader awaits on. It’s a News that contains
various data and statistics released by the US Bureau of Labor and Statistics. It’s very influential
as an indicator of US Economy because of the US Federal Reserve makes monetary policy
decisions with the News hence, Investors, Financial Analysts, Forex Traders, Stock Traders make
trading decisions with the News. It’s released every 1st Friday of the Month by 8:30am(EST)
that is 12;30pm(GMT).
1. Non Farm Payroll increase. The data include
 This is the number of new jobs added in the US Labor sector in the previous
month. These data includes employment in the manufacturing sector,
Construction sector, Goods sector etc.
 Excluding Farm workers (hence the name). Also excluding Private Household
employees and non- profit organizations. It is usually compared to the previous
data.
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Example
The one we traded on Friday, September 7th is the number of jobs added in August. It also includes
2. Unemployment rate of the US
3. Which sectors of the economy, these jobs were added mostly
 It gives investors and traders where are the possible sectors to invest in as the sector that
added more jobs would be most likely to have experienced growth
4. It also includes the Average hourly earnings of the workers in the US. This is also an Economic
indicator because even if the number of workers didn’t change but however their earnings
increased. It would have the same effect as if their number increased. Same also could be
interpreted in revision of previous non form payroll because investors compare these values
together whether there has been an improvement or reduction. This also gives you an idea of
the economy is growing or reducing.
1.5.1(a)
INTERPRETATION OF NFP
When more jobs are added, it means Business ventures are growing and remember that these newly
employed would be paid. Hence more people would have money to spend on goods and services
hence increasing the growth of the economy. However when the number of Jobs added are
reduced. The Reverse occurs. People won’t have money to spend on goods produced and service
hence dwindling the economy Also the US government has an amount of money paid to the
unemployed. When more Jobs are added, more people would be employed. This reduces the
unemployment rate, as the unemployed citizens reduce less money leaves the government pockets
hence boosting the economy.
This is just a Breakdown of what NFP entails and why it’s so volatile. It’s usually released 1 st
Friday of every month. So we would together Trade the Next NFP, because it’s seen than
explained. No Forex Trading fixes his Wedding or Party on the First Friday of any month except
it’s a Night event. So as Forex Traders, never miss it.
If you are driving and its 12:20PM (GMT) just park, open your phone Trade your NFP and
continue where you are going.
If you are sick (God forbid), just tell them to give you your phone that Friday, because you
can’t miss NFP. That how Big it is.
Most traders Trade once a month. They fund their accounts especially for NFP and close for the
month. Most people make what you would be in a year just on an NFP afternoon. That’s how
massive NFP News are. It causes large volatility in the market
1.5.2 TECHNICAL ANALYSIS
This form of Trading is when you analyze the market using Indicators, Charts, Patterns,
Candlesticks, Fiboacci, Support and Resistance, Pivot Points, Elliot waves etc. When you see
any of the above to analyze the market, it’s called Technical Analysis. Majority of what we listed
on the course outline are Technical Analysis
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How to know when to actually buy or sell
How to generate signals for your selves.
Indicators- Moving Averages, Stochastic, MACD, Bollinger bands, RSI, ADX, Parabolic
SAR, ATR, Ichimoku etc.
Time Frame Analysis
Support and Resistance level
Candle Sticks Analysis
Fibonnacci Levels
Pivot Points
Elliot Waves and Fractals
Chart Patterns
It’s the most popular Form of Trading
This is because High Volatile News in not released everyday so you can’t just depend on
Fundamental Analysis alone. Everyday can’t be Christmas. So as a Forex Trader, you must learn
how to trade the market using Technical Analysis. Because every day can’t be Christmas, High
Volatile News like NFP is not going to be released every day. So you have to learn to analyze the
market and Trade in the absences of any Major News released. That’s what makes you a complete
Forex Trader. Amon the 2 major forms of Analysis, no one is superior to each other and also no
one is used in isolation. You would learn as we move on, how to harmonize the two to constantly
keep you on top.
1.6
CURRENCY PAIRS
For this part to be more interactive we would all need to open our MT4 Apps. We are getting into
more serious Business right now. Let us open the app so that we can register it. We would all start
with DEMO ACCOUNTS.
Example 1
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If you look at the currencies listed above you would discover that they are listed in pairs. Among
those pairs of Currencies. The First Currency within the pair is called BASE CURRENCY while
the Second Currency within the pair is called QUOTE CURRENCY.
Example
EURUSD
The first pair (EUR) is called Base currency and the second pair (USD) is called the Quote
Currency. Euro is stronger than the US dollar. (I believe we all know that). Hence EURO is the
Base while USD is the Quote.
An important thing to note here is that the Base Currency is always stronger than the Quote
Currency (with few exceptions and we would see why soon).
Example 2
While in the second example (USDJPY) USD is the Base while Japanese Yen is the Quote because
the USD is stronger than Japanese Yen.
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Example 3
Also in USDJPY you are seeing 112.94, this number is telling you how many Units of the Quote
Currency you will need to get 1 Unit of the Base Currency.
Let us a Local scenario to give an example. If you have a Currency pair between USD and Naira
USD/NGN ….360
This is first telling you that USD is stronger than Naira hence USD is the Base and Naira the Quote.
The next important thing it is telling you how many Quote currencies do you need to get 1 Unit of
the Base Currency. So in this case you will need 360 Naira to be able to get 1 US dollar
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EXCEPTIONS WHERE THE QUOTE IS STRONGER THAN THE BASE CURRENCY
Picture 4
There are occasions in which the stronger ones are written as the second pair. Example include
*AUDUSD
US dollar is stronger than Australian dollars
*EURGBP
Pounds is stronger than Euro
*USDCHF
Swis Franc is stronger than USD
When you see these few exceptions don’t bother too much about why the weaker one is written
first even though it’s quite glaring that the Quote is Stronger. What you need to do is look at those
numbers beside it (Picture 4). All the numbers that starts with 0.yyyyy (ie Zero point something)
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are exceptions. In them the Quote is stronger. It doesn’t affect your Trading. It’s just for knowledge
sake.
However apart from those few exceptions generally in Forex the Base is always stronger than the
Quote.
Picture 5
We only do two things in Forex.. We BUY and we SELL these currency pairs.
The Big question is Now when Do you Buy and When do you Sell. This is where people always
get confused because those who taught them used the wrong semantics.
YOU BUY WHEN YOU KNOW THAT THE MARKET WOULD GO UP
WHILE
YOU SELL WHEN YOU KNOW THAT THE MARKET WOULD GO DOWN
If you notice, I carefully labeled WOULD. I didn’t say you buy when the market is going Up.
Assuming I said that, I would still be correct but you would get more confused. You would start
asking, who buys any item when it’s going Up.
As usual, I would use a Local scenario to explain this topic, by the time I’m done this seemingly
complex concept would look very easy to you. Believe me nothing is hard in Forex. Just tell
yourself that if young boys who are not even half educated as you can do this then you too can do
it.
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Let me use this Analogy to explain what I mean, For those of you who are not Nigerians I would
use 2 names in this brief Analogy.
Name 1: Buhari (He is the current president of Nigeria)
Name 2: Jonathan (former president)
Lets get to the Analogy so as to understand in a layman’s way of how Forex actually works. When
Jonathan was in Power, Dollar was at a time around 180 Naira to 220 Naira. Let’s just take the
average and say 200 Naira.
When Buhari entered power some of you would recall that around 2016, at some point the dollar
shut up to 500 Naira per one
Assuming you knew Dollar would appreciate against Naira like this and you had 2 Million Naira
lying fallow in the Bank account. You knew from your experience as a Forex trader that
uncertainty in Government weakens a currency pair and you used this your 2 million and bought
dollars and kept in 2015
It would give you about $10,000.
1 year later, Dollar just escalated to 500 Naira per dollar and you went to the Bank cashed $10,000
and exchanged it back to Naira.
It would now yield you 5 million Naira (remember you just stocked 2 million Naira) that means
you made 3 million Naira Profit.
Ask yourself did you use that 2 million Naira to do any Business? The answer is No. you practically
did nothing. What you just did right here was Forex. You leveraged on the fluctuations in the Price
of Dollar to Naira to make yourself Money without doing anything. You just sat at home while the
Foreign Exchange market did the job for you.
This is basically what we do in Forex. This is not the normal market Oshodi or Idumota, Kaneshie
market, Accra Mall etc. that you Buy and Sell clothes. For some that would as what you Buying
and Selling.
This is just a raw Analogy because in Forex market it’s even more interesting. You don’t have to
wait 1 year or months to make Money. These Currencies are constantly Fluctuating in minutes
(what I usually refer to as Volatility) so it’s those opportunities caused by these Fluctuations in the
Price of one Currency with respect to another that Forex traders make their money from because
they happen daily. That’s why Banks would never allow you to learn Forex. They prefer you come
to their Banks and fix the money for meager interest rates. To even shock you, investment Banks
contribute more than 70% of the total Liquidity in Forex. They use your money to Trade. Drive
big cars and Live in Big Houses and give you peanuts as interest or meager amounts as Salary.
In the above Analogy you would notice that you didn’t really Buy or Sell any real commodity to
make money. You took advantage of the exchange in Exchange rate to make money.
Why did you Buy USD/NGN?
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In the above scenario, you bought USDNGN because you knew beforehand that the value Would
rise. Take note Would.
We would also be touching our Next topic which is MT4 interface. Let me show you guys where
to see the Buy and Sell button.
Picture 6
Picture 7
Click on that icon labeled by the Red arrow on any page you are currently on. It would bring you
to Chart interface. While on the Chart interface click that icon pointed at the Purple arrow
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Picture 8
As you click on that icon, it would now bring you to this Page where you can Place your Buy and
Sell order on any Currency pair you want to trade on
In Summary
We have seen that we Buy when we know a Currency pair Would rise
And we Sell when we know a currency Would fall
The Big Question is, how do we know when it would rise and when it would fall. That is what
Technical Analysis would tell you
Candlesticks
Fibonacci
Elliot waves
Indicators
Pivot point etc.
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