Step 1- Open a demo account with a trusted and regulated broker
Step 2- Have a trading plan and trading strategy
Step 3- Start trading on a demo account to test out your trading plan and strategies first
Step 4- Start live trading and create second source of income

FirstStep

Open a demo account with a trusted and regulated broker
Before you get started to trade live using real money, you should start with a demo account first. Only when your demo account is doing well, then you can consider trading live

SecondStep

Have a trading plan and trading strategy
A trading strategy is part of a trading plan. It consists of the following checklist:
1) The markets you want to trade.
2) The time frames you want to trade, e.g. 5 min, 15 min, 1hr or daily
3) Strategies you want to use for your trading. If you are new to trading, you can start with learning 3 things first:

a. Support& Resistance
b. Japanese Candlestick
c. Trend Analysis

4) The entry and exit rules of the strategies.
5) When to trade and when not to trade. Eg Interest rate announcement do you want to trade?
6) Money management

ThirdStep

Start trading on a demo account to test out your trading plan and strategies first
Make sure you are profitable on your demo account first before going live. And treat your demo account seriously just like a live account so that you can form good trading habits

FourthStep

Start live trading and create second source of income.
When you start to trade live, start small first. A lot of brokers give you trading bonus of $100-$200 when you fund a min of $1000 USD. Only when you become more and more profitable then you can consider increasing your funds and capital and create a second source of income for yourself. And also you need to make sure you check the government authority site to ensure that the brokers are regulated as what they claim to be.

If you ever travel to another country for holidays or work and you have exchanged your currency to their foreign currency, you would have participated in forex trading. Take for example, you are a Singaporean visiting Malaysia, you would have sold Singapore dollars and bought Malaysia Ringgit. The foreign exchange market is the largest financial market in the World.

8 MAJOR CURRENCIES IN THE WORLD

There are 8 major currencies in the World. They are US Dollar, Euro, Yen, Pound, Swiss Franc, Canadian Dollar, Australia Dollar and the New Zealand Dollar.
Currency pairs that contain the US Dollar(USD) on one side are called major currency pairs. They are:

EUR/USD, USD/JPY, GBP/USD, USD/CHF,USD/CAD, AUD/USD, NZD/USD.

Currency pairs that don’t contain the US dollar are known as crosses or minors. They are:

Euro Crosses- EUR/CHF, EUR/GBP, EUR/CAD, EUR/AUD, EUR/NZD
Yen  Crosses- EUR/JPY, GBP/JPY, CHF/JPY, CAD/JPY, AUD/JPY,NZD/JPY
Pound Crosses- GBP/CHF, GBP/AUD, GBP/CAD, GBP/NZD
Other Crosses- AUD/CHF, AUD/CAD, AUD/NZD, CAD/CHF, NZD/CHF, NZD/CAD

There are some people who like to trade the exotic pairs such as USD/ZAR (South Africa).

CURRENCY PAIRS

Currencies are always quoted in pairs such as GBP/USD or USD/JPY
In currencies trading; you are buying one currency and selling other at the same time. The left side is known as the base currency and the right side is known as the quote currency. Take for example, if GBP/USD= 1.22785, you need to pay 1.22785 USD for 1 British Pound.
So if you think that GBP/USD is going up you will buy (go long). If you think that GBP/USD is going down, you would go short.

GOOD TRADER & BROKER

It is important to find brokers with reasonable spreads and have a wide range of products so that you can keep your costs low and a wide range of products enables you to exploit market opportunities whenever it arises.

Bid is always lower than the ask price. The bid is the best price that you as the trader can sell to the market. The ask price is the best price that you as the trader can buy from the market. The difference between the bid and ask price is the spread.

In order to become a good trader, you need to be competent in your technical analysis, fundamental analysis, money management, risk management and trading psychology.

PIP

A pip is the last decimal place of a price quote. Most currency pairs have 4 decimal places except for Japanese yen that goes to two decimal places. Normal brokers usually offers currencies pairs with the standard 4 and 2 decimal places. Competitive brokers that offers good rates will have 5(most pairs) or 3 decimal places(Yen pairs)

Some brokers offer free demo account for you to practice first before trading live so that you can practice first before going live with real money. You should trade on demo first until you are profitable with your demo account before going live.

WHAT WE CAN HELP

In our website, we will also provide reading materials and practices to equip you with the knowledge about trading. As the saying goes, you can’t learn how to ride a bike by reading a book. It will be good practice for you to read and at the same time practice on a demo account so maximise your learning curve.

Forex is commonly traded in specific amount called lots. 1 lot will represent 100,000 units.
For Metatrader the smallest contract size is 0.01.

In the above example, if I enter a long position 1 lot of Gbp/Usd, I would have entered a contract size of 1.25087*100,000 units*1 lot = 125,087 USD.

If I entered 0.01 lot of Gbp/Usd, I would have entered a contract size of
1.25087*100,000 units *0.01 lot=1250.87 USD.

The change in a currency value relative to another is measured in pips. Let me give you a few more examples. It is important to know this so you are able to measure your risk and reward and put your stop loss positions accurately.

USD/JPY at an exchange rate of 107.559: (.01 / 107.559) x 100,000 = $9.29 per pip if someone buy 1 lot of USD/JPY
EUR/USD at an exchange rate of 1.08752: (.0001 / 1.08752) X 100,000 = $10.87 per pip if someone buy 1 lot of EUR/USD

It is important to take note that for JPY, the second decimal place is 1 pip while for other currency pairs such as the USD, the fourth decimal place is 1 pip. So take for the above example, EUR/USD at an exchange rate of 1.08752, when Euro/Usd moves from 1.08752 to 1.08762 it will be 1 pip. So if someone enters a contract size of 1 lot of Eur/Usd at 1.08752 and the price move from 1.08752 to 1.08952 this person would have made total of 20 pips which is equals to 200 USD. And if someone enters a contract size of 0.01 lot, the person would have made a profit if 2 USD.

Bid/Ask and Spread

In the above picture, Eur/Usd has a bid price of 1.0873 and and an ask price of 1.08752. This means that you can sell Euro/Usd for 1.0873 and you can buy Eur/Usd for 1.08752 and the difference 1.08752-1.0873= 0.00222 is known as the spread which in this example will be 2.2 pip. That means if you have bought Eur/Usd with a contract size of 0.01 lot at 1.08752 and sold it immediately at 1.0873, you would have lost 2.2 pips which is equals to $0.22 USD.

However, for other products such as crude oil, the contract size is priced in barrels.
1 lot of crude oil=1000 barrels. In the above example, if I enter a long position 1 lot of crude oil, I will be entering a position size of 18.23*1000 barrels*1 lot= $18230 USD. If I enter 0.01 lot of crude oil, I will be entering a position sizing of 18.23*1000 barrels*0.01 lot= $182.30 USD.

Market Execution

Market Execution means that you would like the market to execute the orders immediately at the current price.

Pending Order

There are 6 different types of pending order:

1. Buy Limit
2. Sell Limit
3. Buy Stop
4. Sell Stop
5. Buy Stop Limit
6. Sell Stop Limit

Buy Limit

A buy limit is a pending order placed below market price. Take for example, if Eur/Usd quotes 1.12141/1.12151 and you placed a buy limit at 1.12051. In this scenario, if Eur/Usd ask price reaches 1.12051, the buy order will be executed.

Sell Limit

A sell limit is a pending order placed below market price. Take for example, if Eur/Usd quotes 1.12141/1.12151 and you placed a sell limit at 1.12251. In this scenario, if Eur/Usd bid price reaches 1.12251, the sell order will be executed.

Buy Stop

A buy stop is a pending order placed above market price. Take for example, if Eur/Usd quotes 1.12141/1.12151 and you placed a buy stop at 1.12351. In this scenario, if Eur/Usd ask price reaches 1.12351, the buy order will be executed.
The rational for doing this is that some traders think that prices will continue to rise if it rises above a certain price.

Sell Stop

A buy stop is a pending order placed below market price. Take for example, if Eur/Usd quotes 1.12141/1.12151 and you placed a sell stop at 1.12041. In this scenario, if Eur/Usd bid price reaches 1.12041, the sell order will be executed.
The rational for doing this is that some traders think that prices will continue to fall if it falls below a certain price.

Buy Stop Limit

Buy stop limits triggers a buy limit order for you when prices hit a certain target. Take for example, if Eur/Usd quotes 1.12141/1.12151 and you place a buy stop limit at 1.12301 if offer price hit 1.12501.

Sell Stop Limit

Sell stop limits triggers a sell limit order for you when prices hit a certain target. Take for example, if Eur/Usd quotes 1.12141/1.12151 and you place a sell stop limit at 1.11901 if bid price hit 1.11801.

(How to read a candlestick and What a candlestick meant)

Takeaways:

• A bull market is a market that is on the rise and where the economy is sound; while a bear market exists in an economy that is receding, where most stocks are declining in value.
• Although some investors can be “bearish,” the majority of investors are typically “bullish.” The stock market, as a whole, has tended to post positive returns over long time horizons.
• Black = Red Candle
• White = Green Candle

1. Doji Candle Stick Pattern

• It represents equilibrium between supply and demand, a tug of war that neither the bulls nor bears are winning.
• The doji can be both a reversal pattern and a continuation pattern.

Example

2. Long-legged Doji

• It says that prices moved far higher on the day, but then profit taking kicked in. Typically, a very large upper shadow is left.

Example

3. Gravestone Doji

• Also known as Reverse Dragonfly.
• On that day, price rallied, but could not stand the altitude they achieved.

By the end of the day, they came back and closed at the same level.

Example

4. Dragonfly Doji

• It depicts a day on which prices opened high, sold off, and then returned to the opening price.
• Powerful reversal indicator and does point to large moves ahead.

Example

1. Tristar Doji

• It occurs during a downtrend; confirmation is required by the candles that follow the Pattern.
• The Second Doji is below the other Two Doji Candles.

Example

6. Abandoned Baby Pattern

• The gaps leave a clear distance between the shadow of the doji candle and both shadows of the first and third candle, leaving it abandoned.

Example

7. Evening Star Pattern

• This occurs during a sustained uptrend.
• On the first day we see a candle with a long white body. Everything looks normal and the bulls appear to have full control of the stock. On the second day, however, a star candle occurs. On the third day, a candle with a black real body emerges.

Example

8. Morning Star Pattern

• The stock must have been in a definite downtrend.
• The first day of the signal must be a long dark body. The second day must be a day of indecision. The third day should be a long white candle reaching at least halfway into the body of the first day’s dark candle.

Example

9. Spinning Top High Wave

• Spinning Top Wave / High Wave candle
• Candlestick that has an open and close price near each other which produces a small real body and color is of no importance. They also have long upper and lower shadows that significantly exceed the length of the body.

Example

10. Hammer

• Appears after a prolonged downtrend.
• On the day of the hammer candle, there is strong selling, often beginning at the opening bell. As the day goes on, however, the market recovers and closes near the unchanged mark, or in some cased even higher.

Example

11. Inverted Hammer

• Can only occur after a sustained downtrend; the stock is in all probability already oversold. Therefore, the inverted hammer signifies that traders who have held long positions in the security, most of whom are now showing large losses, often are quick to dump their shares by selling into strength.

Example

12. Hanging Man

• Always occurs after an extended uptrend.
• The hangman occurs because traders, seeing a sell-off in the shares, rush in to grab the stock a bargain price.

Example

13. Shooting Star

• This can appear only at a potential market top.
• The day the shooting star occurs, the market ideally should gap higher.

Example

14. Bullish Harami

• Candle can occur in either bullish or bearish trends, but the colors are reversed.
• A bullish Harami occurs when there is a large bearish red candle on Day 1 followed by a smaller bearish or bullish candle on Day 2. Again, the most important aspect of the bullish Harami is that prices gapped up on Day 2 and price was held up and unable to move lower back to the bearish close of Day 1.

Example

15. Three Black Crows

• Does not happen very frequently in stock trading, but when it does occur swing traders should be very alert to the crow’s caw.
• On the day the first black crow makes its appearance, the formation is most predictive if the first dark candlestick closes below the previous candle’s real body. Two more long-bodied consecutive down days then ensue.

Example

16. Dark Cloud Cover

• The stock closes at least halfway into the previous white capping candle. The larger the penetration of the previous candle, the more powerful the signal.

Example

17. Engulfing Pattern

• There is both a bearish and bullish engulfing pattern.
• The bearish engulfing candle happens at the end of an uptrend, and the bullish at the end of the downtrend.

Example

18. Piercing Pattern

• The day before the piercing candle appears, the daily candle should ideally have a fairly large dark real body, signifying a strong down day.
• In the classic piercing pattern, the next day’s candle gaps below the lower shadow, or previous day’s low.

Example

19. Candlestick Sandwich

• The candlestick sandwich is also a bullish reversal pattern over three days action.
• The pattern forms with two red candles surrounding one green candle in the middle, creating a sandwich.

Example

20. Three White Soldiers

• This pattern is most potent when it occurs after an extended decline and a period of subsequent consolidation. When a particular stock posts a decline followed by sideways movement, the appearance at that point of three white soldiers signals that higher prices are likely ahead.

Example

21. Marubozu

• Typically, it is a long candle that implies the day’s trading range has been large. This candle lacks either an upper or lower shadow. On rare occasions it can lack both an upper or lower shadow.
• White candle signals extreme conviction among buyers. Dark candle indicates sellers were eager to flee.

Example

There are still a lot of Patterns that you will learn along the way such as the following:
Tweezers
Dumpling Top
Fry Pan Bottom
Tower Top Pattern
Tower Bottom Pattern
Mat Hold Pattern
Above below the Stomach Pattern
Below The Stomach
Thrusting Line
Separating Line Pattern
Three Line Strike
Meeting line pattern
Low price gapping play
High price gapping play
Homing Pigeon pattern
8-10-12-13 New price lines
Scoop pattern
J-Hook pattern and Inverted J-Hook pattern
Cradle pattern
Rising three methods
Falling Three Methods
Deliberation pattern or Stalled pattern
Advance block pattern
Kicker

It’s not enough to just know how the tools work; we’ve got to learn how to use them.

REVERSAL PATTERNS

Reversal patterns indicate that an important reversal in the trend is taking place. To trade these chart patterns, simply place an order beyond the neckline and in the direction of the new trend. Then go for a target that’s almost the same as the height of the formation. In the interest of proper risk management, don’t forget to place your stops.

CONTINUATION CHART PATTERNS

Unlike reversal patterns which indicate a change in the trend, continuation patterns actually show that there is a temporary pause in the trend where prices consolidate after a big move. To trade these patterns, simply place an order above or below the formation then go for a target that’s at least the size of the chart pattern for wedges and rectangles.

BILATERAL CHART PATTERNS

This is a chart pattern that signals that the price can move either way. To play these chart patterns, you should consider both scenarios (upside or downside breakout) and place one order on top of the formation and another at the bottom of the formation.

Yes it is important to have more than 1 broker. Fortitude Funds recommends you have at least 3 brokers for the following reasons:

1. For Best Rates.Online brokers come in different forms, some are better than others and many offer different features and services. Different brokers can have different spreads and swaps(holding costs) for different products. Some brokers may price certain products cheaper than others. When you have more than 1 broker, you can compare and get the best rates for yourself.
2. Trading Bonus. A lot of brokers give trading bonus to new clients. This can help to increase your holding power or increase your leverage for more upside potential gain.
3. Free Tutorials/Webinars/Seminars. You can get different trainings with different brokers to enhance your knowledge and skills. Some brokers bundle free training and workshops when you open account with them.
4. Research Reports. Brokers normally like to keep in touch with their clients by providing them with research reports and market updates. Therefore when you have more than 1 broker, you get different research reports and analysis to have a broad range of views from different angles.
5. Hedge Operational Risk. Trading platforms can sometimes fail and online brokers sometimes can go down, it is a good idea to have another account where you can open or close your trades. For example, if you have a open position trade 1 lot of Eur/Usd with Broker A and Broker A goes down, you can easily hedge that trade with Broker B.