Lesson 3: How to Invest in Trading
85% of traders lose their money. How is it possible? There is nothing more important than investing in yourself. To become a professional trader, you must face many needs and fears. A winning strategy is necessary, notions of “Risk Management” are equally necessary, and our emotions in this game are better to be put aside. Defeats will come, but the important thing is not how many times we will fall but how many times we will be able to recover. The symbol of “OverviewFX Ltd” is a phoenix, an animal that rises from its ashes. The analysis of the graph is essential to have an excellent income. Now, we will see the different ways of operating in the financial market.
• Technical Analysis: Technical analysis is the basis of our study in the following chapters. The market makes movements that are often repeated several times. There, we will take advantage of it. Technical analysis mainly comprises trend lines, supports, resistances, Supply and Demand levels and much more. It all sounds very complicated, but it’s not! Practice will make you invincible.
• Fundamental Analysis: Fundamental analysis is critical in the trading world. Fundamental analysis is made up of news from politics or world events that can, in one way or another, change market trends without any forecast.
Before opening a position, checking the economic calendar is essential. For the news calendar, I suggest you to use our ones: https://overviewforex.com/forex-calendars/economic-calendar/. Be careful with the news! There are two different ways of operating in online trading; let’s study them.
• Swing Trading: As the word implies, this trading technique is about riding the trend. You enter the position, and you wait until the moment when a change of direction can affect the general trend. Swing Trading is used in the medium to long term, so your positions can be held for 5 days up to 1 month. It is important to calculate the entry amount to avoid significant losses. Using a Stop Loss is necessary; I will explain its use later.
• Scalping and Day Trading: This is my favourite. The idea of holding positions for the long term makes me nervous, so I prefer to focus on the short time and take profits immediately. The “Scalper Trader”, unlike the “Swing Trader”, holds positions from 10 seconds to 1 day. We wait for the perfect moment, and then we act. Following a plan is essential; if there is no plan…you fail.
Now you must choose: do you consider yourself a Scalper Trader or a Swing Trader? In online trading, we can “bet” either on the rise or fall of a stock. When we bet on the rise, we will click the “Buy” button; when we open this position, it is defined as a long position. Conversely, when we bet on the fall, we will click the “Sell” button; in this case, it is defined as a short position. Make no mistakes; “Sell” does NOT mean closing the position. To close the position, you have to click on “close position”.
As you can see, there is a number between the Buy and the Sell buttons. That number is crucial as it indicates the “bet” you will open. In the next chapter, when we analyze PIPS, you will understand the correct number for you.
Figure 1 Short-Sell Position
Figure 2 Long-Buy Position
The Apps that I recommend for trading are:
MetaTrader4/ 5: they are intuitive websites and apps for opening and closing positions.
TradingView: It’s a website and app used for analyzing graphs very technically.
Trading Lessons:
Lesson 1: Quick Introduction
Lesson 1: Introduction "The secret to being successful from a trading perspective is to have an indefinite and tireless thirst for information and knowledge." Paul Tudor Jones Forex trading, the abbreviation for "Foreign Exchange Market", occurs when one...
Lesson 2: Trading Timetable
Lesson 2: Trading Timetable The Forex market is open 5 days a week 24 hours a day, but it is divided into 4 different sessions: • Sydney • Tokyo • London • New York Each session has a different opening and closing time. Attention: In summer and winter the...
Lesson 4: Fundamental Notions
Lesson 4: Fundamental Notions The market can make three movements: Bull Market: if the trend rises, the currency gains value. Bear Market: if the trend falls, the currency loses value. Horizontal Trend (Kangaroo Market): the price moves continuously,...
Lesson 5: Types of Charts
Lesson 5: Type of Graphs Every day, we see stock market charts on the TV news. They are often "line" charts, but there are many other ways to read them. The most used are "lines", "candles", and "bars" charts. Let's find them out!Guess what? The graph with which...
Lesson 6: Type of Candles
Lesson 6: Type of Candles Each candle has its own story and, of course, its meaning. Recognizing the type of candle is very important as it indicates the intentions of the market. It does not matter to know the names of each type, but it is good to understand...
Lesson 7: Support and Resistance
Lesson 7: Support and Resistance Supports and resistances are levels where the price has a great chance to bounce. We will notice how the price will bounce several times on the same level before continuing its rise or fall. Supports: Levels at which the price is...
Lesson 8: TrendIines and Patterns
Lesson 8: Trendlines and Patterns In trading, there are not only supports and resistances, but other patterns must be considered very important. Price often forms channels in which the trend bounces. You must recognize them to be prepared to enter the market....
Lesson 9: Market Movement
Trading Course Introduction The market goes through three different moments, which is good to know. In both bearish and bullish momentum, the market will go through 3 various movements:• Distribution• Re-Distribution• Accumulation•...
Lesson 10: Types of Trend
Lesson 10: Types of Trend Let’s start with the definition of “Momentum”. Momentum refers to the general trend of the graph. As we have already studied, the market can be in a Bearish, Bullish or Kangaroo phase. Now, we need to look at how the trend moves in...
Lesson 11: Supply and Demand
Lesson 11: Supply and Demand As I mentioned at the beginning, I am a Scalper, and consequently, I am satisfied with a small slice of the trend, from 10 to 20 PIPS. Don't think that with 20 Pips, you can earn less than with 100; trading is based on percentages....
Lesson 12: Fibonacci Retracement
Trading Course Introduction Many of you may have heard about Fibonacci Retracement but don't know how to use it. Let's start with a basic definition: Fibonacci Retracement is a key technical analysis tool that uses percentages and horizontal lines drawn on price...
Lesson 13: Indicators
Lesson 13: Indicators Forget the indicators; most are useless, and they only dirty the graph. Remember that we work with clean charts; we follow the trend. Many Forex Gurus will advise you to use indicators on indicators, but in these chapters, you will find...
Lesson 14: Market Manipulation
Lesson 14 Market Manipulation Many of you have already heard of the Fake Out; the Fake Out can be considered a market manipulation that serves to deceive traders. It happens after a long series of ascending or descending markets; the price breaks the support or...
Lesson 15: Plan and Risk Management
Lesson 15: Plan and Risk Management Many people approach the world of trading fascinated by simple money, but trading is a whole other world; as you can already understand, it is 90% patience and 10% the correct analysis. Anyone who believes in easy money will...
Lesson 16: Simple Trading Strategy
Lesson 16: Simple Trading Strategy I begin by saying that this strategy worked for me initially, and it’s not sure it will work for all of you. Each one will improve over time, and you will understand the best strategy suitable for yourself.As you can see, we...
Lesson 17: Psychology
Lesson 17: Psychology I’m the greatest. I said that even before I knew that I was -Muhammad Ali Reread this chapter whenever you fail and think you can't do it. I'm sorry to tell you that you will keep losing and burning accounts without the proper psychology,...
Lesson 18: Suggestions
Lesson 18: Suggestions Brokers: ICMARKETS: It is by far the best. Remember to open an ECN / RAW account if you are a Scalper. This will have a commission instead of the spread. As a scalper, I am also happy with 7 Pips. Certainly, I don't want to earn to give...