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Showing posts with label Forex University. Show all posts
Showing posts with label Forex University. Show all posts

May 14, 2021

Risk Management - Money Management (MM)

 No matter how great our strategy, forex trading still depends on "luck". Many people say that we cannot control "luck" in forex trading. In fact, we can increase our chances of achieving our "LUCK" to be higher. Do not believe? Let's read more.


This LUCK is like an opportunity. Let's say two people have to race 100 meters. One has to run and one pedals a bike. Which has a better chance of winning? Of course the person who rides the bike, the faster he arrives. So is forex, so control your "LUCK" by following the correct Money Management.


Proper money management requires proper risk and profit management. For example, after STOP LOSS, how much is lost, and how much is profit if our order has to TAKE PROFIT. The maximum control of lots that we can open is also Money Management (called MM) that we need to follow.


The habit that people learn in forex trading, put the right risk reward. For example, when trading, put the minimum risk reward is 1: 2. The TP example is 2 times that of the SL.


For example, if our SL is 20 pips, our TP will at least need 40 pips. If in 10 times trading. 5 times hit TP and 5 times hit SL, we are still in a profit of 100 pips.


TP 5 x 40pip = 200 pip

SL 5 x 20pip = 100 pips

Profit = 200 pips - 100 pips

Total: +100 pips

Risk Management - Emotional Control And Psychology

 Emotional control is the most important factor in forex trading. You will lose judgment in making the right or wrong decision to enter a BUY or SELL order if you suffer from emotional confusion.


⦁ Set the Heart According to the Guidelines


In forex trading, you must have guidelines i.e. rules that you set. Breaking the rules will make you confused to make the next judgment.


Examples of rules are as follows: -

⦁ Do not enter an order if the trend is already moving

⦁ wait for a really beautiful and high potential setup

⦁ do not enter orders against the trend

⦁ place a stop loss value and take profit according to the correct risk reward

⦁ Analyze first before entering the order

⦁ do not follow or be influenced by a friend’s trading order

⦁ put the correct lot value

⦁ set the correct lot value and do not add orders over the lot value

⦁ Do not trade forex when you have a lot of personal problems

⦁ do not change the set stop loss, it will cause you more losses if the market is not in your favor


If you break the rules as mentioned you may be frustrated, and do not know what to do to fix the order that is getting more and more losing and your capital is getting less and less.

Fundamentals of Fundamental Analysis - How to Read the Economic Calendar

 ⦁ Economic Calendar is important for you to look at every day before starting trading.


⦁ It displays a list of important economic events every day such as Bank Holiday, FOMC Meeting, Interest Rate decision, Non Farm Payroll and many more.


⦁ You can see economic news from Forex Factory


⦁ Click here: http://www.forexfactory.com/calendar.php


How to use it?


⦁ Adjust the time according to Malaysian time which is GMT +8

⦁ Go to (http://www.forexfactory.com/timezone.php) and make sure you can see as below.


Time Zone: +8.00

DST: Off

Time Format: am/pm

After that SAVE your SETTING and return to http://www.forexfactory.com/calendar.php


As long as you do not clear cookies or cache in your browser, as long as that will remain the local time set right. It is good for us to set the local time so that we can see the time the news is released at the local time which is GMT +8


Fundamentals of Fundamental Analysis - Interest Rate Issues

 Interest Rate is usually announced by the representative of the central bank for the country. It is announced at a meeting (meeting) by the Central Bank for each country.


Central Bank and Currency


FED (Federal Reserve) - USD

BOE (Bank of England) - GBP

BOJ (Bank of Japan) - JPY

ECB (European Central Bank) - EUR

RBA (Reserve Bank of Australia) - AUD


If the interest rate is raised, it will cause an attraction to investors because the country's bank gives high interest rates, causing many investors to want to invest in the country's currency. It is a positive effect on the value of the currency.


To start investing, investors need to convert money into the country's currency, and this will result in the country's currency being bought.


If the interest rate is lowered, it will cause many investors to turn to countries that provide better interest rates, thus causing a negative effect on the value of the country's currency.


Investors will run out, and at the same time sell the country's currency.

Fundamentals of Fundamental Analysis - Introduction

 Fundamental Analysis also known as FA (Fundamental Analysis) is one of the methods of analysis that uses economic news, geopolitics and currency policy of a country.


It is very different from Technical Analysis which only uses data from the price of a currency.

It is important to understand both Fundamental and Technical ways to make trading decisions, whether to BUY or SELL.


The FA uses economic data on what happens to a country’s economy, and studies what the impact is on the value of a currency.

There are many factors that impact the currency, namely monetary policy set by the government, capital and trade flows, domestic production, unemployment and many more.

April 6, 2021

Use of Basic Indicators - Moving Average (MA)

 Moving Average (MA) means the Moving Average for a certain period of time. The specific period depends on the Time Frame we choose on the MT4 Platform and also how many Periods we set.


If MA200 on the Daily Time Frame means Moving Average for 200 days. (1 candlestick represents one day, so period 200 means 200x1 day equals 200 days)


If MA50 is on Time Frame H1, it means Moving Average for 50 Hours. (1 candlestick represents one hour, so period 50 means 50x1 hour equals 50 hours)


If MA15 is on Time Frame M5, it means Moving Average for 75 minutes. (1 candlestick represents a period of 5 minutes, so period 15 means 15x5 minutes equals 75 minutes)


This Moving Average will form a curved line, and like the example above, it depends on the Time Frame selected. Usually, easy analysis using Simple Moving Average (SMA) or Exponential Moving Average (EMA).


⦁ How to enter MA into MT4


1. Click Insert on the Menu above

2. Select Indicators> Trend> Moving Average


⦁ Set your Moving Average 


⦁ Use MA as Support and Resistance


Commonly used MAs are SMA 21, SMA 50, SMA 100, SMA 200


 I used the following colors for each MA

SMA 50: Blue

SMA 100: Pink

SMA 200: Red


Suitable Time Frames to use are TF H1, H4, and Daily.

 I use the Daily Time Frame


When the SMA lines are at the top of the current price, they will be Resistance and when it is at the bottom of the current price, it will be Support.


You can see, when the current price needs many days, that is 4 Daily Candlesticks to break (breakout) the SMA 21 line, and the SMA 21 from being Resistance to Support.


Looks if Candlestick stands pretty above the SMA 21 line, a bit hard to penetrate down. So when the price goes up, SMA 50, SMA 100, and SMA 200 will be resistant.


How to trade:


You can use the concept of trade on Support and Resistance sketched by a predefined SMA. For example, you can enter a SELL order by scalping, take 10-30 pips when the price touches the main SMA, namely SMA 21, SMA 50, SMA 100, and SMA 200.


Continue studying the next chapter.

Use of Basic Indicators : Bollinger Bands

 Bollinger Bands, usually used as indicators that provide a way to trade using support and resistance.

Consists of Upper Band, Middle Band, and Lower Band.


Usually, the Upper Band will act as Resistance, while the Lower Band will act as Support.


When the Bollinger Bands contract, it indicates a market sideways and there may be the potential to change the trend.

When the Bollinger Bands expand, it indicates that the market is trending, that is, has a strong trend.


⦁ Seeing Trends Using Bollinger Bands


Uptrend: Candlestick will be above the Middle Band in the area marked in yellow.


Downtrend: Candlestick will be below Middle Band in the area marked in blue.


Continue studying the next chapter.

April 5, 2021

Fundamentals of Technical Analysis : Trade using SnR

Basically, you can try to understand about BUY on SUPPORT and SELL on RESISTANCE. But as for risk control, what if the price manages to break SUPPORT or RESISTANCE. This will make it invalid.

So the more accurate concept is BUY on RBS, SELL on SBR.


SELL at SBR and SET your Take Profit Level at the nearest Support. After that, you have to wait if the price is reflected SBR again and you have the opportunity to enter SELL again on SBR and take your profit on the nearest Support Line. Easy isn't it.


You are free to use any time frame to see the breakout but keep in mind, that Support and Resistance only work perfectly on large TFs such as H1, H4, and Daily.


Continue studying the next chapter.

Fundamentals of Technical Analysis : Support And Resistance

 In a simple sense to understand Support and Resistance is, "BUY at Support, SELL at Resistance".


⦁ Resistance is a Price Line that is very difficult for an ascending market to penetrate. Resistance is a price that is above the current price.


⦁ Support is a Price Line that is very difficult for a declining market to penetrate. Support is a price that is below the current price. For easier understanding, let's refer to the diagram below.



R - Resistance

S - Support


Look at the uptrend market when the price is going up, it is reflected on one price line and that is known as RESISTANCE.


Also look at the downtrend market, when the price is declining, it is reflected on one price line and that is known as SUPPORT.


But the prices at which the graph is reflected become as if a ladder to the ups and downs of the market. Resistance turns into Support (RBS) when the price of the graph rises past the Resistance Price Line. Support can also turn into Resistance when the graph price drops past the Support Price Line.



The Uptrend market is reflected on RBS before continuing to rise for a rebound on the next Resistance. In the Downtrend market, the graph is reflected on the Support line (S = "RBS"). This support line is formed as a result of the previous Uptrend market, namely Resistance Become Support (RBS). There are two RBS lines here. The downtrend market is also reflected in the Support Line which has turned into Resistance (SBR) before continuing to fall.


Reflected means Failed to Penetrate or failed to breakout.

The extent to which we can decide who Succeeded in Breaking or Failed to Break will be determined by the “Breakout” Factor.


Continue studying the next chapter.

Fundamentals of Technical Analysis : Market Trend

 The trend is better known as the direction of movement over a period of time depending on the analyst’s reference Timeframe, but usually, this trend is a reference to the directional movement over a long period of time, i.e. can refer to TimeFrame D1, W1, Monthly.


There are two types of trends, namely the ascending trend (bullish) and the descending trend (bearish).


There is another form of the market which is Sideway. Sideways occur when market prices go up and down in the same place. It usually happens before determining the direction to go up or down, this is because the buyer and seller are still confused and enter and exit the market at the same time and no big buyer or big seller is moving the market in the next direction. So at this point, the price forms a sideways pattern and the shape is as below.


Continue studying the next chapter.

Fundamentals of Technical Analysis : Time Frame

Time Frame is the time period or time period for each candlestick or bar chart used. A smaller time frame means the graph will show smaller movements. The larger the time frame, the larger the time period of movement of the graph shown.


From within the MetaTrader (MT4) platform, there are several types of Time Frames that can be used.


TIME FRAME

M1 = 1 Minute

M5 = 5 Minutes

M15 = 15 Minutes

M30 = 30 Minutes

H1 = 1 Hour

H4 = 4 Hours

D1 = Daily

W1 = Weekly

MN = Montly


If you select H1, it means one candlestick stick on the H1 graph, representing the movement of the graph over a 1 -hour period.

If you select M1, it means one candlestick stick on the graph of M1, representing the movement of the graph over a period of 1 Minute.


Usually, a larger time frame is used to see the general movement of the currency, which is known as 'Trend'. We will learn about ‘trends’ i.e. the direction of a general movement in the next chapter.


Continue studying the next chapter.

Fundamentals of Technical Analysis : Candlestick

 You are free to choose by clicking the chart options button that is on your MT4 Platform.

Each chart has its own specialties, but there is one chart that is most popular and widely used which is the Candlestick chart. If you look at a candlestick chart it looks like a candlestick that has a wick, which is why it is called a candlestick. Candlestick charts are originally from Japan and were designed in the 18th century by a rice trader.


What are the benefits of a candlestick chart?


A Candlestick chart is a complete chart that can show you the price movement over a specific period of time. It follows the ‘timeframe’ you choose. Each candlestick can show open price, higher price, lower price, and also close price. The candlestick consists of a part called a body and a shadow. 

  • Bullish Candlestick
  • Bearish Candlestick
  • Essential Candlestick shapes

 


Continue studying the next chapter.

Fundamentals of Technical Analysis : Chart type

 Charts displayed in MT4 and any of the most basic platforms usually have 3 types:-


⦁ Candlestick type Chart


⦁ Bar Chart type Chart


⦁ Line Chart type Chart


 


Continue studying the next chapter.

March 25, 2021

Pending Order

 There are several types of pending orders or better known as PO.

⦁ Buy Limit and Sell Limit

⦁ Buy Stop and Sell Stop


A limit order is an order in which we expect the graph to move to the desired price and turn back.

⦁ Buy Limit can only be placed below the current price.

⦁ Sell Limit can only be placed above the current price.


A stop order is an order in which we expect the graph to move to the desired price and continue its movement so that we profit.

⦁ Buy Stop can only be placed above the current price.

⦁ Sell Stop can only be placed below the current price.

 


How to place a PO?


How to Put a Buy Limit

Suppose you select a price of 1.2495 (red line) to place a Buy Limit order, and the current price is currently above 1.2524 (black line).

⦁ Click on New Order

⦁ Set Lot Volume Value

⦁ Type: Select Pending Order

⦁ Pending Order Type: Select Buy Limit

⦁ Set the desired price. The example above selects 1.2495 to place a Buy Limit.

⦁ Click the Place Button


This means when the price falls below 1.2524 (black line), and hits 1.2495, a BUY order will open. And we hope that the price starts to go back up like the green arrow shown in the example.


 


How to Place a Buy Stop

Suppose you select a price of 1.5947 (red line) to place a Buy Stop order, and the current price is below that of 1.5906 (black line).

⦁ Click on New Order

⦁ Set Lot Volume Value

⦁ Type: Select Pending Order

⦁ Pending Order Type: Select Buy Stop

⦁ Set the desired price. The example above selects 1.5947 to place a Buy Stop.

⦁ Click the Place Button

This means, when the price rises above 1.5906 (black line) and hits 1.5947, a BUY order will open. And we hope that the price continues to go up like the green arrow shown in the example.


How to Place a Sell Stop

Suppose you select a price of 1.2495 (red line) to place a Sell Stop order, and the current price is currently above 1.2526 (black line).


⦁ Click on New Order

⦁ Set Lot Volume Value

⦁ Type: Select Pending Order

⦁ Pending Order Type: Select Sell Stop

⦁ Set the desired price. The example above selects 1.2495 to place a Sell Stop.

⦁ Click the Place Button


This means when the price falls below 1.2526 (black line), and hits 1.2495, a SELL order will open. And we hope that the price continues to go down like the red arrow shown in the example.



How to Set a Sell Limit


Suppose you select a price of 1.5947 (red line) to place a Sell Limit order, and the current price is below 1.5905 (black line).

⦁ Click on New Order

⦁ Set Lot Volume Value

⦁ Type: Select Pending Order

⦁ Pending Order Type: Select Sell Limit

⦁ Set the desired price. The example above selects 1.5947 to place a Sell Limit.

⦁ Click the Place Button


This means, when the price rises above 1.5905 (black line), and hits 1.5947, a SELL order will open. And we hope that the price starts to go back down like the red arrow shown in the example.


Continue studying the next chapter.

Take Profit And Stop Loss

 Take Profit is also known as TP


  • TP is placed at the Price Level where we want to take advantage of our order.
  • TP for BUY orders is above the current price.
  • TP for SELL orders is below the current price.
  • When the price graph goes and hits the TP price, the order will close automatically.

Stop Loss is also known as SL


SL is placed at the Price Level where we want to minimize our losses when the graph moves against the direction with us.

  • SL for BUY order is below the current price.
  • SL for SELL orders is above the current price.
  • SL orders will also be closed automatically when the price graph hits the SL price.


How to Place TP and SL

  1. Identify at which price you want to place TP or SL and Double Click on one of the numbers under the TP or SL order column that is running. Either way, it doesn't matter. Double Click!
  2. Enter the desired price in the SL and TP fields.
  3. An example of the price has been shown in the picture.
  4. After confirming, you can click the blue button.


Attention:

The way shown is a fast way. You can also "right-click" on the current order in the trade column. Select the order you want to change and click Modify Order. From there you can set TP and SL as well.


After you have set the TP and SL. You will be able to see the Stop Loss and Take Profit lines as below.


Continue studying the next chapter.

How To Close An Order?

 After you open an order, you must want to close the order, either close in profit or loss.


  • Click on the Trade Button on the terminal section below
  • Double Click on the number in the profit section of the Order
  • When you are ready and get the price you want to close, CLICK the Yellow Box.

After the successfully closed order, you will be able to see the successful Closed Order box at the desired price. Your order list on the terminal below will disappear. You just need to click the OK button.


Continue studying the next chapter.

March 24, 2021

How to Buy And Sell?

 How to BUY?


1. Click the New Order Button

2. Set the Volume value according to the calculation we want

3. Click the BUY Button when you are sure everything is correct.


According to the diagram above, if we click BUY it means we have entered a BUY order at the price of 1.2725 on the EURUSD pair.


How to SELL?

1. Click the New Order Button

2. Set the Volume value according to the calculation we want

3. Click the SELL Button when you are sure everything is correct.


According to the diagram below, if we click SELL it means we have entered a SELL order at the price of 1.2723 on the EURUSD pair.


Continue studying the next chapter.

Basic Lot Volume Calculation In Forex

 Before I show you how to enter a BUY or SELL position, I need to remind you there are two things.


Profit is calculated based on how much Pip you earn.

The Pip Value is determined by you with the Lot Volume Value that you set when you want to enter an order either BUY or SELL.

Each time you enter a BUY or SELL order, your price value will be deducted by SPREAD

The SPREAD value is set by the Broker and it varies according to the PAIR

How to determine Lot Volume?


The Lot Volume value is as follows for the USD -backed pair. For example EUR/USD, GBP/USD, AUD/USD. Below are the standard values ​​for "Lot Volume" for most brokers.



The spread is the difference between the Bid and Ask prices. You can see the Bid and Ask prices on your Market Watch. Some brokers charge fixed spreads and some charge variable spreads. Spreads can also be considered as commissions charged by the broker to us.


For example, if the Spread for the EUR/USD pair is worth 2.5 pips. So let's say you enter BUY EUR/USD at the price of 1.30000, you will get the price of 1.30025, slightly above the price you entered earlier. The difference is called the spread.


If you enter SELL EUR/USD at the price of 1.30000, you will get the price of 1.29975, slightly below the price you entered earlier.


 


Continue studying the next chapter.

Get to know the Forex Market

 In this chapter, we will learn how we make a profit in the forex market. Please install the MT4 Demo Account to your PC/Laptop to understand the next chapter.


Buy, Buy, or Long

We can make money with forex trading when we ‘buy’ at a low price, and ‘close’ at a high price. For example, if you enter a Buy USD/CAD position means you. Convert your CAD to USD value. Close is to close the trading position.


Buy is also known as Long.


Buy is done when we expect the market to be bullish (upward)



As in the picture, you BUY the USD/CAD pair at the price of 1.28565 and CLOSE at 1.32333

1.32333-1.28565 = 0.03768 equivalent (376.8 Pip). This means you profit at 376.8 Pip.

Attention:

The pip calculation is calculated by subtracting the decimal point on the result minus the higher and lower values. For example, as above, the result minus 1.32333-1.28565 is equal to 0.03768. Remove the decimal point it will be 3768 points.


10 points equal 1 pip. To convert a point value to a pip, the point value needs to be divided by 10 to 376.8 only. So it will be referred to as 376.8 pips.


The Pip value can be determined by you before entering a trading POSITION either BUY or SELL. Let’s say in the early days, you put the price of 1 Pip equal to USD1.00. This means that as soon as you CLOSE the BUY position, you have gained USD376.80. You will be shown how to determine the pip value in the next chapter.


SELL or Short

We can also make money with forex trading when we Sell at a high price and Close at a low price. For example, if you enter a Sell GBP/JPY position, this means you exchange your GBP to get JPY. The concept is not the same as selling goods because these currencies are pairs, i.e. called Pairs. You can enter SELL first even if you do not have a BUY position.


Remember, to profit, you need to enter SELL when the price is high and CLOSE when the price is low.


As in the picture, you SELL the GBP/JPY pair at the price of 186.053 and you CLOSE at the price of 184.117. 186.053-184.117 = 1.936 equals 193.6 Pip. This means you profit at a rate of 193.6 Pip.


Attention:

The pip calculation is calculated by subtracting the decimal point on the result minus the higher and lower values. For example, as above, the result minus 186.053-184.117 is equal to 1.936. Just like the previous example, remove the decimal point on that number and divide by 10 making it only 193.6, so it will be referred to as 193.6 pips.


The Pip value can be determined by you before entering a trading POSITION either BUY or SELL. Let’s say in the early days, you put the price of 1 Pip equal to USD1.00. This means that as soon as you CLOSE the BUY position, you have gained USD196.30.


Continue studying the next chapter.

March 23, 2021

Forex Account Opening Guide

 You must be wondering, how to open an account with a forex brokerage company? Which company is strong and offers ease of dealing, the security of funds, and most importantly has a strict regulatory body to guarantee your rights as a forex trader.


No need to worry! Just follow our guide and broker of choice. The selection of a brokerage firm is made based on consideration of the suitability of your level of trading experience.


SUMMARY OF CHOICE BROKER


Instant Trading Ltd is a global forex broker and has a high reputation.


InstaForex started in 2007 and has various Operating Licenses according to the suitability of the customer. Instant Trading Ltd. is authorized and licensed by the Financial Services Commission (FSC) under the Securities and Investment Business Act (SIBA), the British Virgin Islands (BVI).

Among the interesting features why we introduce you to this broker, is that for us it is the easiest broker to deal with, has many great additional functions in addition to its robustness through our experience has long used it.


Has a low minimum deposit value as low as USD10, has a wide range of easy-to-understand account types and non -confusing standard lot values. There are no deposit or withdrawal problems throughout our experience using it.


Promotions and contests, including many bonuses offered by this broker, are well used by traders.


Instaforex currently has 7 Million active Traders worldwide. Winning various awards from around the world shows the strength of this broker.


For us, this broker is suitable for all levels. It is also the ideal forex broker in all respects to be your first broker.


 


DOCUMENTS YOU NEED TO PROVIDE


Did you know before you can deposit a forex account, to start trading, you need to have verified your identity.


Instaforex will ask you to confirm your email, mobile number by sending an SMS and identity verification. For identity verification, you only need to have a picture of the front of your IC.


Identity Confirm Document


It is a document to prove our identity. Here we can use the identity card as proof that we registered the account using the correct name.


You just need to snap a picture of the front of your IC using smartphones. Easy and fast! Make sure the image is clear.


 


GUIDE TO OPENING A REAL ACCOUNT


You can continue to open a real account, do not be afraid. Demo accounts and so on you can "Add On" later because Instaforex it uses the system "one login" for the management of all accounts.


Step 1:


Please click here - CLICK HERE


Step 2:


Fill in the form and proceed until the end of the step.


Step 3:


Don't forget to check your email to verify your account!


 


PLATFORM TRADING


The link to download the trading platform is sent to your email after you have registered a trading account as instructed above.


So you must first register an account by clicking the button above and fill in all the details for registration before starting.



CONCLUSION


Many traders start the steps in forex trading right, learn the right way, the right technique, try to be careful, and so on, but when CHOOSING THE RIGHT BROKER is not emphasized, many fall victim.


Many cases were reported to us, they were hit and deceived by unsound brokers. So much so that there are also those who cannot withdraw profit after struggling in this field.


This is our concern when many traders choose the wrong broker.


Therefore, we recommend that you register an account at our recommended broker, InstaForex Broker.


So just follow this guide we provide without any headaches later, and register using the link above for you to always be safe. We will be ready to help you!