Hello everyone in this video, you will learn how to trade Forex from Zero in 1 video. We will focus on the most important knowledge that can be applied immediately. I will not only explain the definitions, the theory, but also guide you to practice at the same time. The definitions that are too difficult or inapplicable will not be mentioned. For those who have experience in trading, you should watch this video as well, because you will know more tricks that you may not know before.
First, what is Forex? If we buy and sell vegetables, meat, fish in supermarket, shares in stock market, bitcoin, alt coin in crypto, in Forex, we buy and sell currencies. Instead of "buy and sell", we can use the word Trade. Forex is the largest financial market, bigger than stock and crypto market. It works 24/5, from Monday to Friday. Saturday and Sunday are off. Forex trading is like other business activities. We can profit from the difference in price. But in Forex, they are not physical products that you trade. What you trade are The currency pairs. There are some reasons that you should trade Forex: First, It does not require huge capital.
You'll need a significant capital If you run a cafe or restaurant business. But in Forex, you can start with small capital You don't even lose any money because there're Demo accounts. Second, Forex trading is entirely on the internet, no staff, no office… You don't have to work nine to five. However to be successful, you need great persistence and effort, like any other jobs. The sad truth is most of us come to Forex just because of the desire to make a lot of money easily. Or because you see other people making great profit that provoke your greed Some basic concepts in Forex Exchange is a place where you can buy and sell. if there are many people buying and selling in the supermarkets, as well as many types of products Forex is the same, but the products are currency pairs. However, there are good and bad exchanges. Good exchanges have a reputable license, good trading fees… Bad exchanges are created by bad organizations. They can be collapsed at any time Usually, the fee is also high, they don't have a certificate as well.
Choosing good exchanges is the first thing to start trading Forex. Each exchange will provide a trading platform. Trading platforms are software on a computer or a phone that we can use to trade. If exchanges are like shop brands, platforms are like shop space where there are products that we can trade. In Forex, there are many types of platform but I will guide you Meta Trader 4 which is used by lots of traders. Following the practical meaning, I will not explain much about the concepts You need to download and learn how to use MT4 first. In the process of learning how to use MT4, I will integrate the definitions so that you can remember more easily.
First of all, you need to have an account on a good exchange. The steps to create an account are quite simple. They are different between exchanges so I don't guide you how to create a trading account to save time. If you don't know about it, feel free to contact me. Now we will go to the next step. After downloading Meta Trader, please install and open it. Once you open the platform, it will look like this.
Choose your server, then click next. Your server is from your account information sent to your email after you create a MT4 account. Just by clicking here, drop down to this plus sign and enter the name of the server. Please note that the Mt4 account is different from the exchange account. 1 person has 1 exchange account for deposit and withdrawal. You can create many MT4 account with 1 exchange account. After choosing the server, I will choose here. Fill my account information. Fill my account information. Then click Finish button. Then it will display an interface like this. At first, you may feel the interface is pretty confusing. Note that if you are newbies, you don't know how to use it, you should create a DEMO trading account first. Avoid using real money or you will lose it.
Now, I will guide you how to edit the chart to make it easier to see. I only guide the functions that we often use. You don't need to know about the rest or you can find out later. First we will edit this chart. We will close some charts here. Click here to enlarge it. Then you can edit the interface by the following steps: Let's right-click it and click Properties. Go to Common tab, untick Show grid to turn off the grid. Here you can choose candlestick. You can tick Chart shift, then go to Colors tab. You can tick Chart shift, then go to Colors tab. You can set green at Bar up field, red at Bar down field. Set Bull candle to green, bear candle to red to make the chart look easier.
Then click OK. You can move those bars up here. We will go to the market watch section. It displays the product information that we can trade. We have a lot of products such as currency pairs, gold, silver, index, crypto… In the financial market we often trade by pairs. For example here we have EURUSD, USDJPY… Which currencies are usually traded in Forex? They are Dollar, Euro, British pound, Swiss Franc, Canadian dollar, Australian dollar, New Zealand Dollar. Here it shows all the pairs that are made from those currencies. You can delete the pair that you don't want to use by Right click then choose Hide or press Delete button on the keyboard.
This section are the exchange rate of the currency pairs. For example here we have the rate of EURUSD. This rate means that 1 euro is equal to 1.20209 dollar. Or if you sell 1 euro you will get 1.20209 dollar. We can see here, most currency pairs are represented by 5 digits after the . sign. However, Japanese Yen is worth much less than the others so Japanese Yen pairs are represented by 3 digits after the . sign. Another concept is PIP. A pip is the smallest price move that an exchange rate can make. For currency pairs with 5 decimal places like USDCHF, GBPUSD, EURUSD PIP will be the number at 4th place to the right of the decimal point.
Here for EURUSD, pip is 0 at the 4th place. We will count from the decimal point: 1,2,3,4. It is 0. For Yen pairs like USDJPY, pip is the number at second place. To remember easily, pip is the second number from the right for most of pairs. For this EURUSD pair, the column on the left of the pip column is equal tens of pip.
and the column on the right of the pip column is equal 0.1 pip. We can call 0.1pip a Point. For example, if the rate of this EURUSD pair increases from 1.20200 to 1.20300, it means that it increases 10 pip. To show a product, Rick click, then Click Symbol. These are all types of product we can trade. Let's say I want to open Gold. I go to Metals, then choose XAUUSD. Then double click. We're done when it shows the yellow box. Then click Close, we immediately have the gold exchange rate here. For Gold, pip is also the second number from the right or the first number to the right of the decimal point.
Here why do we have two price column, Bid price and Ask price? For example in USDCHF, these two prices are different. Now right click on the chart, then select Properties. Then tick Show Ask line. It will show the Ask price which is the red line. The Bid price is the grey line. Bid price is the price when you sell. Ask price is the price when you buy. Or if you buy, you'll buy at the red line. If you sell, you'll sell at the grey line. This difference in Forex is called Spread. You can see Spread of a pair by right-clicking at the pair, choose Spread. This is the Spread column. For example in USDCHF, the spread is 4, which is the difference between Bid price and ask price. This number 4 means that the difference is 4 point. So the bigger the spread is, the more disadvantage you will be. So when choosing a trading exchange or a trading pair, you should choose whichever has as small spread as possible. Or these two lines are close together. Next, in order to hide this curved red line, right click, choose Indicator list, choose Moving average and delete it.
Then to save this chart into a template that is later used, click here Click save and name it. You can change it to any name you want, then click Save. To open a chart of a pair, hold the left mouse button on the pair and drag on to the chart. It will automatically display the chart of the pair you want. The second way is right click at the pair you want, then choose Chart window. it will display a completely different style from the previous chart, which is the default interface. To apply the template we saved before, go to Template, choose Load template Choose the template that we saved then click Open. To watch multiple charts at the same time, you can click this button. It will show all the charts that you opened down here. Here is all the tools that you can use to draw on the chart. Here is the timeframes. Next we will learn how to open an order in this platform. To open an order, click the New order up here. A window will show up. Symbol is the product we want to trade. Here is the volume.
The volume is indicated by Lot. It should be simply understood that 1 Lot is equal to 100 thousand units I will explain Stoploss and take profit later. You can note whatever you want on Comment field. All types of orders are around buying and selling orders. Type field is types of orders. If you choose Market Execution, there are Sell by market and Buy by market. It means that you can sell or buy immediately at the current price. Let's say if you think that the price will go up, you buy by market and the order will be executed immediately. After opening orders, we can see the loss or the profit of oders.
Just go to Trade tab, you will see them here. However, when you close orders, it will be your final loss or profit. You can close orders by the following ways: You can click on this close mark or you can right click at this line and click Close. Besides, when you open an order, there are another type of order called Pending order. You can click here.
A Pending order is Buy or Sell order placed but which is yet to be executed. It is executed when the market price reaches a certain level. Pending orders fall into two categories, limit orders and stop orders.
Moreover, you can right click and choose One click trading. It will show and hide this box. This box is for quick orders. If I want to open a sell order, I'll click here. The sell order is then immediately executed. You also can set an alert to notify when the price reaches a certain level. For example, if I want to set a notification here, I will right-click, go to Trading, then click alert. It will show an alert when the price reaches here. You can edit this alert by double-clicking the alert. It will show all parameters. Or you can see all the alerts at the Alert tab. So we've gone through some important concepts in Forex and how to use MT4. Now we will learn things related to how to choose the best entries. The most important element of a product is the price. The price is from activities of buyers and sellers. We can call Buy side and Sell side. In The Bull Bear Law, I often call The Bulls and The Bears.
They derive from the way in which each animal attacks its opponents. A bull will thrust its horns up into the air, while a bear will swipe down. These actions were then related to the movement of a market. When the bulls are stronger than the bears, the price will go up. In contrast, the price will go down. The market's activities is non-stop, the struggle between the bulls and the bears never ends.
The price will be shown on the chart. The horizontal axis shows time and the vertical axis shows price. The price will move creating the price line like this. We also call this a Line chart which has only price line. We can watch this chart style by clicking this button. Also, we need to know a popular type of chart which is called Candlestick chart. Click here to show candlestick chart. We call each small rectangle a candlestick. Each candlestick will indicate the price movement in a certain period of time. Like 1 minute, 5 minutes, 15 minutes, an hour… In a 1-minute chart, it will include 1-minute candlesticks. If we go to 15 minute chart, it will include 15-minute candlesticks an so on. Now I will explain how a candlestick form and the structure of a candlestick. For example we have the price line like this. I will take a price mark at 12:15 And another price point is at 12:30. So how does a 15-minute candlestick form from 1-minute chart within 15 minutes? How does it look like? This is the price at the beginning of the 15 minute period.
This is the price at the end of the period. We call these two prices Opening price and closing price. From the opening price and closing price, it forms the candlestick body. During the period of the price movement, from 12:15 to 12:30, there is the lowest price. This lowest price connect with the body forming the lower wick. On the contrary, in this period, the highest point connect with the body forming the upper wick. Here the highest price is equal to the opening price. In this case, there is no upper wick. In case the price move upper than the opening price, it will create the upper wick.
Now we will open the 15 minute chart to see if it could create the candlestick like this. Let's zoom in. Here is the candlestick. It looks like our candlestick before. That's how a candlestick is formed from the market price. Our goal is to understand the trading behaviors, market psychology… to know how the price can move further. We also don't need to remember all types of candlestick patterns mechanically. We just need to know Candlestick reading. For example, we have the candlestick like this. So how can we read this candlestick? First, we know that the opening price is this price. the closing price is this price. During the price movement within the candlestick, it created the lowest price here. So the price can move like this. No matter how it goes, we all know there's moment that the price dropped from the opening price to the lowest price.
And it can raise from the lowest price to the closing price. So the up power is weaker than the down power. From this candle we can see that the bears are stronger than the bulls. Or for a long bullish candlestick like this, We know that the price just go up from the opening price to the closing price. The wicks are very short so the price went up constantly and rarely went down. Because of that, we know the bulls are much stronger than the bears. Next, we'll talk about The Bull Bear Law. This law will help you read the essence of the market structure. This law is about the struggle between the buyers and the sellers. However, buyers and sellers are difficult to illustrate. Or the concepts of trends, levels, too. That's why I used this Bull Bear icons to always remind me about this struggle between these 2 sides.
The bulls represent buyers and the bears represent sellers. When the bulls are stronger than the bears, the price will go up. In contrast, the price will go down. We're going to go through the example on the real chart for more understanding. Here the bears push the price down, then the bulls push the price up immediately. Then the bears push it down again. Please note this area. This the area is where the bears have won the bulls, This is a top. We can call it The bear base. From this base, there's strong bearish force so that the price can go down. When the price return to that base, the bears are ready. There's more likely that the price will be pushed down. When the bears push the price down and break through the bull base here which we call the bottom, it will form a downtrend structure. Here we can see that this bottom is in the previous bull base, So when the price drops to this base, the bulls continue to push the price up.
When the price is pushed up to the bear base, the bears join in and push the price down. Doing the same thing, we can read the market structure easily. The price drops to this base, the bulls push up to this bear base, the bear continue to push down… The bulls reinforce this bull base until the bears break through the bull base. In this area, we need to notice 2 things: First, this top need a strong bearish force to create a bear base. Second, in this base, it also needs a strong bearish force to win the bulls and break through the base. This bull base now become the bear base. We call the bears steal the base from the bulls. That's why when the price return to that base,the bears continue to participate in and protect the bear base. Similarly, we can see here. The bears push the price down like this. This base is where the bears push the price down then the price's immediately pushed up. Because at this base it needs a strong bullish force to break when the price drops to this base, the bulls push the price up again.
Similarly, we can read the structure. For example, this is the chart at the current, the further chart is not displayed like before. You can see the bulls are strong and they break the previous bear base or the base now become the bull base. There's another bull base, here, from which the bulls carry out their attack. From that we can choose where we focus more to be able to place an order. These 2 bases are the bull base or the origin of the bull attack, So there're more likely that the price will be pushed up when returning to these bases. I'm going to use the rectangle tool to draw these 2 bases so that you can see them easily. This base also includes all of the bottoms. The second is this base. Now let the price move. Notice that the price did not return to these bull bases, meaning that the bullish force are so strong. Then here we can see a wave breaking through this bear base.
So we continue to draw this bull base, from which the bulls started attacking. The second is this base which the bulls steal from the bears. But when we read the market structure, the bears are really weak at this base. So to break through this base, it doesn't require a strong bullish force. Besides, these 2 bases are pretty close together. So we can draw only 1 rectangle for both of these bases. You can see here we still see the price reacted at the upper base then went up.
But after that, the price returned to that base. It reacted a little, then being broken through by the bears. The bears pushed through the upper base, down to the lower base. Here is the bull base. The bull push the price up, but the bear also push the price down. They are fighting each other with the same powers so that it creates a consolidation or a sideway here. Finally, the bull won and broke through the consolidation by a bullish candlestick. Here we know that the bears have already weakened because there is a bull base here. The bulls continued to protect their base, did not let the bears win. Then counter attack to break through the bear base in the consolidation. Here if the bears won, the bears would all take part in to protect their base, then break through the bull base. But the bull still hold this base, then counter attack. That is the signal showing the bears weaken.
So here we could place a buy order. We put Stoploss below the bull base. It means that we will get out of the market if the bears break through the bull base. We will take profit at the area where the bears attacked before or the bear base. Because if we place TP higher than the bull base, the price may go to the bull base and be pushed down. That's why I place TP order here. Please notice that there's no way that we can predict how the price move exactly and no one can do that. We only know that the probability is high or not. We see a lot of factors supporting that the price continues to go up, so the wining probability will be higher.
Now we will let the price run Ok, this is a wining order. Those are basic concepts so that you can have a good understanding on how to read candlestick and market structure. You can watch other videos to have more perspectives on reading candlestick. Finally you need to know about Money management which is the most important element. It is more important than choosing a good entry. In any field, when you decide to use your money, It is very important to determine what your biggest risk is as well as the opportunity you can get. That is Money management. In general fields, money management means that you need to know the losing probability per your decision. If you decide to open a coffee shop or a restaurant, how much money may you lose? In trading, you need to pay attention to the amount of losing money per order. you need to determine your risk first before your reward.
Most of us usually care about the profit You even sell your house, borrow money everywhere to hope that you can get that profit. Greed doesn't tell you about the worse case that could happen until it happens and it will be too late. Newbies often place orders but stoploss orders. when the market goes against their order, they keep their losses and hope that the price will come back. They will close the orders immediately if their accounts are positive just a little. They can make profit by that way many times, But just by once the market goes again their orders and do not come back, it will burn their account. If we don't use Stoploss order, the biggest risk is losing all our money in our accounts. Before you want to make a profit, determine what your worst risk is first. How much money you are willing to risk per order. It doesn't matter how much your account is If you are willing to risk 100$ per order, an order with a $100 account without a SL is no different from an order with a $1000 account with SL being $100 The worst risk is $100 in both cases.
We call the amount you're willing to risk 1 R or 1 risk. The R:R ratio is the Risk:Reward ratio. For example, here I place a sell order. I place SL here. We can use middle mouse and drag to see how much the stoploss is in point. You'll see the middle number is 92 point or 9.2 pip. If the R:R ratio is 1:2, meaning that I'm willing to lose 1 in exchange of wining 2. So we need to place TP order are twice the SL order. SL order is about 9 pip, so TP is about 18 pip. If the price drops to this zone, it means I will win 2R. Or I win twice the amount I am willing to lose. That's about capital management. In trading process, you may make many mistakes in trading psychology You really want to make money, you place orders carelessly, you do not calculate you volume, you won't notice about how much you can lose… In order to overcome all of those things, you need to practice a lot through the process of self-training You practice based on the real market or you can use the backtesting software that I leave in the description.
Ok that's all the knowledge I summarized within 1 video for you to start Forex trading. If you have any questions, please leave a comment below and don't forget to subscribe to the Channel. Goodbye and see you in the next videos..