CONTEXT

FOREX TRADING
 Introduction
CURRENCIES
 Most traded
 Base and Quote Currencies
FOREX BROKERS
 Definition
 Most used
 Leverage and spreads
 Lots
TRADING ANALYSIS’
 Sentimental Analysis
 Fundamental Analysis
 Technical Analysis
RISK MANEGEMENT
 Risk to Reward
PSYCHOLOGY
 Mental
 FOREX TRADING
What is FOREX?
The Foreign Exchange market, also referred to a "Forex" or
"Retail forex" is the largest financial market in the world, with a
volume of about $2 trillion a day. If you compare that to the $25
billion a day volume that the New York Stock Exchange
trades, you can easily see how enormous the Foreign Exchange
really is. It actually equates to more than three times the total
amount of the stocks and futures markets combined!
In other words, Forex Trading is the buying at low prices and
selling at high prices of different currencies of different countries.
 CURRENCIES
What is traded on the Foreign Exchange?
Currencies are traded through a broker or dealer, and are
traded in pairs; for example the Euro dollar and the USD dollar
(EUR/USD) or the British pound and the Japanese Yen
(GBP/JPY).

Because you're not buying anything physical, this kind of trading

can be confusing. Think of buying a currency as buying a share
in a particular country. When you buy, say, Japanese Yen, you
are in effect buying a share in the Japanese economy, as the
price of the currency is a direct reflection of what the market
thinks about the current and future health of the Japanese econ-
omy.

In general, the exchange rate of a currency versus other curren-

cies is a reflection of the condition of that country's economy,
compared to the other countries' economies.

Most Traded Pairs include;

 EUR/USD (Euro/US dollar)
 USD/JPY (US dollar/Japanese yen)
 GBP/USD (British pound/US dollar)
 AUD/USD (Australian dollar/US dollar)
 USD/CHF (US dollar/Swiss franc)
 USD/CAD (US dollar/Canadian dollar)
BASE AND QUOTE CURRENCY
What is a Base and Quote Currency?
A Base currency refers to the first currency in a currency pair
and is typically considered the "domestic" currency. For ex-
ample, in the USD/JPY currency pair, the US dollar is the base
currency, and the euro is the Quote currency.
You would buy the pair if you believe the base currency will ap-
preciate (go up) relative to the quote currency. You would sell the
pair if you think the base currency will depreciate (go down) rela-
tive to the quote currency.

USD (Base) /JPY (Quote)

Fundamentally when the base currency is Weak,

that pair will SELL. And the same as when the Quote
Currency is Weak preferably that pair will BUY
Vice versa.
 FOREX BROKERS
Who/What is a Forex Broker?
A Forex Broker refers to a financial services company that provides
traders access to a platform for buying and selling foreign curren-
cies in other words they are regarded as the Middleman in Forex.
Famously used forex brokers in Uganda;
 Exness
 HotForex
 FBS
 TemplaFX etc.
Brokers provide a couple of tools and assistive terms to enable a
forex trader rich their Goal in Trading, such as Leverage, Spreads,
Lot Size….

LEVERAGE AND SPREADS

Leverage In Forex trading, a small margin deposit can control
a much larger total contract value. Leverage gives the trader the
ability to make nice profits, and at the same time keep risk capital
to a minimum. For example, Forex brokers offer 200 to 1 leverage,
which means that a $50 dollar margin deposit would enable a trad-
er to buy or sell $10,000 worth of currencies. Similarly, with $500
dollars, one could trade with $100,000 dollars and so on. But lever-
age is a double-edged sword. Without proper risk management,
this high degree of leverage can lead to large losses as well as
gains.
Spreads In one of the most common definitions, the spread is the gap
between the bid and the ask prices of a security or asset, like a stock,
bond, or commodity.
 The Bid Pc is the price in which the dealer is willing to
buy the base currency in exchange for the quote currency.
This means the bid is the price at which you (as the trader)
will sell.
 The Ask Pc is the price at which the dealer will sell the
base currency in exchange for the quote currency. This
means the ask is the price at which you will buy.

LOTS / LOT SIZES

A LOT is a measure to efficiently communicate standardized
quantities/units of currency transactions, it's far easier to say “1
LOT” than saying “One hundred thousand U.S Dollars” For Exam-
ple;
Standard LOT (also referred as 1 lot) - 100,000 units of
any given currency.
Mini LOT (also referred as 0.1 lot) - 10,000 units of any
given currency.
Micro LOT (also referred as 0.01 lot) - 1,000 units of
any given currency.
Simplified Format per 10 pips movement of any currency;
 1 Lot - 100 $ per 10 pips
 0.1 Lot - 10$ per 10 pips
 0.001 Lot - 1$ per 10 pips
 TRADING ANALYSIS’
Trade analysis is one of the most important tools used by suc-
cessful investors to pick stocks, commodities, indices and make
intelligent investment decisions using an online trading app. It
enables an investor to prepare for the share market in advance
and Buy or Sell stocks which can prove profitable in the near fu-
ture.
There are a three main trading analytics in Forex;
1. Sentimental Analysis
2. Fundamental Analysis
3. Technical Analysis

SENTIMENTAL ANALYSIS
Sentiment is a measure of how traders and investors view the
outlook of the market and larger economy.
Forex traders generally analyze the overall sentiment by looking at the
positions of all traders in a market, and how their positions change
on a daily or weekly basis, to get a better 'feel' of where currency
prices might be heading in the future.

IMG.1
From IMG.1 USDJPY portrays to have 74% of traders Shorting it
( SELLING IT ) and 26% of traders Longing it ( BUYING IT ). Choosing
whether to sell or buy this pair according to the provided report is what is
called Sentiment. ( https://www.fxblue.com/connect/#sentiment )

FUNDAMENTAL ANALYSIS
Fundamental analysis refers to the critical analysis of economical, social,
and political forces / News updates that may affect currency pair prices
both short and long term .(My Forex Factory)

From the IMG above the colored folders stand for;

 Yellow Folder - Low Impact Expected
 Orange Folder - Medium Impact Expected
 Red Folder - High Impact Expected
How does one trade the news?
From the IMG above, Traders mostly trade the Red Folder
News. The USD news update came out positive meaning USD
as a pair has gained strength.
All currency pairs having USD as a base currency USD / XXX
( any currency ) will be Bullish ( BUYING ). And the opposite is al-
so true all currency pairs having USD as a quote currency ( any
currency )XXX / USD will be Bearish ( SELLING ).

TECHNICAL ANALYSIS
Technical analysis is a trading discipline employed to evaluate in-
vestments and identify trading opportunities in price trends and
patterns seen on charts. Technical analysts believe past trading
activity and price changes of a stock can be valuable indicators of
the stock's future price movements.
Under Technical Analysis we have a variety of different trading
techniques;
 Candlestick Patterns Technique
 Support And Resistance Technique
 Demand And Supply Technique etc.

CANDLE STICK PATTERNS

What Is a candlestick?
A candlestick refers to the opening, close, highs and lows in
the market.
Candlesticks are important to your trading analysis because, it is
considered as a visual representation of what is going on in the
market.
The anatomy of candlesticks
The candlesticks are technical tools used in analyzing the financial mar-
kets and they represent price action or price movements in the markets.
Candlesticks show the availability of buyers and sellers in the market at
specific period of time.
A candlestick shows us a price bar with an opening price, a closing price,
a high price for that time period and a low price for the same time peri-
od.

A typical candlestick is made up of three parts:

The upper shadow/wicks- which represents the highest price that the
market has reached for that period of time.

The lower shadow/wicks- which represents the lowest price that the
market has reached for that period of time

The body- which represents the range between the opening price and
closing price for a given period of time. The body is in most cases col-
ored red or green which represents sellers and buyers respectively.
(note the color is just customized).
If the close is above the open, we can say that the candlestick is bullish
which means that the market is rising in this period of time. Bullish
candlesticks are always displayed as green candlestick.
If the close is below the open, we can say that the candlestick is bear-
ish which indicates that the market is falling in this period of time.
Bearish candles are always displayed as red candlesticks. But this is not
a rule as we already noted that the color can be changed.

The candlestick patterns

In this article you will learn the power candlesticks in the finan-
cial market:
 Hammer candlestick.
 Pin bar candlestick.
 Bullish engulfing candlestick.
 Bearish engulfing candlestick.
 Doji candlestick.
 Dragofly doji.
 Gravestone doji.
 Morning star candlestick.
 Evening star candlestick.
THE HAMMER CANDLESTICK
The hammer candlestick is a candlestick with along wick or shadow below and
a small body above with a small or no wick on the top.

This indicates a bullish rejection from buyers and their intention to push the
market higher. It should be noted that color of a candle doesn't matter but the
wicks and body of the candles communicate good price action.

The hammer is a reversal candlestick pattern when it occurs at the bottom of a

downtrend.
Illustration of a hammer candlestick:

This candle forms when sellers push the market lower after the open, but they
get rejected by buyers so the market closes higher than the lowest price.
Therefore the hammer candlestick represents buyers coming in the market and
it should be noted that if it’s a GREEN hammer handle it shows buyers taking
over and if it’s a RED hammer candle it shows buyers coming in but sellers still
available.
 As you can see the market was trending down, the formation of the ham-
mer candlestick was a significant reversal pattern.
 The long shadow represents the high buying pressure from this point.
 Sellers was trying to push the market lower, but in that level the buying
power was more powerful than the selling pressure which results in a
trend reversal.
 The most important to understand is the psychology behind the formation
of this pattern, if you can understand how and why it was created, you will
be able to predict the market direction with high accuracy.

The pin bar candlestick

 The pin bar candlestick is a candlestick with along wick or shadow above
and a small body below with a small or no wick on the bottom.
 This indicates a bearish rejection from sellers and their intention to push
the market lower. It should be noted that color of a candle doesn't matter
but the wicks and body of the candles communicate good price action.
 The pin bar is a reversal candlestick pattern when it occurs at the top of an
uptrend.
Illustration of a pin bar candlestick
 This candle forms when buyers push the market higher after the open, but
they get rejected by sellers so the market closes lower than the highest
price.
 Therefore the pin bar candlestick represents sellers coming in the market
and it should be noted that if it’s a RED pin bar candle it shows sellers tak-
ing over and if it’s a GREEN pin bar candle it shows sellers coming in but
buyers still available.
 As you can see the market was trending up, the formation of the pin bar
candlestick was a significant reversal pattern.
 The long shadow represents the high selling pressure from this point.
 Buyers was trying to push the market up, but in that level the selling power
was more powerful than the buying pressure which results in a trend rever-
sal.
 The most important to understand is the psychology behind the formation
of this pattern, if you can understand how and why it was created, you will
be able to predict the market direction with high accuracy.

The bullish engulfing

 The bullish engulfing candlestick consists of two candlesticks, the first one
is the small body, and the second is big body which completely covers the
small one hence the name Engulfing.
 The first candle is a bearish candle which is completely engulfed by a green
candle.
See illustration below:
 The bullish engulfing bar pattern tells us that the market is no longer under
control of sellers, and buyers will take control of the market.
 When a bullish engulfing candle forms in the context of an uptrend, it indi-
cates a continuation signal.
 When a bullish engulfing candle forms at the end of a downtrend, the re-
versal is much more powerful as it represents a capitulation bottom.

The bearish engulfing candlestick

 The bearish engulfing candlestick consists of two candlesticks, the first one
is the small body, and the second is big body which completely covers the
small one hence the name Engulfing.
 The first candle is a bullish candle which is completely engulfed by a bear-
ish candle.

See illustration below:

 The bearish engulfing bar pattern tells us that the market is no longer un-
der control of buyers, and sellers will take control of the market.
 When a bearish engulfing candle forms in the context of an downtrend, it
indicates a continuation signal.
 When a bearish engulfing candle forms at the end of an uptrend, the rever-
sal is much more powerful as it represents sellers taking over control of the
market.
The doji candlestick

Doji is one of the most important candlestick patterns, when this candlestick
forms, it tells us that the market opens and closes at the same price which
means that there is equality and indecision between buyers and sellers, there is
no one in control of the market. See the example below:
DOJI

As you can see the opening price is the same as the closing price, this signal
means that the market didn’t decide which direction will take.
This candlestick pattern shows indecision in the market i.e. neither sellers or
buyers in control of the market at that specific period of time.
The doji candle stick is categorized into two: Dragon fly doji.
The gravestone doji.
The dragon fly doji
The Dragonfly Doji is a bullish candlestick pattern which is formed when the
open high and close are the same or about the same price.
What characterizes the dragonfly Doji is the long lower tail that shows the re-
sistance of buyers and their attempt to push the market up.
The gravestone doji
The gravestone Doji is a bearish candlestick pattern which is formed when the
open high and close are the same or about the same price.
What characterizes the gravestone Doji is the long upper tail that shows the re-
sistance of sellers and their attempt to push the market down.

The illustration above shows us a perfect gravestone Doji. The long upper tail
suggests that the forces of supply and demand are nearing a balance and that
the direction of the trend may be nearing a major turning point.

Morning star candlestick pattern

 The morning star pattern is considered as a bullish reversal pattern, it often
occurs at the bottom of a downtrend and it consists of three candlesticks:
 The first candlestick is bearish which indicates that sellers are still in charge
of the market.
 The second candle is a small one which represents that sellers are in con-
trol, but they don’t push the market much lower and this candle can be
bullish or bearish.
 The third candle is a bullish candlestick that gapped up on the open and
closed above the midpoint of the body of the first day, this candlestick
holds a significant trend reversal signal.
 The morning star pattern shows us how buyers took control of the market
from sellers, when this pattern occurs at the bottom of downtrend near a
support level, it is interpreted as a powerful trend reversal signal.

Illustration of a morning star candlestick;

Evening star candlestick pattern

 The evening star pattern is considered as a bearish reversal pattern that

usually occurs at the top of an uptrend.
 The pattern consists of three candlesticks:
 The first candle is a bullish candle
 The second candle is a small candlestick, it can be bullish or bearish or it
can be a Doji or any other candlestick.
The first part of an evening star is a bullish candle; this means that bulls are still
pushing the market higher.
Right now, everything is going all right. The formation of the smaller body
shows that buyers are still in control but they are not as powerful as they were.
The third bearish candle indicates that the buyer’s domination is over, and a
possible bearish trend reversal is likely to happen.
In conclusion,
 As you can see the market was trending up, the first candle in the pattern
indicates a long move up.
 The second one is a short candle indicating price consolidation and indeci-
sion.
 In other words, the trend that created the first long bullish candlestick is
losing momentum. The final candlestick gaping lower than the previous
candlestick indicating a confirmation of the reversal and the beginning of a
new trend down.

KEY FACTORS
 Candlesticks are one of the most important tools used in technical analysis
as they help us identify key trading opportunities through pure price ac-
tion.
 It should be noted that candlestick pattern are not traded in isolation i.e.
they should be accompanied by other confluence before executing a trade.
 Candlestick patterns are mostly used for entries in the lower time frames.
 For example all the candlesticks we have seen that indicate buyers coming
in the market should be traded at support and all that indicate sellers in
the market should be traded at resistance.
 If a candlestick that represents buyers shows at resistance then we expect
a break of that zone as the market is telling us that buyers are still available
even though we at resistance, the same way at support.
 In the forex market we trade what we see not what we think that’s why pa-
tience is one of the greatest assets needed in the market .

SUPPORT AND RESISTANCE

Support refers to a level in the market where currencies/stocks will cease to fall
in price. During a downtrend, currencies/ commodities will continue to de-
crease in price. Eventually these commodities will hit a floor beyond which the
price seems reluctant to fall. Making that a support level.

Resistance refers to a level in the market where commodities will cease to rise
in price. In Uptrend currencies will continue to increase in price. Until they hit
the ceiling above which the price seems reluctant to increase hence resistance
level.
 Support and resistance can also be termed as reaction or rejection areas in
the financial markets, Its is one of the most used tools when analyzing the
financial markets .
 At any one time a trader has only 3 options:
 Buy (buy/ long)
 Sell (sell/ short)
 Stand (waiting )
 it should be noted that support and resistance is a strategy used in analyz-
ing the markets so as to identify buy or sell opportunities in the market.
 Support and resistance is going to help traders identify prices where to buy
from or sell from.

HOW DOES ONE TRADE SUPPORT AND RESISTANCE

 Basically support and resistance happens when the big market players in
the market e.g. financial institutions, hedge funds etc. pick a certain price
and buy from it multiple times.
 As its already noted above in technical analysis that the markets are repeti-
tive we as traders we use this opportunity to predict what might happen in
the future just by identifying those prices that market movers buy and sell
from multiple times.
 We believe that ounce the market movers buy or sell from a certain price
there are high chances that they will come back to that price and buy and
sell again.
 Support and resistance can be identified in all trends in the market i.e. up-
trend, downtrend and ranging market.
Illustrations of Support And Resistance in trending markets.
Downtrend Uptrend

From the picture above we can see that market was respecting trend line multi-
ple times hence giving us touches which show that we can buy and sell at support
and resistance respectively.
In an uptrend we can be buying at support and in a downtrend we can be selling
at resistance
We trade Support and Resistance in 2 ways;
 Multiple touches.
 Breakouts .
Multiple Touches
 We consider bounces to be the touches at support and resistance i.e. every
time market comes at support and buys that’s a bounce and when it reaches
resistance and sells that’s a bounce.
 So bounces give us touches and as we have already noted the more the
touches the stronger the support and resistance.
 As traders we always draw our support and resistance and wait for market to
reach those areas and execute our trades.
 The way to know that market is going to bounce off my support and re-
sistance is through candlestick confirmations on.
Breakouts and Retests
 We consider breakouts as violation of support and resistance, as we know
that the market moves in waves/trends, there are a lot of factors affecting
the market movements like fundamentals, so there's always possibility of
market breaking support and resistance
 Whenever market breaks support or resistance it implies and signals the
availability and volume of buy and sell orders that are coming in the market
at that specific period of time.
 Whenever support is broken we expect it to become resistance conversely
when resistance is broken we expect it to become support.
 For a trader to consider a valid break of support and resistance the candle-
sticks must close below support or above resistance not just wicks as wicks
are considered stop hunts.
Every time market breaks support or resistance before taking a trade we wait
for a retest on that broken support or resistance and then we execute our
trades following the direction of the break.
Note:
Retest means that market has to come back and touch the broken zone for a
trader to execute a buy or sell order following the direction of the break.

Understanding fake outs

 As we have noted above that support and resistance can be broken at any-
time it should be noted that sometimes the breakouts can be fake and
market wont move in that direction but instead it will just come back and
follow the previous trend before the break .
 Fake outs are the sole reasons why we always wait for a retest to confirm
that market has really broken and its changing direction.
 Fake outs are called stop raids.
 KEY TAKEAWAYS
I. For support and resistance to be considered valid it has to have 3 touches
and above but it should also be noted that when touches exceed 6 the
zone starts to become weak.
II. So its always safe to trade on the 3rd 4th and 5th touch.
III. For every breakout we wait for a retest.
IV. After creating a channel a trader is supposed to check if its clear or unclear
and we have seen for clear channel its easy to be traded and less risky but
for unclear channel its high risk.
V. For every trade we always need candlestick patterns for confirmation on
lower time frames or structures still on lower timeframes be it in bounces
or breakouts.
VI. Support and resistance zones are drawn on big time frames depending on
the type of trader you are.
 DEMAND AND SUPPLY
 Most traders depend on technical indicators to identify imbalances in the
financial markets. The technical indicators provide insight into market mo-
mentum and help determine prices. Likewise, other traders closely watch
key levels in price action where most actions tend to occur, leading to
sharp price movements.
 Supply and Demand zones are crucial price levels created by banks and
other large institutions from where big trends emerge.
 Supply and demand zones refer to areas in a price chart where the price
regularly approaches and they can be termed as magnets in the market be-
cause they create imbalances in the market. They are areas of intense
battles between buyers and sellers .
 Supply and demand helps us identify volume in the market.
SUPPLY ZONE
Supply refers to massive selling in the forex markets.
Supply, also called the distribution zone, is an area in a price chart where trad-
ers look to sell the market. The zone mainly occurs when the price has moved
down significantly by market movers, it presents the highest selling interest or
potential and can also be called a strong resistance area.
Supply areas are created when price reaches high prices and the big market
players put in big sell orders with volume and create and imbalance in the mar-
ket.
 The picture above shows a supply zone created by massive selling in the
market, so as traders we identify that area and wait for price to come back
to it and sell with the big boys.
 Depending on the number and size of sell orders placed in the supply zone,
the price will always get rejected and move lower every time it bounces to
this level. Prices will only rise above the supply zone where buyers over-
power sellers and place more buy orders.
DEMAND ZONE
 Demand refers to massive buying in the forex markets.
 Demand can also be called the distribution zone, is an area in a price chart
where traders look to buy the market. The zone mainly occurs when the
price has moved up significantly by market movers, it presents the highest
buying interest or potential and can also be called a strong support area.
 Demand areas are created when price reaches low prices and the big mar-
ket players put in big buy orders with volume which creates imbalance in
the market.

 The picture above shows a demand zone created by massive buying in the
market, so as traders we identify that area and wait for price to come back
to it and buy with the big boys.
 Depending on the number and size of buy orders placed in the demand
zone, the price will always get rejected and move higher every time it
bounces to this level. Prices will only rise below the demand zone when
sellers overpower buyers.
The best way to find a supply and demand zone
The best way to find a supply and demand zone is to use longer timeframes to
identify areas where strong consolidation occurs. Four-hours, daily, and weekly
charts provide a clear view of potential supply and demand areas. While in the
longer timeframes, it is essential to use rectangular shapes to denote this zone
that should act as support and resistance levels as seen in the pictures above.

In addition, always be on the look for strong moves out of potential supply and
demand zones. Any sharp move signifies strong momentum in the new direc-
tion, affirming the initial buildup in momentum from large institutions placing
orders. Price will always move sharply from the supply and demand zone until
the value has diminished or the large institutions achieve their objective.

How to Trade Supply and Demand Zones in Forex?

While an influx of sell orders characterizes the supply zone as sellers look to sell
high, traders can look to enter sell positions in anticipation of the price edging
lower afterward. Therefore, while placing a sell order below the supply zone, it
is essential to place a stop-loss order a few pips above the zone. The stop-loss
order will close the sell order should the price fail to edge lower after consoli-
dation from the supply zone as seen in the pictures above

Likewise, one can look to enter buy orders near the demand zone, given that an
influx of buy orders characterizes the area. The prospect of the price edging
higher from the demand zone is usually high. Stop loss orders should be placed
a few pips below the demand zone. This will close down any buy positions once
the price fails to move up above the demand zone and starts moving lower as
we have seen in the pictures above.
 KEY TAKEAWAYS
 To trade on a demand zone it has to be fresh meaning no touch on it.
 Always place your stop loss below or above the zone when selling or buying
respectively.
 The zone has to have massive buying and massive selling to be considered
demand and supply.
NOTE;
SUPPLY AND DEMAND CAN BE COMBINED WITH SUPPORT AND RESISTANCE
AS THIS WILL HELP YOU CAPITALISE ON BIG MOVES IN THE MARKET.

RISK MANAGEMENT IN TRADING

 Effective forex risk management allows currency traders to minimize losses
that occur as a result of exchange rate fluctuations. Consequently, having a
proper forex risk management plan in place can make for safer, more con-
trolled and less stressful currency trading.
 Forex risk management comprises individual actions that allow traders to
protect against the downside of a trade. More risk means higher chance of
sizeable returns – but also a greater chance of significant losses. Therefore,
being able to manage the levels of risk to minimize loss, while maximizing
gains, is a key skill for any trader to have.
How does a trader do this?
 Risk management can include establishing the correct position size, setting
stop losses, and controlling emotions when entering and exiting positions.
Implemented well, these measures can prove to be the difference between
profitable trading and losing it
 In risk management a trader is supposed to 1st focus on risk before actually
thinking about what they are willing to make because the market is a busi-
ness of probabilities.
 After understanding what your willing to risk it will help you determine
what to make.
 TOP FUNDAMENTALS OF FOREX RISK MANAGEMENT
Pips for Risk
 Pips is the smallest movement in price of a currency and it should be noted
that as traders everyday we looking for pips from the market.
 Working out your appetite for risk is central to proper forex risk manage-
ment. Traders should ask: How much am I willing to lose in a single trade?
 If you don’t know how much you are comfortable with losing, your position
size may end up too high, resulting in losses that may affect your ability to
take on the next trade – or worse.
 Before taking a trade you are supposed to know the number of pips you
are willing to risk.
 So how much should you risk? A good rule of thumb is to only risk between
1 and 3% of your account balance per trade.

Position Size
Selecting the right position size , or the number of lots you take on a trade, is
important as the right size will both protect your account and maximize oppor-
tunities. To select your position size, you need to work out your stop place-
ment, determine your risk percentage and evaluate your pip cost and lot size.

Stop Losses
Using stop loss orders – which are placed to close a trade when a specific price
is reached – is another key concept to understand for effective risk manage-
ment in forex trading. Knowing the point in advance at which you want to exit a
position means you can prevent potentially significant losses. But where is this
point? Broadly, it’s whatever point your initial trading idea is invalidated.
 TRADE MANAGEMENT
Trade management is one of the ways someone can easily manage there risk in
the market and we focus on three key principles,
 Breakeven
 Trailing stop loss
 Partial profits

BREAKEVEN
This is when you enter a trade and it goes in profits for example 20pips and u
shift your stop loss to entry price so that even if market comes back against you
no loss made.
Illustration of a trade with BE