Forex 101: From FX Beginner to Serious Trader in Five Easy Steps Sean Hyman, Editor Currency Cross Trader World Currency Watch 98 S.E. 6th Avenue, Suite 2 Delray Beach, FL 33483 USA USA Toll Free Tel: (888) 358-8125 Contact: http://worldcurrencywatch.com/contact-us Website: www.worldcurrencywatch.com Copyright 2011 by World Currency Watch. All international and domestic rights reserved. No part of this publication may be reproduced in any form, printed or electronic, without prior written permission from the publisher, World Currency Watch.
World Currency Watch 98 SE 6th Avenue, Suite 2 Delray Beach, FL 33483 USA USA Toll Free Tel: (888) 358-8125 Email: http://worldcurrencywatch.com/contact-us Website: www.worldcurrencywatch.com Legal Notice: This work is based on what we ve learned as financial journalists. It may contain errors and you should not base investment decisions solely on what you read here. It s your money and your responsibility. Nothing herein should be considered personalized investment advice. Although our employees may answer general customer service questions, they are not licensed to address your particular investment situation. Our track record is based on hypothetical results and may not reflect the same results as actual trades. Likewise, past performance is no guarantee of future returns. Certain investments such as futures, options, and currency trading carry large potential rewards but also large potential risk. Don t trade in these markets with money you can t afford to lose. Sovereign Offshore Services LLC expressly forbids its writers from having a financial interest in their own securities or commodities recommendations to readers. Such recommendations may be traded, however, by other editors, Sovereign Offshore Services LLC, its affiliated entities, employees, and agents, but only after waiting 24 hours after an internet broadcast or 72 hours after a publication only circulated through the mail. Also, please note that due to our commercial relationship with EverBank, we may receive compensation if you choose to invest in any of their offerings. (c) 2012 Sovereign Offshore Services LLC. All Rights Reserved. Protected by copyright laws of the United States and international treaties. This Report may only be used pursuant to the subscription agreement. Any reproduction, copying, or redistribution, (electronic or otherwise) in whole or in part, is strictly prohibited without the express written permission of Sovereign Offshore Services, LLC. 98 SE 6th Ave, Suite 2, Delray Beach FL 33483. F10.CUC.NA.05.07.12
If you had asked me 10 years ago, How do you start trading currencies? I wouldn t have been able to tell you. At the time, I had been in the financial industry seven years, and I was still working on mastering regular stocks, bonds and mutual funds. So I was loose as a goose when it came to trading currencies. So I know what it s like to be a beginner. If you find yourself in the same situation, I can definitely relate! The good news is I ve spent the better part of the last decade studying every facet of the currency markets. This means, I ve made the crossover from awkward beginner to master trader. Today, I want to put you on the fast track so you too can crossover from being a FX beginner to a serious trader. I would start by implementing these five easy steps below Step 1: Pick the Right FX Firm (Here s How ) If you know this then you ll already be light-years ahead of most beginners. First, to trade in the foreign currency market, you need a special FX account with a FX firm. Now it s embarrassingly easy to set one up. But you must know: All FX firms are NOT created equal. Some are regulated some are not. Some have tons of cash reserves, some don t. When choosing your firm, you want a forex dealer that s both regulated and well capitalized. In my opinion, regulators tend to look out for your better interests. They are also the ones that make sure firms have sufficient operating capital. So you want to go with a firm that s well regulated because it will help you in the long run. An easy way to do that is to pick a firm from a regulated country like the U.S., U.K., Canada, Australia or Hong Kong. Here are ways to find these types of firms First, you can sift through all the brokers on the Commodity Futures Trading Commission s (CFTC) site. You can also Google the word forex and check out some of the top picks as well. That s actually much easier. Remember, you re looking for large firms with lots of cash that come from one of those five regulated countries. Okay, next step: You ve chosen your firm. Now you can choose the type of account that you want: micro, mini or standard $100,000 account. This is important: It will impact how large your trades are, and how much leverage you use in each trade. I recommend new traders start with either a micro or mini-account. These are smaller, more manageable accounts. It means you re risking less per trade. I d suggest having at least $500 for every micro-lot you wish to trade OR $5,000 for every mini-lot you wish to trade. So you can let this be a guideline as to which type of account you may want and how much capital you may wish to start with. These are not the minimum requirements, but they are prudent starting balances for these types of accounts. Once you determine the type of account you wish to open, you can click the apply online button on their site. You will fill out a few online pages and within a few days they ll email you the funding instructions. Step 2: Fund Your Trading Your Account There are three common ways to fund your account. The way that you fund could depend upon your starting balance. 3
If you re planning to deposit $10,000 or less, the quickest way to fund your account is through a debit or credit card. You can process this through the deposits section of your broker s site. This will typically get the funds into your account within one to three business days. If you are putting in amounts larger than $10,000, then you might want to consider a bank wire. Simply click on the bank wire option on your FX dealer s site. The website will then tell you what banking information you will need to fund your account. The last common funding method is the paper check. It s probably the most convenient method but it s also the slowest. If you fund with this method, you ll want to expect it to take at least 5 to 10 business days for your funds to clear and be ready for trading. Note: Here s what experience has taught me The larger your trading account is, the less you will risk per trade. Risking less is always a good thing. It means that a few losing trades won t kill your account. So having a well-capitalized account is definitely the key to success in trading. Step 3: Two Things You Must Do Before You Place Your First Live Trade! Again, I wish someone had told me this before I started placing live trades. First, download your firm s demo trading station. Secondly, ask one of their customer service reps to walk you through the trading station. You want to do this so you know the mechanics of placing a trade, a stop order and how to exit an order long before you place a real trade. You will also be able to practice free of charge before you risk any real money in the market. Now, lots of experts recommend trading a demo account first (that s your practice forex account ). In general, I also think it s a good idea to set up a demo account to be familiar with the software. But that s all a practice account lets you do understand the software. It s NOT a good representation of how you will trade. Here s why: Once you start trading with real money, you are much more emotionally invested. So trust me, you ll trade differently with real money on the line (even 1 micro lot) than you will with any number of demo lots. It s a lot like losing monopoly money. At the end of the day, it s just not that important. Step 4: Get Educated So You Can Devise a Trading Strategy! Up until this point, you have a live, funded account that you are NOT using yet. You have a demo account that you ve used to learn the mechanics of trading. Now, BEFORE you place your first live trade, it s time to start researching. Watch videos with helpful tips, like those we ve made available on our YouTube channel. I see people wing it first and it ends up costing them a lot. Then they back up and do it right. It s like trying to build something without reading the instructions first. Bad idea. You also want to get a forex education because it helps you to devise a strategy that could involve charting techniques called technical analysis or fundamental analysis. This might involve watching the economic calendars for clues as to how an economy is doing. Or it may involve both. So start reading to get some insights on this. Okay, so now you have a live, funded account. You know the mechanics of the trading station and you ve just completed a quick, online course over the past few days. Here s what to do next. 4
Step 5: Final Things to Consider before Placing your First, Live Currency Trade Some final advice before you start trading Don t start off trading multiple lots. Start off trading one micro lot in your micro account OR one mini lot in your mini account. This way, when you have losses at first - and we all do - they won t be compounded by multiple lots. Trade with the daily chart s trend and never take counter-trend trades. This way you ll have an edge over time. Use wide stops because your trades will need some breathing room. If you set your stop-losses too close, they are bound to get hit and they will cause you more unnecessary losses. Focus at first on buying the country with the strongest fundamentals if you use a fundamental approach. Or focus on buying the most distinct upward trending chart if you are a technical chart trader. If the trend isn t obvious, scroll through the charts until you find a trend that you could see from across the room. All of these final tips will help to increase your odds of success. Happy Trading! Sean Hyman, Professor FX P.S. Making the jump from beginner to being a serious trader doesn t have to be scary. For our Currency Capitalist Premium subscribers, we bring the most up-to-date forex news, indicators, and potential big plays on a daily basis. We ll give you the tools and information you need to become a pro without losing your shirt. You can get started today for just $5 a month less than the cost of a fancy coffee. To find out here, click here now. 5
Meet the Experts Sean Hyman Editor of Currency Cross Trader, Currency Capitalist and Investment Director of World Currency Watch With over 20 years experience as a stockbroker, manager, and trader Sean has helped countless thousands of investors build their portfolios in both up and down markets. Sean s background stretches over many financial instruments: stocks, options, mutual funds, ETFs and currencies. However, through the years, he s gravitated towards the enormous profit potential in the Forex market because the currency market has the best opportunities even when markets are crashing. He also loves the flexibility of a market that trades 24-hours a day, has tight spreads and larger volume than any other market in the world. Sean loves sharing that knowledge with others. A born teacher, Sean used to teach special courses to up-and-coming Forex traders. Today, thousands of our readers use their vacation-time and fly cross-country to attend Sean Hyman s workshops each year. He s the editor in chief of our most popular Forex trading research publication, Currency Cross Trader and without a doubt, the most skilled Professor of FX you ll ever meet. You can also catch a glimpse at some of his best currency plays our Currency Capitalist Premium e-letter each day. Evaldo Albuquerque Editor of FX Breakout Alert and Currency Capitalist Evaldo Albuquerque is one of the top young traders in America today. This native Brazilian has achieved a level of accuracy rarely seen. Of course, past performance does not guarantee future results, but Evaldo is one of the few analysts we know, who s been able to tap into markets far beyond Wall Street s comfort zone from Poland to Thailand and Israel to South Africa. Each week, Evaldo shares those off-the-radar opportunities and his best research with his FX Breakout Alert subscribers. FX Breakout Alert provides insight and analysis to help subscriber s navigate the waters of the world of emerging market currencies of countries like Poland, the Czech Republic, Thailand, Mexico and South Africa, just to name a few. You can also hear from Evaldo in our daily e-letter Currency Capitalist Premium, where he reveals the best currency plays to capitalize on the currency moves every weekday. Tom Gregory Editor of 8-Minute Currency Trader Our newest Forex team member, Tom Gregory started out in life as a high school English teacher before catching the Forex trading bug and moving over to the financial world full-time. Tom then spent three years as the chief online course instructor for the biggest Forex brokerage in the United States. To this day, Tom is still teaching. At our events each year, Tom conducts a LIVE masterclass that shows you step-bystep how to trade the market and profit from mini flash-crashes which occur each trading day. Three days a week, Tom teaches his 8 Minute Currency Trader subscribers how to trade in the $4 trillion Forex market and grab gains just like the pros do on a minute-to-minute basis. In these exclusive webinars, his subscribers learn how to take advantage of the most liquid times in the market, use stock moves to profit in the currency markets, and grab pips. 6