Hey hey, what's up my friends, so welcome to the ultimate forex trading course for beginners. So this is a comprehensive trading course that will teach you everything from a to z right to becoming a proficient forex trader, so the cost is structured in a step-by-step manner. So this is really for you if you have no forex trading experience or very little forex trading experience, so the course is structured in such a way where the earlier lessons right builds on the last. So you can't just you know, maybe let's say skip to the last section, because it might not make sense to you, especially if you have no forex trading experience.

So my suggestion is to go through this program, step by step as the techniques the strategies, the concepts right builds on the foundation that you have learned earlier. At the same time, some of you watching this might be an experienced trader. If that's the case right, i will put the timestamps in the description you can see. You know which part of this training video might interest you, which topic right and just go to the relevant section of this video.

So without further ado, let's get started so in this section you will learn number one: what is forex trading, who are the biggest players in forex trading, the advantages of forex trading over the other markets like stocks and what are the forex market hours? So, let's get started so, first and foremost, what is forex trading well, forex stands for foreign exchange in case you haven't, you know, realized it, yet it is simply an exchange of one currency for another, and you might be thinking. Why do i want to? You know exchange currencies right now, very simple, let's say, for example, you want to go on a vacation and, let's say you're in the u.s, and you want to come to singapore for holiday. Well, guess what? If you bring your us dollars into singapore and buy a bowl of noodles, the lady will give you the you know like what you're trying to do man so clearly right. You can't use us dollars in singapore, so what you need to do is to go to a money changer, maybe in the us, and what you'll do is sell your us dollars in exchange for singapore dollars, and then you can, you know, come to singapore.

Have a nice holiday have a bowl of noodles rice and you know have fun. So that's pretty much. You know one example of uh forex trading, or rather you know the exchange of currency and what the purpose is for, on the other hand, for corporations, let's say a company like toyota who produces car. Let's say they need to buy some rubber for their tires.

For example, okay - and you know uh, you know they in japan right, maybe they are not a producer of rubber and they need to go to india to buy some rubber for their cars. So what do toyoto toyota cooperation do? What they do is they will sell their yen in exchange for indian rupee, so they can use that indian rupee go to india and buy some rubber for their tires. Make sense. So that's another example of forex trading.

One is from a retail perspective and one is from a corporation perspective, and this is a six point: six trillion dollar market. The forex market is a six point. Six trillion dollar market look at the number of zeros. My man it has more.

The number of zeros is even more than the the hair i have on my head, so that's a huge huge market so who are the players of forex trading? So let me just you know, give you a very simple chart right to kind of you know, break down who trades the forex market, so you can see over here. Primarily the forex markets are traded by. You know the major banks this could be due to you know hedging their portfolios feeling they are. You know, uh meeting their requirements of their clients like commercial companies which i'll explain shortly uh this could a forex market is also you know, traded by hedge funds.

For you know speculative purposes, maybe to hit their portfolios and done by commercial companies, for example like toyota, as i've mentioned earlier, so, for example, how does commercial companies and bank work hand in hand? So very simple. So let's say you know a company like again toyota. They know they need, let's say they want to buy rubber from india. They can't use yen in india because you know the indians might think you know what is this piece of paper right? Am i supposed to make a paper plane out of this? No, so what toyota will do is they might go to a bank and say hey, i need to exchange.

You know x, number of yens right in exchange for indian rupee, so commercial bank will go to i mean a commercial company will go to the bank right and you'll settle this uh this transaction. So this is how they kind of work interrelated together and of course, banks can you know trade them within uh among one another to hate their portfolio and stuff like that and finally, at the bottom of the food chain, you have the retail traders like us who You know go into this, for maybe uh speculative purposes could be you know going for vacation. You need to change a bit of currencies so yeah this is uh largely. You know what what are the players in the forex markets do so advantageous of forex trading.

So what are the advantages? Number one right? It is low barrier to entry, so you can start with. You know as little as 100. So, unlike you know, futures or stocks, where you probably would have to start with a larger amount for forex trading right to open an account 100 right is i'll, say enough right to open an account. It has high liquidity, so you can enter and exit your trades easily.

So if you trade, forex and you want to buy - let's say a currency pair like euro dollar, you can pretty much get at the price right that you see on your screen. Unlike you know, certain markets like let's say, penny stock, sometimes uh market is moving quickly or market is illiquid when you thought you buy it hundred dollars and end up. You buy the stock 105 dollars due to you, know, slippages and stuff like that. So in forex trading you still have slippages, but i would say it's lesser.

Compared to the stock markets, then uh the market is open. 245 for forex right. You can trade pretty much any time you want, unlike the stock markets, which is, you know, just open for a fixed number of hours in a day. So what are the forex market hours so, as mentioned right, forex is open 24 hours five days a week.

So it's open from sunday to friday, right depending on where you are in the world, if you're like me in singapore, it's open from monday to friday! If i mean monday to saturday, if you're in us, then you'll be from sunday to friday because of the uh hours in the forex market because of your time zone, so what are the forex market hours? Okay, so let me just break this down, so you can understand this chart. So first one over here is the daylight saving time. So this refers to the summer months in u.s, okay, in the overseas in other countries, in singapore, we don't have daylight saving time. So this is a bit uh new to you.

If you are in asia and the time that we use to depict the hours we use gmt over here, okay, so, for example, let's say uh london market right for summer period, the london session right starts at 7. 00 am gmt and ends at 4, 00 p.m. Gmt, so 1600 is in essence at 4 pm. If you convert it.

Okay for new york, it starts at 12 p.m, gmt the new york session, and it ends at 9 pm gmt new york session. So you can see how this uh, this uh table right breaks down the different forex sessions and their open and closing hours. So this is for daylight savings time during the summer period and for standard time right during the winter period right. The hours right are slightly different.

They are different by an hour. So if you look now at london again now we open at 8 am, whereas previously it opened at 7. 00 am okay, so previously 7 am here so during winter months right it starts at 8am and ends at 5pm for new york. It starts at 1 pm and close it or ends at 10pm.

So you can see this table here. I would say it's useful right to to know what time a certain forex market session opens or closed in your particular time zone, and some of you might be wondering hey ray. How do i know whether is it a winter or summer period? Simple, just google, if you google right, then you know whether hey is it now standard time or is it daylight savings time? So i'm not going to put that down here because it really depends on the time of the year. So let's do a quick recap.

Number one forex trading is simply an exchange of one currency for another. It's traded by banks, corporations brokers and retail traders. Like you and me, forex trading has a low barrier to entry, high liquidity and the market is open. 24, 5.

and finally, the forex market hours are broken down into four different sessions. The sydney session, the tokyo, london and new york and one thing to add right. A bonus thing is that uh, the most volatile session right in the forex market is during the london and new york overlap. So it's actually during this few hours from here to here, because both the london and the new york session are open and these are kind of like the biggest financial markets in the world.

So a lot of transactions are going on during this forex market hours and if you look at the forex charts like the 15 minutes or one hour time frame, you can see that during this period right, the candles are moving a lot a lot more. During this a few hours of the day, so this is just one additional thing to share with you. Okay, so we have done the recap. So that's pretty much it now moving on right, you will learn what is a currency pair? What is the base and code currency? What are the different types of currency pairs? So, let's get started number one.

What is a currency pair, so one thing to note is that you trade currency in pairs, not as a standalone. So, just like you know, when you go to a supermarket to buy an orange, you don't say: hey i want to buy some orange, they will tell you yeah, you want to buy some orange right, but you have, to you know, exchange right. Your money for an orange so same thing for currency pairs right when you want to trade currencies, you have to exchange one currency for another currency. You can't just say i want to buy some euros, then the other person on the or the other party will be thinking.

Sure you're gon na buy some euros. So what are you giving me in exchange? So this is why currency pairs, or rather, why currencies right trade in pairs, not as a standalone, so in essence right currency pairs, help you measure a currency's value against another currency. So, for example, let me explain right euro against the dollar, so when you, let's say, buy the euro dollar in essence, what you're doing is you're buying the euro currency all right and you're selling the us dollar. So in essence, right when you are buying the euro you're, giving the other party us dollars in exchange for the euro currency, so just like you're buying an apple from the supermarket you're, giving your money in exchange for that apple, so it works in pair.

Likewise, for dollar against the yen, you are buying the us dollar and in return right, you give the other party, japanese yen, make sense moving on what is a base currency or what is a base currency. So let me explain: the base currency is in essence right. The first currency that appears in a currency pair, so this will illustrate so, for example, euro against the dollar. The first currency of the pair is called a base currency and i'll explain why shortly so? What is a code currency? So the code currency is the second currency that appears in the currency pair and for the euro dollar example.

The us dollar is the quote currency, and now you might be wondering hey wayne and what's the purpose purpose of all this man. So let me explain the purpose of all this is to tell you how much it cost in one in code currency to buy one base currency. I know that sounds like a technical, full, so i'll break it down very simply which i've actually done earlier. So, for example, euro dollar at 1.3500.

What it means is, you know that euro is the base currency right, let's call it b base and the dollar as mentioned is the quote: currency, that's pretty cute. So this tells you how much it costs in code currency to buy one based currency. So in essence, what this tells you is that for one euro dollar it will cost you one dollar and 35 cents usd. So let's say you go to a money: changer, hey! I'm gon na buy one euro, man and the guy said sure my man give me one dollar and 35 cents usd and i'll give you one euro, that's how it works right and that's how you kind of interpret this right.

Okay, it tells you how much it costs in code currency to buy one base currency, and i think that should be a pretty self-explanatory. If you don't understand this, just rewind this video and i'm pretty sure, you'll get it. So when you're trading currencies right, there are different types of currency pairs and i'll explain what are the three different types of currency pairs that you'll encounter number one is what we call the major currency pairs number two: we have cross currency pairs and number three exotic Currency pairs, so let me explain major currency pairs. These are in essence right, or rather they refer to the most traded currency pairs in the world.

So these are the seven most traded currency pairs in the world. They're all uh dollar denominated, like you, know the euro. Against the dollar, the pound against the dollar dollar against the canadian, etc. So if you are new to forex trading right now, these are, i would say, the seven currency pairs that you might want to consider starting, i mean to trade first because they are usually uh i'll, say their transaction costs are lower due to lower spreads, and you Know you get less slippages when trading this uh most seven most popular currency pairs, so these are the major currency pairs, the next one cross currency pairs.

This refers to currency pairs which are non-usd which doesn't have the usd you know denomination in it. So, for example, let's say you have: the euro crosses euro crosses simply means that their currency pairs that has the euro currency in it. Like the euro against the british pound euro against the aussie dollar euro against the new zealand dollar, then you have the pound crosses like pound yen, pound against the aussie dollar, pound against the new zealand dollar, etc, pretty pretty simple stuff and finally, the last type of Currency parents that we have is the exotic currency pairs. This is when one may, when one major currency pair, is paired with a developing country's currency.

So, for example, us dollar against the mexican peso us dollar is a major currency pair and mexican. That's all right! This is a developing country's currency. So again this meets the requirement right. One major currency is paired with a developing country's currency.

Next, one, the euro against the turkish lira euro is a major currency. Turkish lira is a developing country's currency and finally, the indian rupee against the british pound again. So this is what we mean by exotic currency pairs. So one thing to note right is that when you trade exotic currency pairs, the spread tends to be wider.

So if you don't understand what the spread means right, don't worry as you progress on your trading journey. You understand, but in essence right the transaction cost to trade exotic currency pairs. They are more expensive compared to the major currency pairs. So a quick recap number one currencies: they are traded in pairs, not as a standalone.

The base currency is the first currency in the pair. The code currency is the second currency in a pair, and then there are three types of currency pairs, major cross and exotics. So with that said, let's move on so moving on. In this section, you will learn number one.

What is a bit number two? What is a paypal and number three, how to read a currency pair code? So let's get started so first and foremost right. What is a pip? A pip stands for percentage in point in essence, right. What it's trying to do is to measure it's a measure right of a change in value in the currency pair. Don't worry we'll get to that later, so a pip right, remember it's! The fourth decimal place in the currency pair code, so let me explain right.

Let me give an example. So, let's see, let's say right: euro against the us dollar moves from 1.3500 to 1.3505. Now, let me ask you: where is where is the number to look at when you want to find out? What is the the p value change so remember, pip is the fourth decimal place, so this is basically the fourth number after this dot. So one two three four you're looking at this number here so you're, comparing the difference between this number here and this number here: okay, so quiz time, how many pips difference is this? So, let's find out an answer is quite straightforward.

This is actually an increase right of five pips from 1.3500 to 1.3505. It's a difference of five pips, so you can see right the last digit, the fourth decimal placing digit right. It has moved from zero to five. That's an increase of five pips.

Let's do another example. Let's say this time around the euro against the dollar moves from 1.3400 to 1.3350. Now, how many pips is this right? Let's uh give you five seconds to figure this out one two: three: four: five: okay, so the answer is a decrease of 50 pips. So in essence, right this uh euro against the dollar.

It has dropped 50 pips from 1.3400 to 1.3350. So quick tip that i have for you that if you have difficulty you, you know using your fingers counting and stuff like that, you just take a calculator. Take this last four digit minus this last four digit and you'll get 50.. Okay, that's another way to go about it.

So moving on one thing to share is that the yen pairs they are special. They are not like. You know the other currency pairs where the pip right is at the fourth decimal place for yen pairs. Like you know, the dollar against the japanese year and the pound against the japanese yen, the pip value, is the second decimal place, so bear this in mind.

Only for yen pairs, the pit value or under the the peak check the the peak. When you look at the currency code, right is at the second decimal place. So let me give you an example: let's say the dollar against the japanese yen moves from 100.10 to 100.15. How many pips is that, how many uh, how much pips did this pair move again very simple, you can just remember second decimal place is where you look at for the pit for en pair.

So you just take 15 minus 10 and the answer is an increase of 5 pips next one another example: let's say the dollar against the japanese yen moves from 100.25 to 100.1. How many pips difference is this again very simple: take the uh 1 0, which is 10 minus 25, and you get a decrease of 15 pips, and this is in essence right how you you are measure right, how many pips a currency pair has moved and to Take things a step further because the forex got you know like to make your life a bit more difficult. There's another thing called a pipette and in essence, right, a pipe is simply known as fractional pips. They are 110.

The value of a pit confusing. Don't worry an example usually solves your pain. So, and one thing to bear in mind is that a pipette is the fifth decimal place for most currency pairs for the yen pairs. It's the third decimal place, so an example would ease your pain.

Let's say, euro against the dollar moves from one three: five: zero: zero, five, which this one here is the pipette to 1.3505 seven. This seven here is the pipette value. So how many pips movement is this? So again you just do a simple math. You will realize that this is an increase of 5.2 pips makes sense.

I know it makes sense right. So let's do a quick recap number one. A pip is a measure of a change in value right in the currency pair. It's the fourth decimal place for most currency pairs, except the yen, which is the third decimal place.

If you want to be a little bit more, you know particular there's something called the pipette, which is in essence, 110 of a pip. So in this section, what will you learn? You will learn number one. What is leverage number two? How leverage affects your trading and, finally, what are the different types of forex lot sizes? So, let's get started. What is leverage, how leverage affects your trading and what are the different types of forex lot sizes? So, let's begin so what is leverage so intuitively? I know you know what leverage means, but let's explain this when it comes to the forex markets, so leverage is in essence right.

The ability to trade, a larger amount of money relative to your account size and leverage is a double h so and i'll explain more. So let me give you an example: let's say you have a thousand dollars in your trading account and you buy 10 000 worth of euro usd. This means you borrow the extra nine thousand dollars to trade and, if you want to measure the leverage, this is a leverage of one to ten. Why is this a one to ten? You take the ten thousand dollars that is worth of the euro, usd divided by the initial capital that you have in your account and you get 10.

So this is a leverage of 1 to 10.. Now the question is what, if euro usd goes up, how does leverage impact your trading so recall? You have a thousand dollars account and you buy 10 dollars worth of euro usd. Your ten thousand dollars is now worth eleven thousand dollars. Why eleven thousand dollars very simple? You just take ten thousand dollars and you multiply by one point one because you actually earn 10, because this currency pair went up 10, so 10, 000, minus or rather multiplied by 1.1 is equal to 11 000 or if you look at it another way, 10 of 10 000 is one thousand one thousand, plus ten thousand equals to eleven thousand.

That's another way to to do it. Next, you return the nine thousand dollars that you owe what you're left with is the two thousand dollars and remember the two thousand dollars right. What you had initially at the start was a thousand dollars, so, in other words, your profit is one thousand dollars all right. Two thousand dollars minus your original capital that you started with.

You made a profit of a thousand dollars on this particular trade, and i know man. This looks easy man, i'm gon na, be the next market. Wizard millionaire trader well not so far as my young part padawan, because what if euro usd goes down 10 and how would this change so now recall? You have a thousand dollars account and you buy ten thousand dollars worth of euro usd. Your ten thousand dollars is now worth nine thousand.

Why is that? Because ten thousand? Okay, if you lose ten percent of your capital, now it's worth nine thousand dollars. You return the nine thousand dollars that you owe you're left with zero dollars. In fact, i have no idea why there's four zeros here but zero is zero, is zero. Okay and your original capital is a thousand dollars.

So this means your loss is a thousand dollars because you started off with a thousand dollars and you're left with zero zero. Zero zero, so in other words, you lost a thousand dollars. So the key thing to point out is that leverage can amplify your gains and losses. So, if you think about this, if without leverage, this right would have been a 10 loss to you, but because you used leverage, you lost 100 instead of 10.

So likewise, when you had a gain earlier, when you had a profit, when the market went up ten percent, if you didn't use leverage that would be a profit of ten percent for you, but because you use a one to ten leverage, it is amplified ten times You made a profit of a hundred percent, so in this case it's a thousand dollars, but in percentage term is 100 okay, so this is uh pretty much. The key thing that i want to point across is that leverage it can amplify your gains and losses, and for this case, in this example, you lost 100 of your capital because uh you use a 1 to 10 leverage. If you didn't use leverage at all, there would be a 10 loss of your capital. Moving on right, i want to talk about forex lot sizes.

So what are the different types of forex slot size out? There number one. We have a standard lot which is equivalent to a hundred thousand units. So when you key in a hundred thousand units to buy in your forex broker, you are essentially buying one standard lot, then below that we have a mini lot, which is 10 000 units, followed by micro lot, which is a thousand units and smaller than micro lot. We even have nano lot, which is a hundred units, so one thing to point out is that you can trade fractional lot sizes.

It doesn't mean that you only can trade one standard lot, one mini lot or five standard lots. You can, you know, break it up and trade, something like 1.3 standard lot. You can trade 2.5 mini lots. 3.7 mini lots.

2.6 standard lot. 1.5. Micro, lots. It is all possible right when trading the forex market.

So in a way you can, you know better, manage your risk, as i will explain how that will work in the later section. So let's do a quick recap. Number one leverage is the ability right to trade, a larger amount of money relative to your account size, and yes, you have seen right. Leverage is a double double h, so it can amplify your gains or losses.

And finally, we talk about. You know the different types of load sizes in the forex market standard lot. Micro lot mini lot and nano lots okay. So in this section you will learn what is a pip value and how to calculate a pip value.

So what is a pip value? So a pip value in essence, is trying to answer the question. How much is one pip worth and to find that out right? You need to answer two questions number one, the lot size that you're trading and number two, the code currency of the currency pair. So let me explain number one the lot size so, as you know, right in the forex market, there are different lot sizes, you know, standard lot, mini lot, etc. So one standard lot right is actually equivalent to a hundred thousand units and it's worth ten dollars per pip.

One mini lot is ten thousand units and it's worth a dollar a pip and one micro lot is a one thousand units which is 10 cent per pip or 0.1 dollars. A pip, and one thing to point out is 10 mini. Lots is actually equivalent to one standard lot, because if you look at this 10 000 units you multiply by 10 - is 100 000 units, so in other words, 10 mini lot is one standard lot. So, needless to say, 10 micro lots is equals to one mini lot.

Right, a thousand units you multiply by 10 gives you 10 000 units, so 10 micro lots, 10 micro lots is one mini lot as well. Okay, so so bear this in mind - and this holds true only if your code currency is in us dollar, like euro dollar, aussie, dollar, new zealand, dollar, etc. So clearly, right what? If your code currency is not in u.s dollar. So this is why we need to look at the second thing, which is your code currency.

So let's say, for example, if the code currency is in euro, then one standard lot clearly is 10 euro a bit. One mini lot. Is one euro a pip and one micro lot is 0.1 euro per bit makes sense all right so far so good. So let's have a look at an example.

You trade, euro usd and buy 2.3 standard lots. How much is the value per pip? So if you just you know, look at this, you know that 2.3 standard lot is equals to two standard lot and three mini log. That's one way to look at it or you can look at it as 23 mini lot. That is the same thing so, depending how you want to look at this.

Let's say: let's treat it as 23 mini lot. We know. One mini lot is worth one dollar per bit. Okay, so clearly, 23 mini lot means it's 23 per pip and there you have it moving on next example: let's say you, trade, the pound against the aussie dollar and by 5.5 mini lots.

How much is the value per pip? So again, just remember the two things i shared with you number one: what is the lot size? Trader? 5.5. Mini lots. Okay, great next thing: what is the code currency? Aussie? Dollar? Great you know, one mini lot is worth one dollar 5.5 mini lots means it's 5.5 dollars. So what is the currency? The code currency? This is aussie dollar, so it's 5.5 aussie dollar per pay.

Okay, great. So that should be the answer. So if you look at the answer, it's 5.5, how do i know this because i did these slides and and uh? Clearly i don't know, what's the answer so yeah there you have it that's the answer. So all this actually would be useful to you.

If, right, let's say your, let's say right now: your account currency is in australian dollar and yeah 5.5 aussie dollar per that would make sense. But of course, as you know, there is no guarantee that the code currency will be the same currency as your account funding. Maybe you could find it in us dollar. You could find it in singapore dollars.

It could be different. So how do you actually translate this value into your own account currency if your own account currency is different from the code currency, so this is where we can take things a step further and to find out the pip value in your accounts currency. If the currency is different from the code currency, so again you need a few things number one. The lot size number two is the code.

Currency and number three is the exchange rate between the code, currency and your accounts currency. So let me give you an example, because example is your pay number one? Let's say you buy one standard lot of euro usd your account currency is in singapore dollars. The exchange rate between the usd and sgd is 1.3. How much is the value per pip? So, let's again right do this a simple exercise: you know one standard lot is 100 000 units.

Reynolds say: one standalone is worth 10 per bit: okay, 10 per bit, then you realize that your account currency is different from the code currency. So what now? So? What you need to do is to to convert right usd into sgd. As you know, right now one usd is worth 1.3 sgd. So this means one.

Us dollar is worth one dollar 30 cents, singapore dollar. So if you want to convert this 10 us dollars into singapore dollars, i just take this multiplied by 1.3 and i have a figure of 13 singapore dollars. Sgd, okay and that's the answer right. The value profit will be 13 singapore dollars per bit and there you have it right in case you want to know the kind of like the math breakdown is 10 usd per bit multiplied by 1.3, because it's the exchange rate between us and singapore dollars and you Get 13 singapore dollars per pip.

Another example: shall we to really hammer home this concept? You buy two standard lots of pound against the new zealand dollar. Your account currency is in canadian dollars. The exchange rate for new zealand, canadian is 1.5. How much is the value per pick, so i'm going to give you five seconds to do this.

I'm just kidding five seconds too fast. I'm gon na do this together with you and let's find this out, but you know kind of, like you know, pause this video and do it on your own. If you wish to, if not, i'm gon na walk you through how to do this step by step. So again, first thing: first, is the number of lots.

We are trading two standard lots. You know: that's equals to 20 new zealand dollar per pip. Okay, if you do not know why it's 20 go and look back at the earlier slide, so it makes sense. Your account currency is in canadian dollar exchange rate between new zealand and canadian.

Canadian dollar is 1.5, so what i need to do is for to find out how much is 20 new zealand dollar worth in canadian dollars. How much is that very simple, just multiplied by the exchange rate, this prevailing exchange rate? Of course, this is not a real number. I just came up with this. If you just look at the normal forex website, you will have you can find out.

What's the prevailing exchange rate so 20, i multiply by 1.5. It will give me right how much 20, or rather 20 new zealand dollars is worth in canadian dollars. An answer is 30. 30 canadian dollars per pip okay.

So let's have a look: tada, okay, so so yeah. So with that said right, let's do a quick recap. Number one, your pip value depends on a few things: the lot size, the code, currency and finally, right the exchange rate between the code, currency and your account currency. If they are different, if they are the same, then you just need the first two things and you can find out what is the pip value? So in this section you will learn number one: what is risk management and why it matters number two.

What is position sizing and, finally, how to calculate your position size such that you never blow up blow up. Another trading account so this topic that i'm about to share with you is very important right, so pay close attention so, first and foremost, what is risk management. So, if you ask me, risk management is the ability, as a trader, to encounter a series of losses right and not blow up your trading account. So, for example, even if you sustain a series of 10 losses in a row, your trading account should be pretty much still intact.

Yes, you have a bit of a losses along the way, but that account right should still have still have most of the money intact. So that's what risk management is all about. So it's important because you can have a winning trading strategy, but without proper risk management right you will still end up a losing trader. I can guarantee it.

So let me share with you an example. So you know what i mean so, let's say, for example, there are two traders, john and sally, and they both have a 1 000 trading account to start with. Their trading strategy has a 50 winning rate, so this means they win half the time and a one to two risk reward ratio. So let me explain what risk reward ratio is so, let's say, for example, you risk a hundred dollars on a trade.

Okay, that's the amount of money that you're willing to lose on a particular trade and the outcome for you is favorable. Instead of losing hundred dollars right, the market went in your favor and you made a profit of 200, so in other words, this 200 right is two times the amount that you had intended to risk initially. So this is what we call a one to two risk: reward ratio. Your reward right, it's two times your initial risk.

So another example. Let's say you have a 500 risk on the trade and instead of you know, losing the 500 market went in your favor and you made five thousand dollars in state. What is the risk to reward ratio on this trade? This is a risk to reward ratio of a one to ten. You were risking at five hundred dollars and you made five thousand dollars at the end of it.

So this is a risk reward ratio of one to ten next john risks, 250 per trade and sally risk, twenty dollars per trade. Let's say the outcome of the trades for both of them is in this sequence: right l stands for, losing right, lose lose, lose lose. Then win win, win win so now. What is the outcome for both traders? Let's look at john.

You can see for john. He loses 250 because the first trade is a loser loses another 250, another 250, another 250, and then he blew up so before he could. Even smell the winner, he lost his entire trading account. On the other hand, let's have a look at sally, as you can see, sally goes through the same, losing streak right.

She loses 20 dollars, lose 20, lose 20 lose 20 and then she made 40 40, 40 and 40, because this was a string of winners at the end. But why forty dollars again? Because we have a one to two risk: reward ratio right for their trading strategy. So if sally risk twenty dollars on each trade and if the market, or rather if she achieves a one to two risk reward ratio, this means a profit is two times the initial risk. So two times of 20 is forty dollars.

So this is how we get forty dollars and, at the end of it, sally made a total return of eighty dollars. So that's about eight percent gain on her account, whereas you look at john, he actually lost 100 of his account, so hopefully right using this simple example, you can see the importance of risk management right in this case both traders. They are trading with a winning strategy, but because of risk management, one of them loses his entire account and the other one is actually, you know, making some money right from trading the markets. So this is important so now the question you might be thinking: okay right now, i get it right.

Risk management is important, but how do i manage my risk? You know how do i make sure that every time i put on a trade right, i don't lose everything and more. So this is where the next topic comes into play position sizing. So what is position sizing so position? Sizing is simply right. Trading.

The right number of units right such that, even if a trade ends up being a loser, it's only a fraction of your trading account. Okay, let me repeat once again right position. Sizing is knowing right how many units you should trade such that, if that trade goes against you, you only lose a fraction of your trading account and, as a general guideline, i usually advocate right not to lose more than one percent of your trading account on each Trade, so, for example, let's say if your account is like a ten thousand dollars trading account. One percent of ten thousand is a hundred dollars, so this means every trade you put on.

You should not lose more than 100 on each trade and now brings us to the question right. How do we, you know calculate that in such a manner where you know you know you will lose more than 100 on each trade. So to do that, you need to know a few things okay, so this is kind of like the secret formula right, so position size is equals to the amount to risk right. The amount of uh dollar that you're willing to risk divided by a stop loss, multiplied by value per pip, so amount to risk is usually.

I recommend one percent risk on each trade. Some some traders will go with two or three percent uh. That's pretty much. You know up to an individual trader and after which you divide it by your stop-loss multiplied by your value per bit.

So i'm going to share with you a very simple uh way to do this. Okay, you don't have to so i'll. Just go with you. A manual way and then after which i show you how to do with a faster way, so, let's say you're, risking 100 you're willing to raise 100 - and let's say you know, your stop.

Loss is, let's say: 100 pips, okay, so you put 100 and your value per pip right. Let's say: you're trading euro usd is uh 10 per bit for a standard lot. So you put your 10 okay, you plug in the numbers. You get 100 divide by a thousand, and if you do it, you end up with 0.1 standard lot, which is equivalent to one mini lot.

So the trouble with this is that your value per bit is constantly changing. It really depends on the code currency. It depends on the account funding that you have funded with with your account, so you can see that you know things can get really cumbersome right. So one thing i suggest is to use a position sizing calculator to make your life really easy, and i'm going to show you how to do this step by step.

So you can google, you know, position sizing calculator, and this is one that i've found. You can. You know, use it, it's free. So let's say you're trading again euro usd your account currency.

Let's say it's in us dollar. Let's say your account. Size is like what i said earlier: ten thousand dollars and your risk on each trade. Let's say it's one percent.

You can put your one percent in this case you ever switch to you know, dollar terms. Let's say you want to risk a hundred dollars, which is also one percent. That is fine as well, but in this case let's go with the percentage, let's say one percent: let's say your stop. Loss in pips right is 100 pips put in hundred contract size.

Let's leave it at hundred thousand, which is equal to one standard lot. You click calculate and there you have it right tells you the lots to trade is 0.1, which is equals to 0.1 standard lot or one mini lot. Can you see how fast this is? Let's do another example: let's say this time: around you're, not trading euro usd you're trading pound against the aussie. Let's say your account: currency is in new zealand dollars.

Okay and let's say this time: you're a baller, your account size is hundred thousand dollars and you're a baller, and you still risk one percent on this trade. Well done and let's say your stop-loss this time around is 350 pips contract size again hundred thousand. You click calculate. It will tell you how many units to trade right such that.

If even if the trade hits your stop loss, you will only lose one percent of your account. So you click calculate, and in this case it tells you that you can trade 0.263 standard lot, which is about 26 uh. Sorry, uh, 2.63 mini lots make sense. So again, this is very useful.

So again, let's you know interpret this together. So this means right for this particular pound or z, trade, and, let's say your account - is in new zealand dollars and you're risking one percent of this hundred thousand dollars. This means right if the trade goes against you right with a stop loss of 350 pips right. You will lose right: a thousand dollars thousand new zealand dollars right in your trading account, which is the one percent that we have defined over here right, and this is the position size that you should be trading with.

2.6 mini lots; okay, it makes sense. So this is how you use a position: sizing calculator. So, okay, let's do one more example. So you really understand this big time.

So let's say this timer we do something simple, like aussie dollar, you want to trade, the aussie against the us dollar. Let's say your account: currency is in aussie how about that same uh just put aussie dollar. Let's say your account size this time around is five thousand dollars and let's say you are risking a little bit more two percent risk on each trade which is still about uh hundred dollars. So your stop loss this time around.

Let's say it's: only 50 pips okay contract size again hundred thousand units. So now the question is how many units right? Should you be trading such that if this trade goes against you and hit your 50 pip loss? The loss of on this trade is only two percent of your account two percent of this five thousand dollars. Five thousand aussie dollars click calculate, and it tells you that you should only be trading 1.53. Mini lots make sense.

Okay, so don't worry i'll share with you. Uh uh, we'll talk more about you know, position sizing risk management with chart examples later on, but for now i just want you to to know how to use this very useful calculator. Just click, google. There are many free available ones and just pick whichever that you know you're comfortable with.

So let's do a quick recap. Number one position: sizing is the tool to manage your risk and use a position, a position, sizing calculator right to make your life easier. I don't expect you to manually, you know calculate it. Most brokers usually have an inbuilt calculator function.

If it doesn't have right, then just you know you go to any of the free website via google and you can use the calculator to help. You calculate the number of units to trade such that you know, even if the trade is a losing trade right, you only lose a fraction of your account now moving on. Let's talk about the different types of forex orders right. So in this section it's all about you know, learning the different types of forex orders, and one thing to point out is that uh there are many more different types of orders that you can use, especially when you're using professional trading platforms, but the ones that i'm About to share with you right now is, i would say, the ones that you are likely to use right most of the time.

Okay, so let's get started first, one market order. Second, one is a limit order. Third, one is a stock order and finally, a stop loss order. So let me explain each one of them step by step.

First, one is a market order, so let's say it's a buy market order order because it could also be a sell market or the concept is the same, but in this case let's go with, let's, let's say a buy market order. This is in essence, right. You're, trying to you know, buy at the current market price right now, no matter what so this is like you know, sending an order to your brokerage platform and say hey. I want to enter euro usd right now, no matter what now, so your broker will fill you at a trade at the current prevailing price.

So the pros to it is that you know you're guaranteed to enter a trade. There is no what if, but or whatsoever, you're guaranteed to enter a trade, but the downside to this is you might get sleep page right during fast moving markets and you might be thinking right now. What is slippage man? So here's the thing right in the forex market. Yes, it's liquid most of the time, but when it when there's a big piece of news coming up like let's say you know, nfp, non-farm, payrolls or fomc meetings.

Right, let's say euro usd is currently trading at one. Three: zero: zero, zero right, but during fast moving markets you, if you hit market order right, you could get slippage right where you thought: hey, i'm gon na buy a 1.3, but you end up. You know, buying actually at one three zero. Let's say two zero.

You had end up paying 20 pips more than expected, so this is kind of like the downside to using market order because of this uh slippages. So instead of you know buying at one point three: zero: zero, zero. You end up buying at one point three: zero. Two zero, a slippage of 20 pips so in other words you're paying 20 pips more than you expected okay.

So this is a market order. The other type of market order right is limit order. So again, let's talk about buy, limit order, sell limit order is just the opposite, so for a buy limit order right, it's an order, an order to buy below the current market price. So let me give you an example.

So, let's say market is in a range between these highs and this lows it goes up, comes down, goes up, and now it's in the middle and you think to yourself. Ah man, price right now is in the middle right i want to buy. I want to be a cheapskate, i want to buy the best price and it seems like the best price is near this lows over here, and let's say this is zero. Usd.

This lows is around one point: five, okay, so what you can do is you can place a buy limit order at one point: five: zero: zero, zero! So such that, if the market comes down into this level, you will get filled on that buy trade. But of course, if the market doesn't come down, you won't get fuel, so that is kind of like the pros and cons to using a buy limit order. So let me give you a chart. Example you can so you can see what i mean.

So this is uh, for example, pound canadian, let's say you're looking at this chart, maybe on the eight hour time frame, okay and you zoom out a little bit - and you realize oh this - this market right, this seems like a good place to buy. This is an area of support. Don't worry if you're not familiar with this technical term, i'll explain more in the later section, but let's say hey: you want to buy around 172 right. This looks like a good place to buy because the market has bounced once twice.

You know, and three times over here this looks like a good place to buy, but the current market price is at this point over here, which is almost near 1735. So what can you do? You can place a buy limit order over here, a buy limit at 1.72, so this means only if the market comes down low enough into this 1.72 level. Only then will you get filled. If not, you won't be in this trade.

So this is what a buy limit order means. So, of course, all right. The good thing about it is that you get to buy at the price you want. The downside is, you might not get filled on the trade, so maybe you're waiting for that level, but the market doesn't come to the level and instead you know if it continues.

You know going up higher then clearly right, you wouldn't, you know, be in the trade. So vice versa, right for a sell limit order, the concept is just the opposite, so moving on the third type of order is a stop order. So again, let's talk about buy stock order, so this in essence, right is to in order to buy only if the market moves above a specific price level. So you might be thinking what does that mean? So again, i can give you an example.

Let's say, market is uh, let's say it's trending higher, it goes up, pulls back, goes up, pulls back and it's starting to go up, and you tell yourself i'm looking at this chart and it would make sense right that i want to buy only if the price Can breaks above this highs because, if you can breaks above this highs, then there's a good chance that this market could continue higher. So you want to tell yourself i will only buy if the price can breaks above this high if it doesn't break above this high. I will not, you know, enter a trade, so what you can do is to use a buy, stop order. So an example is this one here, if you look at this chart dollar against the chinese yuan, this is the eight hour time frame.

So again you can look at this and say hmm at this point right right now. I have no idea when the price might go up and come back down. You know, and again i don't want to enter right now, because you know this could happen and then you're thinking to yourself. I feel more confident if the price can break above this highs only then i would be willing to buy.

So, if that's your thought process, what you can do is you can use a buy, stop order. You can place a buy, stop order at this price, around six dollars and 59 cents around this price point which is somewhere about here. So you can place a buy stock order here. Let's call it bs buy, stop not not not bs that you're familiar with, but buy stop order at 6.59.

So such that, if the price goes up and breaks above 6.59, this is an order that would automatically you know, get you into this trade right because it broke it broke about broke above this key level. 659 that you have. You know uh put into your broker platform, so it's in order to buy if the price moves above a specific price level. So this is useful right with your trading breakouts.

This order is, you know, absolutely useful, because in breakout trading the price will break out of a specific level and then you'll continue with the momentum right to hit higher. So if you have a buy, stop order, you are, you know, kind of, like assured, to enter right if the price could break out of a level. The downside to this is that it might be a false breakout. So again, what could happen is that let's say pound the dollar against the chinese yen, so this is the highest price, could go up, break out and then boom reverse right.

This is possible as well, anything can happen in the market, so this is a one possibility that could happen right if you're, you know using buy stock order to enter a trade, so the next type of order right will be uh, stop loss order. So the first three orders that i shared with you right. Those are orders right to get you into a trade so for stop. Loss order is the opposite, because this is an order to get you out of a trade.

So so, let's say we are going with a long entry, okay, so a stop loss order is in order to sell your position if the price exceeds a specific level. So, for example, let's say you market this in a range up down up down, they start to go up. Okay, and this is the area of support and you start to buy over here. Okay, and what happens is that you know, as you know, in trading, nothing is certain, there's a possibility that this market could continue to reverse down lower and lower, and if you don't bail out of your trade in time right, you could, you know, lose a lot Of money, so this is where you can use a stop-loss order and say you know, hey, you can tell your broker hey, you know what, if the market, you know breaks below this level in rate? Okay, if the market reaches this level in rate, i want to get out of that trade.

So, to tell that you will tell your broker to set a stop loss order at this particular price. Let's say this price is at two dollars right and you will exit your trade, so this is what we mean by a stop loss. Order is in order to sell your position if the market moves against you and reaches a specific price level.