The Peni2Dollarzfx Day Trading Handguide E-Book

Leguan Penigo

• Herausgeber: BooxAi
• Kategorie: Für Kinder und Jugendliche
• Sprache: Englisch

Veröffentlichungsjahr: 2023

Beschreibung

The text provides an overview of forex trading, mutual funds, technical analysis, brokerage firms, spread, and bid price. It explains the key concepts and factors associated with each topic, providing readers with a basic understanding of these financial aspects. The text emphasizes the importance of research, education, and risk management when engaging in trading activities. It also mentions popular trading platforms and tools used in technical analysis. Overall, it provides a comprehensive summary of various financial terms and concepts.

Leseprobe

Leguan Penigo

The Peni2Dollarzfx Day Trading Handguide

All rights reserved

Copyright © 2023 by Leguan Penigo

No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the publisher, except in the case of brief quotations embodied in critical reviews and certain other noncommercial uses permitted by copyright law.

Published by BooxAi

ISBN: 978-965-578-642-2

The Peni2Dollarzfx Day Trading Handguide

Leguan Penigo

Contents

Preface

SECTION 1: Introduction to Forex

SECTION 2: Currency Pairs / Currency Exchange

SECTION 3: Cryptocurrency

SECTION 4: Stocks and Other Commodities

SECTION 5: Indices/Indexes

SECTION 6: Mutual Funds

SECTION 7: Top-Down Analysis

SECTION 8: Candlestick Anatomy

SECTION 9: Price Action

SECTION 10: Technical Analysis

SECTION 11: Fundamental Analysis

SECTION 12: TradingView

SECTION 13:  Chart Patterns

SECTION 14: Supply and Demand vs Support and Resistance

SECTION 15: Technical Indicators

SECTION 16: Selecting a Brokerage Firm

SECTION 17: Opening a Broker Account

SECTION 18: MetaTrader Platforms MT4 vs MT5

SECTION 19: Paper Trading

SECTION 20: Trade Entry / Trade Exits

Section 21: Placing Trades

SECTION 22: Chart Time Frames

SECTION 23: Lot Size

SECTION 24: Spreads

SECTION 25: Leverage

SECTION 26: Contract for Difference (CFD)

SECTION 27: Margin

SECTION 28: Margin Call

SECTION 29: Glossary

Preface

I began my journey of learning how to day trade in October 2019. I distinctly remember taking an interest in trading before the whole AMC, GameStop, and Dogecoin craze. It was during this time I experienced some real gains and profits, along with many others in the market. I personally experienced first-hand not only the infinite freedom, possibilities, and benefits of investing, but more importantly, the necessity of needing to learn how to day trade correctly. I became obsessed with everything day trading. I easily invested more than 10,000 hours on the charts, viewing YouTube videos, testing strategies, and learning about lot sizes, brokers, indicators and so much more. 

I created this handbook with the most novice trader in mind. The content and material offered in this handbook ranges from those who have placed over a thousand trades in the market to those who have never placed a trade at all, and everyone in between. This handbook is intended as a quick reference user guide for any aspiring new trader who wishes to get started and any more-seasoned trader who is looking to gain a deeper understanding of the many concepts involved in day trading.

In my opinion, trading is truly the epitome of owning a superior, white-collar skill. If you desire to possess a skill that will always be yours, that is recession-proof, and has limitless earning potential, this handbook was made with you in mind. 

Remember that trading is the art of taking a position in the market that limits losses in the event of it occurring, while at the same time exposing your position to unlimited profits or gains. 

Trading is not for everyone. My past results are not indicative of anyone’s future performance or results. The images and illustrations I use in this user guide are examples of my past results and are by no means financial advice. Please trade responsibly. 

Disclaimer: This guide is not intended to be an all-inclusive book on everything related to day trading. However, the objective of this guide is to assist any beginning or aspiring trader, in better understanding the fundamental concepts. I found these concepts valuable in supporting me to be consistent in my trading journey. Many of the concepts in this hand guide are in bulleted lists and are oversimplified to better explain these concepts and to demonstrate how to practically apply them.

SECTION 1: Introduction to Forex

What is forex? How does one make money in forex?

Before I explain forex and what it is, remember it’s just one specific type of financial market. There are various financial markets in trading. For example, there is the foreign exchange market, cryptocurrency, and stock market, to name a few. If you travel to another country, you usually have to find a currency exchange booth at the airport. You exchange the money you have in your wallet into the currency of the country you are visiting. 

Forex is short for foreign exchange. It is the global financial market that allows someone to trade currencies. If you place a trade that one currency will be stronger versus the other currency and you are correct, you can make a profit. The opposite is true, too. If you pick the currency strength to increase but it goes down, you may lose considerably. The value of anything traded in the financial markets is never constant. It is always fluid, always fluctuating up and down and even sideways. The value of the dollar fluctuates constantly. As an experienced and disciplined trader with a proven, consistent systematic approach to the market, you can garner the skills to unlock the edge you need to gain financial freedom.

The key to trading, in my opinion, is that trading is the art of structuring your position in the market so that you minimize losses while exposing yourself to great gains or profits. To do this, I practice risking only 1% of the position in a trade. This practice always limits me to only a 1% loss.

Forex refers to the global decentralized market where currencies are bought, sold, and exchanged. It is the largest and most fluid financial market in the world. Daily trading volumes exceed trillions of dollars. Forex trading involves speculating on the relative value of different currencies with the aim of profiting from the fluctuations in exchange rates.

In the forex market, participants (including banks, financial institutions, corporations, governments, and individual traders) engage in currency trading. The primary purpose of forex trading is to facilitate international trade and investment by enabling the conversion of one currency into another.

Key Features of the Forex Market:

Global Market: The forex market operates 24 hours a day, five days a week, allowing participants from around the world to trade currencies. It is a decentralized market; there is no physical location or central exchange. Instead, trading occurs electronically over-the-counter (OTC) through a network of financial institutions, brokers, and electronic trading platforms.

Currency Pairs: Forex trading involves trading currency pairs which represent the value of one currency relative to another. The most commonly traded currency pairs include the major currencies such as the U.S. dollar (USD), euro (EUR), Japanese yen (JPY), British pound (GBP), Swiss franc (CHF), Canadian dollar (CAD), Australian dollar (AUD), and New Zealand dollar (NZD).

Exchange Rate Fluctuations: The forex market is characterized by constant exchange rate fluctuations. These fluctuations occur due to various factors such as economic indicators, geopolitical events, interest rates, political developments, and market sentiment. Traders aim to predict the direction of these exchange rate movements and take positions accordingly.

Leverage: Forex trading often involves the use of leverage, which allows traders to control larger positions with a fraction of the capital required. Leverage is provided by brokers. It enables traders to amplify their potential profits, but it can also magnify their losses. It is important to note that leverage should be used with caution and proper risk management techniques.

High Liquidity: The forex market's immense size and high trading volumes result in high liquidity; there is generally a large number of buyers and sellers available at any given time. This provides traders with the ability to enter and exit trades quickly, ensuring that they can execute their desired transactions without significant price slippage (the difference between the expected price of a trade and the price at which the trade is executed).

Trading Strategies: Forex trading involves various trading strategies, including technical analysis, fundamental analysis, and sentiment analysis. Traders use charts, indicators, economic data, news releases, and other tools to make informed trading decisions.

Forex trading offers opportunities for both short-term speculation and long-term investment. Traders can participate directly through forex brokers or indirectly through financial derivatives such as forex futures contracts, options, and contracts for difference (CFDs).

It is important to note that forex trading carries risks, including the potential for significant losses, due to the inherent volatility and leverage involved. 

Traders should acquire: 1.) A solid understanding of the forex or financial market(s), 2.) Develop an effective trading strategy, and 3.) Exercise proper risk management techniques before engaging in trading any asset.

SECTION 2: Currency Pairs / Currency Exchange

A currency pair, also known as a forex pair or currency exchange pair, is a quote of the relative value of one currency against another in the foreign exchange (forex) market. It represents the exchange rate between two currencies and is used to facilitate currency trading.

Currency pairs are typically denoted by a three-letter code, with the first two letters representing the base currency and the last letter representing the quote currency. The base currency is the currency you are buying or selling, and the quote currency is the currency you are using to compare it to.

For example, in the currency pair EUR/USD, the euro (EUR) is the base currency, and the US dollar (USD) is the quote currency. This pair represents the exchange rate of how many US dollars are needed to purchase one euro.

Currency pairs are quoted, or listed, into two price categories: the bid price and the ask price. The bid price is the price at which the market is willing to buy the base currency in exchange for the quote currency. The ask price is the price at which the market is willing to sell the base currency in exchange for the quote currency. The difference between the bid and ask prices is known as the spread.

Currency pairs can be categorized into three main types:

Major Pairs: Major currency pairs are the most actively traded and widely recognized pairs in the forex market. They involve the US dollar and a currency from a major global economy. Examples include EUR/USD, GBP/USD, USD/JPY, USD/CHF, and USD/CAD.

Minor or Cross Pairs: Minor currency pairs, also known as cross pairs, do not involve the US dollar. They consist of two major currencies from economies other than the United States. Examples include EUR/GBP, GBP/JPY, AUD/CAD, and NZD/JPY.

Exotic Pairs: Exotic currency pairs involve one major currency and one currency from an emerging or less frequently traded economy. They typically have lower liquidity and higher spreads compared to major and minor pairs. Examples include USD/ZAR, USD/TRY, EUR/TRY, and GBP/MXN.

Currency pairs are traded in the forex market which operates globally, around the clock. Traders and investors engage in currency exchange to speculate on exchange rate movements, hedge against currency risk, facilitate international trade, or engage in carry trades to take advantage of interest rate differentials between currencies. 

Understanding currency pairs and their dynamics is crucial for participants in the forex market to make informed trading decisions and manage currency-related exposures.

SECTION 3: Cryptocurrency