LEARN TRADING FOREX
WITH FAYE ARMSTRONG
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Welcome to our trading community!
We’re thrilled to have you here as you begin your journey into the exciting world of trading. Whether you're just starting out or exploring new opportunities, this platform is designed to support you every step of the way.
Trading can be both rewarding and challenging—but with the right tools, knowledge, and guidance, you’ll be empowered to make informed decisions and grow with confidence. Here, you'll find beginner-friendly resources, practical tips, and a supportive environment to help you build a strong foundation.
What is Forex Trading?
Forex trading is the activity of buying and selling foreign currencies with the aim of making a profit from changes in exchange rates. In English, it's known as foreign exchange trading or simply forex trading.
Brief Explanation:
Brief Explanation:
The foreign exchange market (forex) is the largest financial market in the world, with daily trading volumes reaching trillions of dollars.
Forex traders buy one currency and sell another at the same time, usually in the form of currency pairs (e.g., EUR/USD).
The goal is to profit from exchange rate fluctuations. For example, if you buy EUR/USD at a low price and sell it when the price increases, you earn a profit.
Simple Example:
Simple Example:
If you buy EUR/USD at 1.1000 and sell it at 1.1050, you make a profit of 50 pips (the unit used to measure price movement in forex).
Characteristics of Forex Trading:
Characteristics of Forex Trading:
High liquidity (easy to enter and exit trades)
Open 24 hours a day, 5 days a week
High leverage (you can trade with small capital, but it comes with high risk)
Volatility creates opportunities for profit—but also involves risk of loss
In forex trading you must be able to identify the chart patterns that are being formed when trading.
Here are some examples of chart patterns that you should know.
1. Bullish Flag Pattern
1. Bullish Flag Pattern
Description:
The bullish flag is a continuation pattern that forms after a strong upward price movement (the "flagpole"), followed by a short period of consolidation with a slight downward or sideways trend (the "flag").
What it means:
This pattern signals that the price is likely to continue moving up after the consolidation phase is over.
2. Ascending Triangle
2. Ascending Triangle
Description:
This pattern is formed by a flat resistance line at the top and a rising support line at the bottom. The price keeps testing the resistance level, creating higher lows each time.
What it means:
It indicates buyers are becoming more aggressive, and a breakout above the resistance line usually leads to a strong upward move.
3. Cup and Handle
3. Cup and Handle
Description:
This pattern looks like a tea cup. The price gradually forms a rounded "cup" shape, followed by a smaller consolidation that looks like a "handle."
What it means:
It suggests a bullish continuation. Once the price breaks above the resistance formed by the rim of the cup, an upward trend is expected.
4. Double Bottom
4. Double Bottom
Description:
The price falls to a low, bounces, falls again to roughly the same level, and then rises. This creates a "W"-shaped pattern.
What it means:
This is a reversal pattern indicating the end of a downtrend and the potential start of a new bullish trend.
5. Bearish Flag Pattern
5. Bearish Flag Pattern
Description:
The bearish flag forms after a strong downward move (flagpole), followed by a short upward or sideways consolidation (the flag).
What it means:
This pattern signals that the price is likely to continue falling once the consolidation ends.
6. Descending Triangle
6. Descending Triangle
Description:
Formed by a flat support line at the bottom and a descending resistance line at the top. The price keeps making lower highs.
What it means:
This indicates increasing selling pressure, and once the support breaks, the price often moves sharply downward.
7. Head and Shoulders
7. Head and Shoulders
Description:
This pattern consists of three peaks: a higher peak (the head) between two lower peaks (the shoulders). The "neckline" connects the lows between them.
What it means:
Breaking below the neckline signals a bearish reversal, often followed by a strong downward move.
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