Classical analysis

Classical analysis comprises several items which help us analyze the market, i will enumerate them, then i will start clarifying each separately:

1- Support & Resistance.        2- Trend lines.        3- Moving averages.        4- Fibonacci levels.        5- Indicators.

<<Support & Resistance>>

Before we know what is meant by support/resistance levels, we have to know how does the price form the tops and bottoms through its movement, as those which form support & resistance points, or lines or areas which are of great value in forex.

Definition of top

It is a candle which mediates 2 candles on each side provided that their price do not exceed the middle candle price / do not reach its high.

Definition of bottom

It is a candle which mediates 2 candles on each side provided that their price do not exceed the middle candle price / do not reach its low.

The following charts will clarify what i mean

From the previous bottoms and tops support and resistance lines are formed respectively.

How can we benefit from the support/resistance lines?

The price respects support/resistance lines as it closes to them, so if we detected an old support on our chart, and the price at the moment is moving towards it, we will wait until it tests it or just touch it, then we will enter with the direction of trend, the same happens with resistance but on the opposite side, let's see together:

N.B:- when the support line is broken it turns to resistance, and vice versa.

Types of analysis

   OK, after we have learned how to put our feet on the first step of the stairs, we have to know when to buy and when to sell, actually this is the base on which all types of analyzing the market are based on, because if you knew the proper points of buy/sell you will make profit, that's easy.

Main techniques of a analysis

(1) Classical analysis             (2) Fundamental analysis             (3) Wave analysis

   We will give a short note about each method just to be oriented to the following information;

(1) It is the most used one, and among the most successful and easy methods too, it is concerned with using support & resistance points, trend lines, Fibonacci, price channels moving averages, indicators...etc (we will know each later on)

(2) It is the method which giant traders use, also big companies, institutions and banks depend on it, it is concerned with the economic news revealed by important people or in newsletters.

(3) It is a special type of analysis based on specific patterns which are known to be repeated in the market, they were first recognized by the great sir Ralf Nelson Elliott in 1930's & it depends on what happened in the past, and thought it will be repeated in the future.

N.B:- You can use either of the previous methods, or use a combination or even use them all, it is up to you, this depends on the trader's ability to understand each method and deal with it well, sure if you are perfect in 2 it will be better, because your image (view of the market) will be larger.     

In the next lesson we will start to explain the public classical analysis and how we benefit from it, now waiting to hear any questions..

Regards.

How to start?

   Before saying anything about the market analysis (taking the decision to buy/sell) you have to download the software which you will work on later through your learning course.

It was possible for me to upload some E-books to you teaching you the trading skills,

but i preferred to begin from the virtual life, i.e open a demo account and start trading

on it as a live trading without spending a cent, let's know together what is demo account?!

Demo account

It is a feature offered by almost all brokers dealing with forex to open an account typical

to the live real account to trade on it and open positions exactly like what happens in reality, but here your money is still in your pocket, so you don't risk any money in it, it is a wonderful choice for everyone to test his trading ability and evaluate himself, even those big traders use demo accounts every now and then to check something in their trading skills, or test a new trading strategy for example.

So, from where can i download the trading platform in order to be able to trade (on demo) and begin my journey? Simply from any official broker website, it is free, there are many types of platforms each with own characteristics, but the most common one used in the forex till now is --metatrader 4-- it is simple and easy to deal with.

I have uploaded some editions of MT4 of the best brokers in the market you can chose any and download, it will not differ at this step as it is not a real account:

Al trade *** FXDD *** FXsolutions *** SIGtrader *** Roboforex

also, i have chosen to you a wonderful video explaining the basic mechanism of action of metatrader platform, it will make it 
easier to you to know the tools used in metatrader 


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What is forex?

What is forex?

    It is an abbreviation for "foreign exchange market" simply; it is a market like any other market but here you can buy and sell money pairs, this is the goods!

So, if you have commercial passion this is surely your field.


Important terms
    First of all you have to be patient and gather the necessary information before you walk any step in the road, so i will reveal some terms used in the forex & stocks market which will be heard thousands of times through the learning period:
(1) Broker
It is a company specialized in online business and has many directors working through it, it simplifies your deal with the market, so you do not have to be in New York to open a trade on EUR/USD pair for example, rather than you are able to open this trade through their trading software at your home on your computer/laptop by 1 click only in less than 10 seconds by this easiness!
(2) Leverage
This is the system used in forex & it implies opening a trade with a quantity of money multiplied 100 to 500 times than the original money in your portfolio,
not clear ha? let's simplify it: say for ex you have bought 10$ of USD/JPY pair @ market price 82.30 aiming to gain 10 pips of profit so you will close this trade @ market price 82.40
when you select to open this trade you will enter the market with 1000$ not just 10$, although you didn't spend cent more than the previous 10$, this what makes forex very profitable than any other type of trading.
(3) Spread
This is the benefit of the broker from you, for ex when you aim to get 10 pips of profit, & each pip= 1$, the broker takes 2 pips from you (the spread is different among different brokers & different money pairs) this means they took 2$ from you so you earned 8$ only.
They resemble money exchange places, this is their benefit only.
(4) Trend
when the market is taking one direction for a specific period of time, this is called "trend"
so you now realize there is up-trend, down-trend, and flat-trend, also there is long-term trend, intermediate-trend and short-term trend according to direction and duration successively.
(5) Bulls
when the market is moving in up trend it is called "bull" market metonymy of their nature and their violent horns.
(6) Bears   
when the market is moving in down trend it is called "bear" market metonymy of their nature and heavy weight.


N.B:- Now you got a hence about forex and how it works, when i remeber more terms i will update this post in the blog, ready to hear any questions from all.
Cheers!

Brief Introduction

Who am I??

   This is Mohamed Badr from Egypt, a medical student and admired with forex.

Why I am creating this blog?

   I would like to transfer what i learned to as much as possible people like me, as if you became capable of forex, you will make a sum of money qualifying you to enhance your social status, and your entire life.

Introduction

   Well, did you surf the internet for making money before? Do you hear about people saying that they make a regular monthly extra income in addition to their salary, do you believe them, or just you have passed the subject? I have entered the field of profiting from the net from 3 years ago, and i tried nearly all the methods available to get reliable profit while i am sitting in front of my computer, i traveled through PTC, PTP sites, HYIPs, and affiliate programs, then i have settled on trading forex, i was really admired with its idea as i am adventurous naturally, so i decided to learn all and every thing about forex, and how does it work, now i am working in forex for 2 years and i still consider myself a learner as i am learning new things everyday.