Good students ask questions where they are lost. So feel free to ask question(s) using the comments box.

Opening a Demo Account.

Learning forex trading online entails one been taught all that one needs to know about forex trading. That’s why forex trading school is taking the pains, going the extra miles to bring the practical steps here.

For years I have used the free and highly acclaimed Meta Trader 4 forex trading platform/charting software, in my opinion it is as good, if not better than most forex charting packages that charge over $100 a month. We are about to setup and install Meta

Trader 4 forex trading platform/charting software on your computer with a free demo account for you to start trading with. There are hundreds of forex brokers who use Meta Trader 4, but I have found some that meet all my requirements and have always been honest and professional being alpari uk, interbankfx e.t.c Do your own due diligence as taught you in the introductory class before settling for one.

Open your web browser and head over to http://www.alpari.co.uk/en/trading_platforms/metatrader4/mt4_pc.html   or click on this Alpari

And click on save File in the dialogue box that will come up and allow it to download.

After download .it’s time to install

Steps

Install your MT4_set_up and click on Finish and wait for something of this nature to come up

Fig. 1 fill1

1) Fill in all the details with leverage as 1:100, Account Type as USD or otherwise and Deposit should be your intended starting capital i.e. if you intend to start trading live with $1000 then your Deposit should be $1000

2) Select yes I agree with the terms of this license agreement

3)     Click on Next

4) Click on Next again

5)     Allow it to generate your details, Copy your login details to a safe place and click on Finish. There you can Click on the maximize button on EURUSD and your forex trading platform/charting software updates automatically as shown on the fig below more often with a message sent to you with details of your login .

Fig2 fill4

Do you like what you are seeing? Looks a bit rough, isn’t it?

Place your mouse anywhere on your forex trading platform and click on grid. Looks beautiful now, isn’t it?

What do we do with that red tiny line on your forex trading platform? Place your mouse pointer, making sure that the pointer is just in touch with the red line and right click on it; and then Click on delete indicator. You are there.

Do you notice any movement at your extreme right? Oh well! That’s the current exchange rate of whatever pairs on your forex trading platform/charting software

Cheers mate; you’ve successfully created your demo account.

Did I tell ya what Demo account is? Hell yes. For the love of Mike let me freshen you up again. Well it is a practicing account. The money there is not real, it’s virtual. You can’t withdraw if you make profit neither will your account run dry when you run at a loss. Interesting uh?

TWEAKING YOUR FOREX TRADING PLATFORM/CHARTING SOFTWARE

Types of Chart

Do you notice those tiny inverted rectangles (black & white) on your forex trading platform/charting software? Now those are called CANDLESTICKS. You can change it to a LINECHART by clicking on the icon indicated by a thick RED SQUARE as shown on the fig below

Fig3 linechart

Do the same to change to BARCHART as shown on the fig below

Fig4 barchar

Great! We are getting somewhere, aren’t we?

Time Frames

There are different time frames that suit individuals differently depending on how much time an individual has to spare daily.

M1: stands for one minute.

M5: stands for five minute.

H1: one hour.

D1: one day.

I guess you can figure out the remaining.

So far, so good!

If you decide to trade M15 time frame with candlesticks, it is expected that after every 15 minutes a new candlestick will form. And if you trade M30 time frame then a new candle will form after every 30 minutes. For D1, a new candle forms after one day.

You can choose your time frame by clicking on a particular time frame that suits you. Voila!

Loading different Currency Pair unto your Forex Trading platform

On the fig below notice the area marked out with red. There you see different currency pairs uh?

To load and trade any particular currency pair just

1)     Place your mouse pointer on the currency pair

2)     Right click on it

3)     Click on Chart Window and allow it to load. Simple isn’t it?

Fig 5 pairs

Placing Order

Placing order (buying/selling) is easy. Yes for now you ain’t got forex trading system yet but I need you to just have a feel of placing an order.

Click on the New Order button marked with red as shown on the fig below.

You would notice a SELL (short) button in red and a Buy (long) in blue.

Fig6

Click on sell (short) or buy (long).You would notice that the figure there, is reading in negative/positive, never mind we shall deal with that when we come to analysis in our subsequent class but just know that if your figures are NEGATIVE, it means only one thing, you are losing; don’t get discouraged we shall get rid of that shortly. If POSITIVE,   you are running in profit don’t shout for joy yet because you don’t even know how to trade profitably yet.

You also noticed things like:

VOLUME: On your forex trading platform when you click on the New Order button, there you see volume. Volume is the contract size we discussed in our introductory class. Increase it to 1.0 and place a new order again. If you get a response saying “not enough money” it then means you’ve got to reduce your contract size. Go ahead reduce it.

TYPE, STOP LOSS,TAKE PROFIT?

Type by default is Instant execution which is the type that we are dealing with now. But click on the down arrow, what do you see? PENDING ORDER?

Pending Order

A Pending order is an instruction to open a position when the current price reaches the order level. In other word, it is an instruction to buy/sell when the quote price gets to a particular quote price. For instance USDJPY might be at 90.12 and you would want to buy this market at 91.05, chances are that you might not be on your system when the price gets to that level and all you would need to do so as not to miss out is to place a pending order so that with or without you been there your orders will be taken.
There are four types of pending orders:

Buy Stop Order

A buy Stop Order is an order to buy a currency pair (e.g. EURUSD) at a price above the current market price.

Suppose the current market price of EURUSD is 1.3600 you then place a buy Stop Order on @ 1.3652. If the price rises to 1.3652 at that time, your order would become a Market Order to buy and your order would be filled.

Sell Stop Order

A Sell Stop Order is an order to sell a currency pair (e.g. EURUSD) at a price below the current market price.

Suppose the current market price of EURUSD is 1.3600 you then place a Sell Stop Order on @ 1.3452. If the  price drops to 1.3452 At that time, your order would become a Market Order to sell and your order would be filled at the next best available price.

Buy Limit Order

A Buy Limit Order is an order to buy a currency pair (e.g. AUDUSD at a designated price or at a price that is below the current market price.

Suppose the current market price of AUDUSD is 0.8326 you then place a buy limit Order on AUDUSD @ 0.8293 If the  price drops to 0.8293  At that time, your order would become a Market Order to buy and your order would be filled at the next best available price.

Sell Limit -.

Sell Limit Order Is an order to sell a currency pair (e.g. EURJPY) at a price higher than the price at the moment of placing the order or at a price above the current market price.

Suppose the current market price of EURJPY is 130.75 you then place a sell limit Order on EURJPY @ 136.03 If the price rises to 136.03  At that time, your order would become a Market Order to sell and your order would be filled..

Stop-loss
A stop-loss is designed to limit a trader’s loss on a security position. Setting a stop-loss order for 10% below the price at which you bought the stock will limit your loss to 10%. For example, let’s say you just purchased Microsoft (Nasdaq:MSFT) at $20 per share. Right after buying the stock you enter a stop-loss order for $18. This means that if the stock falls below $18, your shares will then be sold at the prevailing market price.

There are no hard and fast rules for the level at which stops should be placed. This totally depends on your individual investing style: an active trader might use 5% while a long-term investor might choose 15% or more.

Take Profit

As the name suggests, take-profit orders are used to lock in profits in the event the rate moves in a favorable direction. For example, if you are buying a currency pair position and believe the price will rise to a certain level, but are unsure what it will do beyond that level, placing a take-profit order at that point will automatically close out your position allowing you to lock in profit.   Example: Buy USDJPY at 90.14 and taking profit at 92.10 or selling USDJPY at 92.10 and taking profit at 90.14.

Closing Order

To close orders: right click on the negative or positive digits that is above the line where balance, equity, Margin and free margin are as shown below in fig 7. If you are not seeing it then click on Trade on the far side as shown in fig 6 then click on close order and click on close order again. Voila!

Fig7 close trade

Fig8 close order2

Interesting uh? Do you notice that your trade is running at a loss or running in profit? Do you know why? If you don’t let’s move on to the Analysis class just so you know why.