English Forex Course

What you’ll learn:

This is a beginners course on the Forex Market. It is intended to help the curious investor get a better look at what is involved in trading for themselves. Not everyone is cut out for trading Forex and this is designed to help people make an informed decision.

The course covers the basics of the market and what skills and tools are required to trade actively.

It is completely free and available to anyone with an interest in knowing more about Forex.

Welcome to our  beginner’s guide of Forex tutorials. Forex Market is one of the most liked and appreciated trading market around the world, and as the name indicates its a foreign currency exchange market, In these sections you will find the most important knowledge about Technical Analysis and MT4 (Meta tarder 4) platform.

Entering the Camp

Chapter 1

An introduction to ForexCamping

Remember Indiana Jones, Lara Croft, Kit from Talespin, we all grew up watching some amazing fictional characters who were adventurous,  I’m sure you remember. There is something common in all of them, their great desire for adventure and amazing curiosity which led them towards the path of becoming the Treasure hunters they eventually turned out to be. They enticed us with their adventures and the glory. We grew up reveling them, admiring their dare-bare adventure and at last dreaming about them.


They moved around in Ferrari’s, travelled in Zeppellins long before Aeroplanes, visited the most exquisite places and lived in palatial mansions. Enticing, isn’t it? Who wouldn’t want a life like that? Opulent, Grand and anything spectacular that you can think of.


We all liked them because we all can relate to them in some or the other way, some part of us always was and would always be attached to those stories, to those characters because somewhere deep down inside, we all wanted to be like them,  we all have a hidden Treasure hunter inside us. We all have that desire to hit the jackpot, take up challenges and travel in those lonely Jungles of mystery.


Well, these were the thoughts which I had that night, I just couldn’t sleep, something was bothering me, the treasure hunter inside me wanted to come out, my desires shouted,  I wanted my mansion, I wanted my red shining Ferrari, I wanted to hunt the treasure, and I wanted my adventurous life, I can’t do this 9 to 6 Job any more, and hence I started looking for my Guru, my Teacher who can show me the path, show me the way towards my boulevard of shining dreams and guess what… I found one!


He turned out to be my Yoda, my Dumbledore or in short, my Mentor who guided me on the path towards the treasure. His influence on my life was mesmerizing for he helped me crack the greatest mystery of all. How to track the treasure in the big bad dangerous forest, or as we will come to know of it, the Forex Market.


This is my story (an average Joe), Mr. Pippino (My Guru) and my days which I spent in Forex Camp.


Mr. Pippino made three simple basic principles for the camp:
a)     Time
b)     Practice
c)     Patience


Mr. Pippino, the wisest man I’ve seen, told me very clearly from day one: “If you want to hunt, you have to wait for the right opportunity”. Just like a prowling tiger, he hides in the bush, waits and pounces as soon as he gets best opportunity. A hunter too, needs to be as cunning as the king of the jungle.


You have to learn to read and decipher maps, to calculate at the blink of an eye, so that when you dig in, it will be profit and nothing else, and for that you have to practice, practice more and practice even further with Technical Analysis. Forex is a game of numbers, the faster you calculate, the more the chances of a haul (Profit).

Chapter 2

Forex : A brief



In this camp you will learn what treasures to hunt on Forex Market, when is the best time for it and most importantly, how to hunt in the best manner. It’s a brief summary of your objectives; you always have to keep that in mind.


Let’s give you a small idea as to what the Forex Market is!


Imagine you live in Paris, in front of the ever amazing Eiffel Tower. Your wallet is stacked with Euros and you think “Gosh, I am bored with all of this, let’s travel to Hollywood, USA for some fun and pleasure!! So, what’s the first thing that you do?


You need Dollars (yeah the green things which smell super awesome 🙂

Try and understand this very carefully. This concept right here is the “Holy Grail” of Forex treasure hunters. Don’t worry; it’s insanely easy to understand! 
You have 1000 Euros in your wallet.


At the current exchange rate, you will be USD 1.5 for every Euro 1 that you have. Please concentrate here and try to understand.


1 Euro = 1.5 USD (today)
100 Euro = 150 USD (today)
1000 Euro = 1500 USD (today)


So, when you left, you had a total of 1500 USD’s with you. (Equivalent to 1000 Euro’s)


You enjoyed your stay in USA, had a great time and finally decided to go back, and just about then, you have your first brush with the Forex jungle. 


You read in newspapers that the Euro economy is going down (You thought “Maybe that’s good, probably I will get a good exchange rate when I go back to Paris!!!)


When an economy goes down, the international exchange price of its currency goes down as well. So, compared to the previous exchange rate, right now the value of Euro is lesser. Thus, for every Euro, you will get a lesser amount of US dollars.


You have already spent $ 1000 during your stay in the US. You are left with $500 only.


So, when you come back, you find that:


1 Euro is down to 1.2 USD


Based on previous rates (1 Euro = 1.5 USD), you should have got:


500 / 1.5 = Euro 333.33


However, now since the value of Euro has gone down, you are getting:


500 / 1.2 = Euro 416.67


Thus, since the value of Euro fell, you actually earned / saved:


416.67 – 333.33 = Euro 83.84


So, in retrospect, you actually earned a small treasure just by the virtue of fluctuations in exchange rate and now you are forced to think, “Isn’t it great that I can earn money just by sheer exchange “


Exactly, it is a great opportunity, a lot of treasure is waiting for you but you need to learn how to hunt.


Getting ready:


So Hunters, let’s get our bags ready before we go hunting!

“Remember, whatever the jungle is, it’s always survival of the fittest. So we need to pack our bags with as much ammo and equipment, as possible”, as always repeated by Mr. Pippino.


First, you need to introduce yourselves with the day to day gear that you will come across and also, have to use sometimes, in order to tow up the treasure.

So, let’s start our adventurous trip through the Forex Market! 

Chapter 3

A broader view on Forex

Forex: What does it mean?


Simply put, Forex Market is the market where international currencies are traded against one another. So whenever we participate in this exchange, we participate in the market. In other words, Forex trading is simultaneous sale and purchase of the currency as well as the exchange of one country’s currency for another country’s currency. Since the world currencies do not have a fixed exchange rate, they are always fluctuating, thus they are traded in the currency pairs like Euro/Yen, Dollar/Euro and others.


Forex is the biggest jungle that you will ever come across. Brace yourselves; this market is worth of $1,5 trillion daily!! That’s 3 times more than the total amount of the futures and stocks markets together.


What are the Forex Market Participants? 


Forex market incorporates different participants and the most important of them are:


  • Central Banks
  • Commercial Banks
  • International Trade Companies
  • Forex Brokerage Companies (Forex Brokers like ECN, STP brokers, dealing centres)
  • Institutional Investors (i.e. Hedge Funds, Investment Companies etc)
  • Common Retail Traders
  • Insurance companies


What are the most common treasures (currency pairs) of the world? 


There are lots of official currencies of different countries that are being traded on Forex, but only few of them are traded actively. In currency trading, only the most economically or politically stable and liquid currencies are in highest demand.


US Dollar (USD), Euro (EUR), Japanese Yen (JPY), Swiss Franc (CHF), Canadian dollar (CAD), New Zealand dollar (NZD), Australian dollar (AUD) and British Pound (GBP) are the ones which are traded the maximum, hence they are considered the greatest assets. You should also know, that these currencies, collectively, constitute more than 80% of all the trades throughout the world.



How will you identify the treasure?


I guess right now you are asking yourself, how to identify which currency pair stands for what?

Ah, it’s easy! Just remember the three letter rule.

The first two state the country while the third letter identifies the name of the currency. Take GBP for instance.  GB stands for Great Britain while P stands for Pound. It’s that simple.



Do we always have to trade the currencies in pairs?


It’s time to open a secret… The Forex Jungle is an unforgiving place; we need to have the best ammunition in order to survive. From now onwards, the Currency Pair is going to be our strongest ammunition. In this jungle, the currencies are always traded in pairs i.e.: you buy one currency pair against the other and vice-versa; you sell one currency pair against the other as well!“


A broker facilitates us in this trade by arranging the meetings between us and the buyer/seller and in return, we pay him a small commission.



What is the one treasure that everyone is running after?


ForexCamper, always keep an eye at the US Dollar! Whenever you have USD as one of the currencies in the currency pair, it is known as a Major. They are the most widely traded currency pairs in the world and hence the name, Majors!


The Dollar is the greatest treasure in the world!


I am sure you are eager to know what made the dollar the most important currency in the world.


Well, it’s simple! Aided by the robust economy of the United States, it is virtually the king amongst currencies. The Dollar is on one side of majority of all transactions. Majors comprise almost 80% of all trades. The Dollar is the medium for the majority of cross border transactions.



We have Majors, so do we have minors too?


Now you know what a major is and must be pondering as to whether there is a minor? Guess what, you are absolutely right!


Minors are simply the currency pairs, without the USD on either side. They are sometimes also referred to as Crosses but more simply as minors. The three major non-USD currencies are: EUR, JPY, and GBP mainly make up the minor pairs.



Exotic Pairs


Wandered off to tropical beaches, bright sunshine, fruit platters? Bad news, you still get to stay in the jungle. Don’t worry; a treasure hunter’s life would definitely take you there.


Brazil ticks all the above boxes, doesn’t it? That’s what an exotic pair is, pretty much.


An exotic pair is a currency pair with the currency of an emerging economy, such as Hungary, Mexico, or Brazil.



Where is the Forex treasure buried?


Forex market does not have a physical location or a central exchange office like other financial markets. That’s the best part about it.


“Why?” – You ask. It’s because the entire market is run electronically, within a network of banks, continuously over a 24-hour period. This means that the Forex market is spread all over the globe with no central location whatsoever. Cool, isn’t it?


So, you can wander throughout the forest but nowhere will you mind the X-Mark. X marks the treasure, well, it’s a little different in this hunt, though.



There are so many forests in the world. What’s so special about Forex jungle?


  • It’s a 24 hour market with no limitations for business hours and allows you to trade immediately based on the instantaneous news you receive.
  • The volume of currency exchange is 100 times more than the volume in equity market.
  • It’s a $1.5 trillion market per day which cannot be matched by market whatsoever. None comes even close.
  • In Forex market, a lion’s share of the sites allows you to trade without any commissions or fees. None at all!
  • Extremely simplistic and easy price quotes.
  • A much higher leverage offered, compared to stock exchange, hence greater choice for the traders.
  • Higher profit potential as Forex market allows you to trade even when the market is going down.


Folks, you may choose to use a compass while another might employ GPS. You all have your own ideas, neither is wrong. The important thing is that you should know how to locate the treasure and become insanely rich.

Learning the Tools

Chapter 4

Different types of markets

Right now we’ll talk about various types of markets to let you better understand what you are going to deal with. They all have a wealth of their own along with the pros and cons. Let me brief them for you.


1. Spot Markets 


Spot Market or so-called “Cash Market” is a public financial market, in which financial instruments or commodities are traded for immediate delivery using the current market price. Here the settlement happens during 2 business days i.e. the cash and commodity must be delivered in two working days after the trade execution. Unlike in the spot market,  in the futures market, the delivery is due at a later date. Spot market is simple, liquid and has a tight spread.
Let’s bring an example over here. Imagine you are going to purchase the shares of some XYZ Company and own them immediately. For that need to go to the spot market on which the shares are traded (like London Stock Exchange). For buying any other item on the cash market, you need to go to a dealer and exchange cash for it.
The Forex Market is one of the biggest spot markets in the world where the companies and individuals exchange one currency for another all around the Globe.
2. Derivatives Markets  
Derivative markets are investment markets which involve the selling and buying of some certain set of financial instruments or securities.  The price for these instruments depends on the value of another financial instrument which is called an underlying asset or underlyier. Simply put the derivative is a contract between two or more parties, the value of which is dependant on fluctuations in the underlyer.
The most common types of derivatives are the following: 
  • Futures Markets
  • Options Markets
  • Contract For Difference (CFD) Markets



In this market, participants buy and sell commodity/future contracts for delivery on a specified date in the near future. Since they are traded through a centralized exchange, the contracts are standardized, transparent and well-regulated. Futures contract can protect producers and suppliers from price changes as the price and the amount of order are fixed at the time of the agreement.
The most common futures, used in our daily lives, are futures for: oil , gold, currencies, steel, cotton, wood.
For example: the XYZ Company is jewelry producer and every month it purchases the certain amount of gold. Let’s imagine, the price for 1 gram of gold is 100$. In case the price goes up, the net cost of the jewelry set will increase and the Company might get less profit. To avoid price volatility the Company may sign a futures contract with Investor where the price and amount of commodity will be fixed. So if the price of gold goes above 100$, the Investor pays the extra money and XYZ Company gets gold at predictable 100$. But if the price goes below 100$, XYZ Company still pays 100$ and the Investor collects the profit. Therefore, by locking the price of gold, the futures contract allows the Company to transfer its’ potential risks and rewards on investor. 



The Option is another type of contract which provides the buyer (the holder) with the right (but does not oblige him) to buy or sell an underlying asset or instrument at a particular price on a specified date or before it.
Options allow you to speculate on a currency pair beforehand, keeping in mind the safety of the maximum loss that you can withstand. They can be traded on an exchange (such as the International Securities Exchange, Chicago Mercantile Exchange, or the Philadelphia Stock Exchange), or over the counter (OTC) on many Forex brokers platforms.
A simple example: 
The company A wants to buy the company B for 500 000 $. Unfortunately the A company won’t have the full amount of money for the next 2 month, thus the companies negotiate and the owners of Company B agree to sell it to A for 500 000 $  in 2 month, but for this option B should pay 10 000 $. 
If in 2 month the market share of the B Company goes up to 700 000$, the buyer will make a profit of 700 000 – 500 000 – 10 000 = 190 000 $. 
In case the value of the B Company decreases, the buyer may cancel the plans of purchasing it. Since the A Company bought an Option, it’s under no obligation to go through with the sale. But of course it will lose 10 000 $, spent on Option. 

The sad part is that Options have limited market hours and the liquidity is much lesser than what the Forex market offers.


Contract For Difference (CFD) Markets 

CFD is a contract between the “buyers” and “sellers“, according to which the seller has to pay to the buyer the difference between the value of an asset at the time of the agreement and it’s current value. In case this difference is negative, the buyer becomes the one who has to pay to seller. By trading CFDs the investors get all the benefits and risks of owning an underlying asset without actually owning it. The Stocks, Bonds, Commodities, Interest rates and Currencies can act as underlying assets.
For example, a if trader enters a short CFD trade when the S&P 500 index is at £1,800 and closes the order when it is at £1,850, he will receive the profit of £50 from the trader who placed the opposite order (long trade). 
There are certain advantages of trading CFDs, like the ability to earn both the growing and falling market, wide range of available markets and instruments, high leverages, low commissions, saving on transaction costs due to the absence of physical delivery of the underlying asset, etc.
3. Exchange-traded funds
Sounds too difficult? Not really! It’s basically an investment fund which is traded on the stock exchange. They are novices in the Forex world and may contain Indexes, currencies, mixture of assets also called as basket of assets, thus allowing the trader a range of different options.
Exchange-traded funds are the securities which are meant to behave the same way as a specific index or number of different securities. This means that the ETF will copy or repeat the movement of the securities it is created to follow.
As far as ETFs are traded like stocks, there should be a parameter which tracks the value of the Stock (ETF in this case) and this parameter is called as NAV (Net Asset Value). As the name suggests NAV is a total price of the Assets in ETF per share; this is how NAV is calculated, but of course ETFs are traded above or below the NAV value hence creating the momentum in the market.
But it’s very easy to misunderstand and mix ETFs with Mutual Funds as both look alike on the principle that both of them are basically a bundle or Baskets of different assets. That’s why here we have outlined the principle differences between them:
ETF Mutual Fund
Trade in complete Trading day Trade only at closing NAV
No Minimum Barrier for investments Mostly have investment barriers
Low operating expenses Operating expenses vary
Tax – efficient Comparatively less efficient in terms of saving taxes
There are different types of Exchange Traded Funds which can be classified as: commodity ETFs, currency ETFs, ETFs by economic sectors, ETFs of developing and developed countries, ETFs by industry sectors, bond ETFs and many others.

Chapter 5

Different sessions of trading

Different sessions of trading


We all know the importance of perfect timing, Forex treasure hunters. After the lesson we are following up, you will understand that unless dug at the perfect time, even the best treasure excavation may go wrong. 


It all depends on the Timing!

Forex market is one of the most attractive financial markets in the world as it runs 24 hours a day 5 days a week which opens huge trading possibilities for investors, allowing them to place orders all the day long and even at nights. Nevertheless, there are particular hours when the price action is the strongest or weakest. Furthermore, volatility of different currency pairs varies during the trading day, that’s why the result of your trading may greatly depend on the time when you trade.


There are a few major sessions in the world when most of the activity happens. It is always best to keep a note of them and trade as per their timings. After all, you are not going to earn much when there isn’t any activity in the market.



Asian Session


  • The session starts at 00:00 a.m. GMT and finishes at 08:00 a.m. GMT.
  • Financial centres of the Asian session include: Tokyo, Singapore and Hong Kong
  • More than 20% of transactions take place during this time.
  • During Asian session the major news releases come from New Zealand, Japan, Australia and China thus the Asia-pacific pairs which include AUD, NZD and JPY are the most active.
  • Japanese Yen is the 3rd most traded currency, involved in about 16.5 % of all Forex transactions.


European Session


  • The session starts at 08:00 a.m. GMT and finishes at 05:00 p.m. GMT.
  • Financial centres of the European session include: Frankfurt, Zürich, Paris, London. London has always been considered as the Forex capital of the World.
  • Around 30% of the global transactions occur during the European session.
  • It clashes with both the Asian and the American session, thus it’s basically one of the most volatile trading sessions with high liquidity and lower pip spreads.
  • Due to the high volatility, you can practically trade any pair but it is best advised to stick with the majors.
  • During European session the major news releases come from Europe thus EUR, GBP and CHF are all the most actively used currencies.


American Session


  • The session starts at 01:00 p.m. GMT and finishes at 10:00 p.m. GMT.
  • Financial centres of the European session include: New York and Chicago.
  • During the initial hours, it overlaps with the European session, hence a big liquidity for that period.
  • The majority of economic news are published around the beginning of the American trading session as both London and New York sessions are open at this time.
  • Since the Dollar is on 85% of all transactions, it presents an ideal time to trade.
  • American session is considered to be the most aggressive in trading.


Pacific session


  • The session starts at 10:00 p.m. GMT and finishes at 06:00 a.m. GMT.
  • Financial centres of the Pacific session include: Wellington and Sydney.
  • Pacific session is one of the most quiet sessions for Forex trading.
  • Majority of traders focus on the currencies, like AUD, NZD, USD during these hours.



And now a few important tips on Forex trading sessions: 


  • It’s better not to leave the trades without attention during so-called “thin” market – the market with a low number of buyers and sellers. It occurs during the transition time between sessions when liquidity is not enough to keep prices stable, thus some strong movements are possible. A “thin” market has high price volatility and low liquidity.
  • During the official holidays the major banks, stock exchanges and companies withdraw funds for reporting periods. This is a long “thin” market, where you need to extremely cautious.
  • Quite often there is a gap between closing prices on Friday and opening prices on Monday, thus we recommend to protect your trades by placing stop-losses or closing the trades on Friday itself.
  • Even the perfect trading strategy may fall apart if you apply it at a wrong session. If the long-term or fundamental traders try to place an order during the most active hours, it may lead to a poor entry price or a missed entry. At the same time volatility is vital for the short-term traders who generally don’t hold their positions overnight.


And finally we came to the most interesting point! Do you want to know what is the best time for trading on Forex? Here you are:


The overlap between the London and the New-York sessions can be considered as one of the best times to trade considering the liquidity and the high currency pair combinations allowed. 


That’s pretty much it, fellow camper! Check out the next lesson to be one more step closer to your dream of becoming a Forex treasure hunter!

Chapter 6

Some important terminologies and definitions

Some important terminologies and definitions


Now comes the most interesting part of the camp!

In this chapter you will learn the most important terminologies and definitions which you need to know them like the lines on your palm if you intend to become a good, no, a great Forex treasure hunter!


Let’s get on with them, fellow campers.


  1. Order Types:


1) New order (Market order) is an order to buy or sell a certain currency pair at the current market price. The trade is executed instantly.


2) Pending order (Limit order) is an order to buy or sell a currency pair at a predetermined price in the future. This type of order is used to open a trade when certain conditions included in the original trade instructions are fulfilled. There are four types of pending orders:


  • Buy Limit – is a buy order which is executed at a same or lower price than the price of security at the moment of placing an order. The orders of this type are usually placed in case the trader expects that after dropping to a certain level the price will rise again.
  • Buy Stop – is a buy order which is executed at a same or higher price than the price of security at the moment of placing an order. This type of orders are usually placed in case the trader expects that the price will strengthen to the certain level and continue to grow.
  • Sell ​​Limit – is a sell order which is executed at a higher price than the price of security at the moment of placing an order. The orders of this type are usually placed in case the trader expects that after rising to a certain level the price will drop again.
  • Sell ​​Stop – is a sell order which is executed at a lower price than the price of security at the moment of placing an order. This type of orders are usually placed in case the trader expects that the price will decline to the certain level and continue to fall.


3) Stop Loss/Take Profit orders 




Stop Loss is  defensive mechanism you can use to help protect your trades against further losses in case the price moves against you. Stop Loss will automatically close the trade if the price reaches a certain predetermined level. For example, you are long on GBP/USD at 1.6595 and set a stop-loss at 1.6370 – thereby if the exchange rate falls to this level, the trade will automatically be closed, capping your losses.


Take Profit order is used to lock-in your profit and to exit the market at your pre-set profit objective. It means that  your trades will be closed automatically when a certain profit is achieved.



Let’s see how we can place the order. Click at New order in your terminal  and you will see the following icon:



4) Trailing Stop is an order which is rather similar to Stop loss. It’s also used to restrict the losses and avoid margin calls. The main concept under Trailing Stop following: as the market price moves in a favourable direction, the trigger price automatically follows the market price at a specified distance. For example you placed a long position and the market prices are moving up, in that case the trigger price will also move up accordingly, but in case the market prices are moving down, your trigger price will remain unchanged and vice versa.


This type of order helps an investor to set a limit for the maximum loss without limiting the possible profit. It also reduces the need to constantly monitor the market prices and sit in front of the computer the whole day.


  1. Swap


Whenever we are buying or selling a currency pair, keep in mind, we have to pay a swap charge. Swap is the interest rate which is deducted or added on account for holding a trade open overnight. A  swap charge is calculated on basis of the interest rates of the countries which are involved in each currency pair; it also depends on the type of order – long or short. Basically, we have to pay an interest for the currency that we are buying and we earn an interest for the currency we sell.


Depending upon their values, we either earn a swap or pay a swap. However, most of the brokers allow you to trade in a swap-free manner i.e.; you do not need to pay or earn any swap charge.


  1. Pips


It is the smallest unit of measurement which notifies the change in value of a currency pair. Thus if EUR/USD moves from 1.1234 to 1.1235, that is a change of 1 pip.


For the US Dollar related currencies a pip is 0.0001 or 1/100 of a cent. This value might seem to be extremely low, but keep in mind that most of the currencies are traded in lots of $100000, so for this amount the pip is $10.


  1. Lots 


A Lot is basically the minimal traded amount for each transaction. For the regular accounts one standard lot is equal to 100 000 units of the base currency, for mini accounts one Lot is 10 000 units and for micro accounts it’s equal to 1 000 units of the base currency.


For example, if you place a sell order of 1,5 lots on USD/GBP, it means that you opened a short position with the volume of $150 000. But don’t worry, fellow Camper, you don’t need to have so much money to open a trade. Here is exactly where the Leverage comes in middle!


  1. Leverage 


Leverage trading is one of the joys of Forex markets. Leverage is basically a tool, offered by a broker which allows you to trade with bigger amounts of securities, having smaller account balance. Forex brokers usually allow leverage ranging from 1:100 to 1:1000 even. Thus, if you deposit say a minimal amount of $10 and you have a leverage of 1:100, then you can open positions of total worth $1000. Profits and Losses are adjusted accordingly as well.


Sounds enticing, doesn’t it?


However, do bear in mind that as are the greater chances of profit due to the high leverage offered, similarly, whenever you have a loss; it will be a huge one as well, due to the same high leverage.


The same multiplication factor which increases your profit is the same one which increases your loss levels as well.


Therefore, always keep this factor in mind when you go in for trading using leverage.


  1. Spread 


The difference between the Bid (Buy) and the Ask (Sell) price is quoted as the spread.

Eg. : If the EUR/USD has a rate of 123.45/123.48, it would be stated only as 45/48  having a 3 pip spread.


  1. Equity


It stands for the secured part of the deposited balance, in consideration with the opened positions, combined with the Balance and the Floating Rate (Profit/Loss) using the given formula:


Equity = Balance + Floating Rate + Swap + Credit (If available)


  1. Free Margin


It is the money which is not required to secure the positions which have been opened.

Free Margin = Equity – Margin


  1. Margin Level


Margin Level is calculated by (Equity/Margin) * 100 %


  1. How do we earn by trading?


So, now is the time when you hang up your boots and remember the most basic rule in the forex industry i.e.; when to buy and when to sell!


Always remember, we always buy and sell in pairs.


Let’s take one of the most widely used pairs for an example.




Remember, the currency in the left side of the pair is the one which we consider for Buy / Sell.


Suppose, you have news in advance that the Dollar is going down, but the Euro is remaining constant. So the Dollar will lose compared to Euro.

Thus you BUY Euro with the expectation that their value will go up compared to the Dollar. Suppose, you buy them at say 1.234 today and sell them at 1.256 a couple of days later, you are making a profit.


Similarly, you have news that compared to Euro, the Dollar is going to rise owing to some political actions etc.


Then, you decide to SELL Euros in comparison to Dollar. Thus you are selling with the premonition that their value will go down in the near future. It is a kind of profit as well, since you are avoiding loss.


Think of it this way, treasure saved is treasure earned. So, whenever you avoid loss, it’s a profit too!

  1. Margin Trading


So, in the above example, when I explained that the price of EUR/USD would go up from 1.234 to 1.256, you must be wondering whether that profit is even noticeable. Exactly, it’s not much at all !


That’s why, in Forex, you need to Buy/Sell currency pair in lots. The Lot sizes are Micro (1000 units), Mini (10000 units) and Standard (100000 units). Remember these sizes.


Now, you are wondering about the ever pertinent common man i.e.; where will he get the money to buy say 10,000 Euros or Dollars for that matter.


Relax, that’s where Margin trading comes in handy!


Margin Trading is simply the process wherein you can trade with borrowed money. Thus you can partake in very large transactions using very little money of your own.


There are credible reports that the Yen is going to go down against the Australian Dollar.


You buy one Mini Lot (10,000) of AUD/JPY at 3% margin and wait for the news to come true.


You buy each at 1.123


So, basically you are buying currencies worth 1.123*10000 = $11230


However, the margin requirement was only 3%


Thus the required margin is only $ 336.9. This amount would be secured in your account from the rest of the balance


So, with just $336.9, you are controlling $11230. Feels good, isn’t it?


And then, the best thing in the world happens!! You earn money.


The rate rises to 1.165, thus the total amount you control now is 1.165*10000 = $ 11650


You earned $11650 – $11230 = $420.


Now you probably understand one of the greatest benefits of the Forex market, that with very little money, you can control a lot more amount and make huge profits.

Check out your smile on the mirror!


You were ransacking your attic and found a treasure map but you don’t understand a single thing. It’s full of symbols and graphics which make no sense to you. What do you do? Throw the map? Nah, that would be foolish. Sharing the map with someone who can read, presents the risk of losing the treasure to him.


Have no fear, ForexCamping is here. We, at this camp, will make sure that you become an expert in decoding any map that you may be presented with.

Learning to Hunt

Chapter 7

Various types of charts

Various types of charts


Forex charts are the basis of technical analysis, as they allow traders to visually monitor the behavior of particular currency pair or trading instrument. Chart formations plot the past history of the price movement and the main task of them is to help trader to identify the trend.



Why to use charts?


• It is very simple and extremely easy to read.
• It forms the background for many other symbols that have been developed over it.



What is a chart?


Charts are the diagrammatic instruments which help us to understand the general trend of a currency pair.


There are quite a few different types of charts and we will be discussing most of them in brief.



What are the different types of charts?


– Line Chart


A line chart simply draws a line from one closing price to the other. Thus, when we connect all the lines together, we can visualize the trend of the general price movement of a currency pair. At the bottom of the chart we can see the dates and on sides  – the prices.

– Bar Chart


• It’s a little more elaborate than the line chart.
• It indicates the opening and closing prices, as well as the highs and lows.
• The lowest point of the vertical bar indicates the lowest traded price for a specific time period while the topmost point indicates the highest traded price.


In a way, the vertical bar thus indicates the total trading range of the currency pair.


Bar charts are also popularly known as OHLC charts as they portray the OPEN, the HIGH, the LOW and the CLOSE values for a particular currency pair.

An example of a typical Bar Chart.


Candlestick Charts


• Candlestick chart is the same as a bar chart, but represented in a prettier format.
• Candlestick bars also indicate the high-to-low range with a vertical line.
• In candlestick charting, the body in the middle indicates the range between the opening and closing prices. As a rule, if the block in the middle is filled or colored in, then the currency closed lower than the price it opened at.
• In a candlestick chart, if the body is colored green, it simply means that the price closed higher than it opened at. Similarly, if it’s red, it indicates that the price closed lower than the price it opened at.


Just remember the simple thing.


Green: Good to go
Red: Not so good


It’s eerily similar to the traffic signal. Green is for profit, Red as always, denotes loss. So, in a way, your hunting mobile is getting a signal whether to go ahead or pause and wait.


A candlestick chart helps us in visually deciphering the trend of a currency just by a glance at it. There are quite a few advantages of a candlestick chart, let’s take a look.

1. It’s one of the easiest charts to read.
2. Given how simple they are, it’s a good tool for freshers.
3. Given their simple nature, they are good at identifying reversals.

Let’s see how we can change the charts.

Chapter 8

Various Analyses : Support and Resistance

So, now that we know what charts are, it all comes down to how we are going to analyse them. Let’s brush up on some of the analysis techniques.


What are Support and Resistance Levels?


Support and Resistance in Forex are the key levels where the forces of supply and demand meet. They reflect the levels at which the buyers (bulls) and sellers (bears) come into play. Support and Resistance levels are basically created by imbalance in supply and demand and represent the important areas where a lot of traders are willing to buy the security (S/L) or sell it (R/L).


The trading pattern reaches its highest point and then falls back. So, you can guess the name from here. It’s similar to facing a resistance from going further up. Thus the highest point reached before coming down is known as the Resistance.


Similarly, the trading pattern keeps on falling till it reaches a low from where it bounces back and goes up again. Thus the name Support as it’s akin to getting a Support from below.




Thus, as the market continues, the price range moves from high-to-low and several support and Resistance levels are formed.


Even now, whenever we think of “A for Apple”, our memory takes us back to our textbook. A pictorial representation is the best method to remember facts. Hence, campers, we are going to teach you to remember these analytics in a diagrammatic format.



Why use Support and Resistance Level?


  • Support and Resistance analysis is one of the most popular techniques in trading.
  • It’s one of the most reliable methods of technical analysis.
  • S/R levels test and confirm trends.
  • S/R help to identify the zones where the trend is going to reverse.


How can we plot Support and Resistance?


Now we understand the importance of Support and Resistance levels in technical analysis, but here comes the main question: How to plot S/R levels on chart? How to identify strong S/R zones?


Well, fellow campers, it’s not as difficult as it might seem. First of all look carefully at the chart and try to find the zones from which the price bounced two or more times. These zones represent the highs or lows of the price in the past.


The more times the price bounces from some level, the stronger this level becomes as the more traders are watching at this level.


Here is an example of how to draw the Support and Resistance lines:


Keep in mind 3 simple rules which will help you to plot the strong S/R levels:


  1. The price should bounce from the level at least twice before we take that level into consideration.
  2. The more bounces happen, the more important the level becomes.
  3. The more recent bounces are always more important than less recent ones.


Can we know for sure whether the Support or Resistance level was broken?


Support and Resistance, both signify the highest and lowest points of a market session, so if we state that the level was broken, that can only happen if the market closes past that level.


Remember, Support and Resistance levels are not a particular figure. The traders might be just testing the levels and hence they give an impression that they are broken but remember, that is not the case. You should be wary as most of the breakouts are false and it’s best to flush them out. Hence, it’s best to consider the Support and Resistance levels as zones instead of a definite value.


But in case the Support level was broken and the price fell and stayed below it, Support becomes Resistance. Similarly the successfully broken resistance level becomes support. It happens due to the shifts in supply and demand, causing the breached level to reverse its role.




  • Support and Resistance analysis is based on supply and demand theory. S/R zones are the zones at which a great deal of traders are willing to buy or sell a particular security.


  • Never consider the horizontal support and resistance levels as numbers, always think of them as zones instead of a definite concrete value.


  • To draw a S/R line we need to find a zone from which the price bounced two or more times, not being able to break through it.


  • If the support or resistance level does not break despite repeated tests, it indicates that the  levels are pretty strong.


  • If the price breaks through the resistance, it could flip in as the support and similarly, if the support does not hold, it can become the resistance.


  • A resistance breakout is an indication that buyers (bulls) have won the battle, similarly a support breakout signals that sellers (bears) came out to be stronger.



So campers, this camp has moved on from A for Apples to E for Elephant. Certainly not the biggest leap, but mind you, each progress you make is taking you closer to the treasure.

Chapter 9

Further Analysis : Trend Lines

What is a Trend Line?


Trend line is a tool which measures the reaction of traders to the fluctuation of the prices. This information can be helpful in determining the best time to buy or sell securities. It’s a line, connecting two and more price points and extending into the future. It acts as a suppo rt or resistance line.



Why use Trend Lines?


  • Trend lines help to identify the current trend and potential areas of Support and Resistance.
  • They also help to identify the zones where possible reversals may occur and where the trend is going to change direction.


There are three basic types of trends:


  • Uptrend (higher lows)
  • Downtrend (lower highs)
  • Sideways trends (ranging)


If the price is below the trend line, then the overall direction is down, if, on contrary, the price is above the trend line, then the overall direction is up.



How to draw a Trend Line?


The uptrend line is drawn along the support regions or in other words along the lowest points of the trend, similarly the downtrend line is drawn along the resistance regions or the highest points of the trend.


Have a look at an example: 




Some traders use bodies of the candles to draw the trend lines, but the majority of them plot the trend lines using candlestick shadows.



Validation of Trend Lines 


To draw an acceptable trend line, it takes at least 2 tops or 2 bottoms, but the more points are used for plotting the line, the more valid it is. In line with the basic rule of technical analysis, it takes two points to draw a trend line and the third and more points just confirm its’ validity. The more bounces from the line happen, the more important it becomes.



How to trade using trend lines?


There are 2 main ways of trading using the trend lines:


  • Trading on rebounce
  • Trading on breakout



Trading on rebounce: 



In this case, the investors enter the market when the price after testing the trend line, bounces away and continues the current trend.


Entry rules: 


Place a pending order 5-6 pips higher (for buy orders) or 5-6 pips lower (sell orders) than the trend line.


Stop Loss is set at the nearest local high or low.


Take Profit should be set at a disance, equal to 2 or 3 stop loss distances. Once the price moves in the right direction and crosses the distance equal to 1 stop loss distance, set the order into the breakeven.





Trading on breakout:  




In this case, the investors enter the market when the price after several attempts of testing the Trend Line, breaks throught and consolidates above or below.


Entry rules: 


Place a pending order 5-6 pips higher (for buy orders) or 5-6 pips lower (sell orders) than the trend line.


Stop Loss is set at the nearest local high or low.


Take Profit should be set at a disance, equal to 2 or 3 stop loss distances. Once the price moves in the right direction and crosses the distance equal to 1 stop loss distance, set the order into the breakeven.



Basic guidelines that you need to remember in order to use trend lines


  • To draw an acceptable trend line, it takes at least 2 tops or 2 bottoms;
  • However, in order to validate it, we need a minimum of 3 tops or bottoms;
  • A break of the trend line does not always mean that the trend will change;
  • The more you test the lines, the stronger they become;
  • If you have to draw a trend line to forcibly fit the market, it means that it’s not a correct one.

Chapter 10

Further Analysis : Channels

What is a Channel?


Trading channel is a price model in which movement of the currency pair occurs in a certain trading range during a limited time period.


A channel is born when we draw a line parallel to the uptrend or downtrend. It’s like an   advanced form of a Trend line.



Why Use Channels?


  • Channels help us identify the potential trading areas ie, the best places to buy or sell.
  • The topmost and the lowermost points of the channel represents for regions which can be considered as Support or Resistance.


There is a triad of channels that you should know about 


  1. Ascending or Uptrend channel (higher highs and higher lows)
  2. Descending or Downtrend channel (lower highs and lower lows)
  3. Horizontal or Ranging channel (sideways)




Construction of a Channel


Uptrend channel. To construct an uptrend channel, draw a trend line along the lowest points of the trend (support zones). While drawing a trend line, draw a line parallel to the uptrend and then shift that line to the position where it touches the latest tip. This is the ascending channel.


Downtrend channel. To construct the downtrend channel, drawn a trend line along the highest points of the trend (resistance zones).  Similarly, draw a line parallel to the downtrend and then shift that line to the position where it touches the latest gorge.  Your descending channel is ready.



Channel Trading Strategy 


Define support and resistance levels and draw a price channel. You may enter the market if the price reaches one of the boundaries of the channel.


Open a Buy order if the price reaches the lower boundary and comes close to the support zone. Similarly, a Sell order may be opened when the price reaches the upper boundary and comes close to the resistance zone.


You may close the trade when the price reaches the opposite border of the channel. It should be noted that a price reversal may occur before reaching the borders, in this case, it is recommend to close the order earlier.


Stop Loss order should be placed 10-20 pips above (for sell orders) or below (for buy orders) the channel or according to your approach to risk management.


The main advantage of this strategy is that it gives an opportunity to maximize profits by opening and closing positions several times during the trading day. One of the drawbacks of this tactic is that the breakthrough of the channel boundaries may lead to losses, thus it’s advised to use stop loss orders and to remember money management policies!



Some more important tips about about Channels: 


  • A channel can be constructed only by keeping both the trend lines parallel to each other. • As is with trend lines, the lower region is taken into consideration for buying while the upper region is considered for selling. • The two corresponding channel boundaries should be equally inclined, if they slide in different angles, then it is an incorrect analysis.



It’s a jungle out there fellow hunter. One of the most feared things about the jungle is its darkness. It’s pitch dark and provides shelters to unknown mysteries abound. A torch is just not good enough, however, we hunters, cannot carry too bulky a load either.


Remember, we hunters always need to be flexible in our quest. If one tool does not work, we should steadily move on to the other.


For this darkness, a Headlamp is the best thing, thus, compact and effective.  Here we have our headlamp. 

Chapter 11

Bounce and Break

Bounce and Break


You already know about Support and Resistance levels, which are one of the most useful trading tools and help to identify potential entry/exit zones.


Let’s know more about that! 


There are two main methods of trading Support and Resistance levels: the Bounce and the Break.


In order to determine good entry or exit points, it’s extremely important for trader to figure out whether the price of the currency pair bounces or breaks through some certain level. This lesson will help you to understand how to trade with the bounce and break and how to get clear entry signals.



  1. Bounce


The name says it all. It’s a speculation that price would take a bounce on resistance or support lines.


Some traders commit the hara-kiri of completely relying on support and resistance levels based on the assumption that the levels would remain stable but then, what if the price never reaches those levels? That’s more often than you can think of.


Setting your orders directly on the support and resistance levels is too risky, thus we will teach you a safer way of trading on S/R. 



Trading with the Bounce 


While trading with the bounce, it very important for traders to confirm whether the support and resistance levels hold strong. Before placing an order, the traders should wait for the price to test the level and bounce from it.  This will help a trader to avoid the cases when the price unexpectedly changes the direction and breaks through the S/R levels, which may lead to significant loss. Entering the market right on the support or resistance levels is way too risky.



  1. Break


It’s absolutely clear that the support and resistance levels can’t hold forever. Quite often the price breaks through them and this gives the traders good trading opportunities.


Thus it’s also important to understand how to trade with Breaks. There are two methods to utilize this.



  1. a) Aggressive:



Here, you trade as soon as the price passes conveniently and effortlessly through the Support or Resistance region, thus that acting as a tip-off for you to trade.



  1. b) Conservative:


Some traders prefer to hold on to the currency pair despite the support breaking and losses accumulating. Now if you decide to sell it at close to breakeven, you end up on the other side of the trade.


After the support level breaks, if too much selling and liquidation of losing positions happens, price converses and starts falling again.


When this anomaly occurs, the broken support level becomes the resistance.


Thus, traders often wait for the price to pull back from the broken support or resistance level and enter the trade in the conservative way only after the bounce of the price happens.



How to determine whether the price would break or bounce from the level? 


  • Pay attention to the candlestick sizes. If the size of candlesticks is relatively small, it signalizes that the trend momentum is not very strong and there are low chances of breaking through the support or resistance levels. More often the price with bigger candlesticks has enough strength to carry through the level.


  • Look at the shadows of the candlestick. Long upper shadows near the resistance level indicate the pressure of the bears (sellers). Similarly, the lower shadows near the support indicate bullish pressure (buyers). This in many cases signalizes the coming reversal of the price.



Learn how to draw correct Support and Resistance levels and how to test them.

Chapter 12

Japanese Candlesticks

Japanese Candlesticks


Japan, the land of the rising sun. It always presents itself as a mystery to all and it is the very same land that gave us treasure hunters, some of the easiest ways to decipher a map. Interesting, isn’t it ? A mystery teaching us to solve mysteries.



An introduction to candlesticks


• You can use a candlesticks for any time frame, be it a day, an hour, or a mere few minutes.
• Candlesticks are used to portray how the price varies and changes during the stated period.
• They are formed using the open, high, low, and close of the selected period.



Classification of candlesticks


• If the close is above the open, then a hollow candlestick (usually displayed as white) is drawn.
• If the close is below the open, then a filled candlestick (usually displayed as black) is drawn.
• The hollow or filled section of the candlestick is called the “real body” or body.
• The thin lines poking above and below the body display the high/low range and are called shadows.


The top of the upper shadow is the “high”.


The bottom of the lower shadow is the “low”.

Read on fellow campers, gather all that you can. Remember, knowledge is your greatest armor of all. Every tool might fail you, but your knowledge will never leave your side.



Candlesticks body


Longer the body, the stronger the buy or sell. It points towards high activity by the traders. Similarly, a short body indicates towards limited trading activity.


Let’s make a note here guys:


1. Long white candlesticks indicate strong pressure towards buying.
2. During such periods, the price generally increases.
3. Long black candlesticks indicate strong pressure towards selling.
4. During such periods, the price generally decreases.



Shadows on candlesticks


1. Lower shadows portray the session low.
2. Upper shadows portray the session high.
3. Long shadows indicate that trade was carried out over and above the open and close.
4. Short shadows indicate that trade was carried out in proximity to the open and close.


Spinning Top candlesticks patterns


1. Spinning tops are candlesticks with a long upper and lower shadow and small real bodies.
2. The pattern indicates what the buyers and sellers are thinking of the current state of the market.
3. During an uptrend, a spinning top means there is a lack of buyers in the market and that could reverse the direction.
4. During a downtrend, a spinning top means there is a lack of sellers in the market and that could reverse the direction.

Chapter 13



From Japanese “Marubozu” means “close-cropped.” It’s basically the candlestick, which has a very small upper or lower shadow or without any shadows on both the sides. Marubozu has a long body, which means that the trading range during a day was rather large.
Why use Marubozu?
Marubozu helps to identify who is stronger at the market – buyers or sellers and gives the signal or analytical insight for the future price direction. The high and low represents the open and close price depending on the color of the Marubozu. The longer the candle – the stronger is domination of the bulls or bears at the market.
                          C:UsersпкDesktopCampingFor blogsLessonsMarabozu.png
What is White Marubozu?
• A White Marubozu has a long white body.
• It has no shadows.
• The open price equals to the low price.
• The close price equals to the high price.
• It represents the bullish trend of the buyers.
White Marubozu shows that the price action was under the control of the buyers from the first to the last trade. A white Marubozu in most of the cases represents the first part of a bullish continuation pattern or in some cases, a bearish reversal candlestick pattern.
What is Black Marubozu?
• A Black Marubozu has a long black body.
• It has no shadows.
• The open equals to the high price.
• The close equals to the low price.
• It represents the bearish trend of the sellers.
Black Marubozu shows that the price action was under the control of the sellers from the first to the last trade. It usually denotes bearish continuation or bullish reversal during a downtrend. However, this kind of pattern has low reliability.
Closing Marubozu 
Closing Marubozu does not have the shadow from the closing price no matter of the color of the body. If the body is white, the candlestick lacks the upper shadow. Similarly, if the body is black, the candlestick lacks the lower shadow. Black Closing Marubozu is considered to be a weak candle, while White Closing one gives a strong signal.
                                        C:UsersпкDesktopCampingFor blogsLessonsMarabozu closing.png
Opening Marubozu 
Opening Marubozu does not have the shadow from the opening price no matter of the color of the body. If the body is white, the candlestick lacks the lower shadow, giving a strong bullish signal. Similarly, if the body is black, the candlestick lacks the upper shadow and provides a weak bearish signal. Closing Marubozu is more reliable than the Opening one.
                                                    C:UsersпкDesktopCampingFor blogsLessonsMarabozu opening.png
 Chapter 14

Why Use Doji?

• Doji candles represent the hesitation between buyers and sellers. Prices move above and below the open price during the session, but they remain extremely close to the open price.


 Doji :  A Brief


• Doji candlesticks have nearly the same open and close price. Thus, their bodies are extremely short. A Doji has a very small body that appears as a thin line.
• There are three types of Doji. Depending on the length of the upper and lower shadow, it may look like a cross, an inverted cross or a plus sign.

Learning to Hunt – Part 2

Chapter 15

Single candlesticks patterns: Hammer and Hanging Man

Lone rangers – single candlesticks patterns


Why to use Hammer and hanging man?


When price falls, hammers give the signal that the bottom is near and price will start to rise, soon. The long lower shadow indicates that sellers had pushed the prices even lower, but buyers were able to resist this selling pressure and hence it closed near the open value.



Hammer and hanging man


Although the hammer and hanging man look exactly alike, yet they have totally different meanings depending on the past price movement. Each has little bodies (white or black), long lower shadows, and very short or in some cases absent, upper shadows.


Hammer literally means that the market is forcing to hammer out a bottom. Hence, the name. It is the bullish reversal pattern which is formed during a downtrend.



How to recognize a Hammer?


•  The long shadow is approximately twice or thrice compared to the real body.
•  Minimalist upper shadow.
• At the upper end of the trading range, we have the real body.
The color of the real body is insignificant.

Fellow Campers, we are done with Head-lamps, Metal Detectors, Digging Shovels and Trowels. However, a treasure hunt, especially one so precious as the Dollar needs far more precision and labour. Let’s continue our excavation with other tools.



What is the Hanging Man?


It is the bearish reversal pattern that marks a top or indicates towards a strong resistance level. During a price rise, the formation of a hanging man generally means that sellers are outnumbering buyers.


The long lower shadow indicates towards the fact that sellers were pushing prices lower during the session. Also, buyers managed to push the price back up to some extent.



How to recognize a Hanging Man?


•  The long shadow is approximately twice or thrice compared to the real body.
•  Minimalist upper shadow.
• At the upper end of the trading range, we have the real body
• Although the color of the real body is insignificant, a black body is considered more      bearish than a white body.


Chapter 16

Single candlesticks patterns: Inverted Hammer and Shooting star

Inverted hammer and shooting star


• The inverted hammer and shooting star look identical to each other. The only difference between them is whether they are in a downtrend or in an uptrend.
• Both candlesticks have slim bodies (filled or hollow), long upper shadows and minimalist lower shadows.
• An Inverted hammer can be seen when the price falls, suggesting a reversal. The long upper shadow indicates that buyers tried to bid a higher price.
• Given the fact that sellers weren’t able to close the price any lower, it means that everybody who wants to sell has already sold. Thus, only buyers are left.
• The shooting star looks identical to the inverted hammer but occurs during price rise, suggesting a price rise. The shape points to the fact that despite trying hard to gain, yet the price was pulled back to the bottom. This means that sellers prevailed over the buyers.

Chapter 17

Dual candlesticks patterns: Engulfing Candles 

Engulfing Candles


Double trouble – dual candlesticks patterns


“Really Mr. Pippino? Was analysis discovered in a dark room? Otherwise can you explain me the need for so many candles?” – I asked my Teacher – Well, think of it this day, technical analysis was discovered on the night when there was no electricity”.


With these words, the Teacher I idolized, burst out laughing.


What are Engulfing candles?


The bullish engulfing pattern is a double candle stick pattern that indicates towards a probable strong move upwards. It occurs when a bearish candle is instantly succeeded by a larger bullish candle.
Conversely, the bearish engulfing pattern is the exact reverse of the bullish pattern. It occurs when a bullish candle is instantly succeeded by a larger bearish candle. This means that buyers were overwhelmed by the sellers and that a strong move down is imminent.

Chapter 18
Dual candlesticks patterns: Tweezer bottoms and tops  

Tweezer bottoms and tops


What are Tweezer bottoms and tops?


Tweezers are dual candlestick reversal patterns.


This type of candlestick pattern is usually spotted after a comprehensive up trend or downtrend, signifying that a reversal is about to happen soon.

A few of their following characteristics:


• The first candle is same as the general trend. If price moves up, the first candle remains bullish.
• The second candle is reverse to the general trend. If price moves up, the second candle remains bearish.
• The shadows of the candles compulsorily have to be of equal length. Tweezer tops should have the same highs, while the bottoms should have the same lows.

Chapter 19

Triple Candlesticks: Evening and Morning star 

Triple Candlesticks : Evening and Morning star


What are Evening and morning stars?


At the end of a trend, you can find triple candlestick patterns known as the morning star and the evening star.


These reversal patterns can be recognized through the following characteristics:


1. A part of the recent uptrend, the first stick has bullish characteristics.
2. Pointing towards the indecision in the market, the second candle has a miniscule body.  This candle might have either bullish or bearish characteristics.
3. Confirming the reversal, the third candle closes beyond midway of the first candle.

Chapter 20
Triple Candlesticks: Three White soldiers and black crows  

Three White soldiers and black crows


Fellow campers, when I was in your shoes, I did get bored occasionally but small pep-talks from Mr. Pippino always helped. He made me realize that fun and frolic are a luxury of our existence, not a compulsion. We might want to wander off for some relaxation but then, time spent, never comes back.


Mr. Pippino once went on to say something which I remember vividly till this date. It was a simple yet thought provoking line which went like, “Once you are rich, you’ll have amenities for all the luxuries of the world. Or, you might choose to live an average life and wonder at the riches of others. The time is ripe, the choice is yours!”


Let’s carry on in the same spirit, fellow campers.
What are the Three white soldiers and black crows : A brief 


• When three long bullish candles follow a downtrend, the three white soldier’s pattern is formed. It signals that a reversal has occurred.
• This candlestick pattern is a very strong signal, even more so if it occurs after an extended period of downtrend and a short period of strengthening.
• The first soldier is known as the reversal candle. It either concludes the downtrend or estates that the period of consolidation quent to the downtrend has been completed.
• A pattern is considered valid only if the second candle is bigger than the first candle’s body. Additionally, the second candle should close near its high, leaving a minimalist upper wick at most.
• A three white soldier’s pattern is completed only when the last candle is at least the same size as the second candle and has a minimalist shadow.
• The three black crows pattern is the exact reverse of the three white soldiers. When three bearish candles follow a strong uptrend, indicating that a reversal is about to occur, the three black crow pattern is formed.
• The body of the second candle has to be bigger than the first candle and should be concentrated near its low. The third candle should be at least the same size or larger than the second candle’s body with a minimalist lower shadow.

Chapter 21
Triple Candlesticks: Three inside up and down candlesticks  

Three inside up and down candlesticks


What is a Three inside up and down candlestick formation?


Pointing towards the fact that the downtrend is almost over and that a new uptrend has begun, at the bottom of the downtrend, we can find the three inside up candlestick formation is a trend-reversal pattern.


The valid formations have the following properties:


• Having a long bearish candlestick, the first candle is to be found at the bottom of a  downtrend
• The second candle is found near the midpoint of the first candle.
• Confirming that buyers have overcome the downtrend, the third candle closes above the first candle’s high.


Indicating that the uptrend has finished and that a new downtrend has begun, the three inside down candlestick arrangement is found at the top of an uptrend.


They have the following characteristics:


• Defined by a long bullish candlestick, the first candle is found at the top of an uptrend.
• The second candle is to be found near the midpoint of the first candle.
• Confirming that sellers have survived the uptrend, the third candle closes below the low of the first candle.

Chapter 22
Japanese Candlesticks : A summary  

Japanese Candlesticks : A summary


• A hollow candlestick (white) is drawn if it closes above the open.
• A filled candlestick (black) is drawn if it closes below the open.
• The hollow section of the candlestick is called the real body.
• The filled section of the candlestick is called the body.
• Shadows are the thin lines which emerge above and below the body exhibiting the high and the low range.
• The top of the upper shadow is referred to as the high.
• The bottom of the lower shadow is referred to as the low.


Strong buying or selling is indicated by long bodies. The longer the body, the more consuming the trading pressure. Short bodies express least trading activity.


Remember this basic rule:


• The session high is indicated by Upper shadows.
• The session low is indicated by Lower shadows.

Candlestick patterns can be categorized by how many bars make up the pattern. We have single, dual, and triple candlestick formations.


Let’s have a look at some of the most common patterns:


Here, at this point, please gather all your attention and focus as the following instruments are going to be the most vital ones in the hunt. If you want to be a great hunter, you should have the knowledge to master these. They are synonymous to 4×4 Vehicles, Night Vision Goggles of a treasure hunt.

Becoming an Expert Hunter

Chapter 23




What is Fibonacci?


Fibonacci retracements are a method of technical analysis for determining support and resistance levels. They are named so as they use the Fibonacci sequence. Fibonacci retracement is based on the idea that markets will retrace a predictable portion of a move, after which they will continue to move in the original direction.


Fibonacci Retracement Levels:

0.236, 0.382, 0.500, 0.618, 0.764

Fibonacci Extension Levels:

0, 0.382, 0.618, 1.000, 1.382, 1.618
Why use Fibonacci?


• Retracement levels serve as prospective support and resistance areas.
• A trader watches the levels and utilizes them for buying/selling, placing stops etc.
• Traders mark the extension levels as markers for profits.
• Due to their large scale utilization, majorly they tend to come true.
• Most charting software includes both Fibonacci retracement levels and extension level tools.
• You just need to mark the Swing High and Swing Low points, in order to apply Fibonacci levels to the charts.



 Fibonacci Swing High and Swing Low


• A candlestick with at least two lower highs on both the left and right of itself represents a Swing High.
• A candlestick with at least two higher lows on both the left and right of itself represents a Swing Low.
Chapter 24

Combining Fibonacci with Support and Resistance

Combining Fibonacci with Support and Resistance


An effective way to use the Fibonacci tool is to spot potential support and resistance levels and see if they align with Fibonacci retracement levels.


If the levels match, you combine them with other price areas that a lot of other traders are watching, then there is a very high chance of price bouncing from those areas.
Why should we combine Fibs with trend line analysis?


• Fibonacci levels work optimally during market trends.
• During a downtrend or uptrend, Fibonacci retracement levels are a way to join the trend.
• Hence, it’s best to check where the Fibonacci levels and the trends align
A more exact entry price can be obtained with the Fibonacci tool


It is profitable to use the Fibonacci tool, even if our entry is based on a retest of the trend line.
However, just like other drawing tools, drawing trend lines are pretty subjective too.


It’s always better to go long to get a better chance of a profitable trade, in case when a trend develops.
Fellow campers, after going through the Fibonacci tool, I had thought that I had learnt it all but it is then that my guru broke my misconception.


There is never a restriction on the number of tools that you can pack your bag with. A tool might be highly useful however; you never know which tool or which combination of tools will catch your fancy. So keep as many tools handy as possible.

 Chapter 25

Moving Averages 

Moving Averages


What is a Moving Average?


• A moving average is just a method to smooth out price action over time.
• Moving average is taking the average closing price of a currency pair for the last ‘X’ number of periods.


On a chart, it would look like this:

Why should we use Moving Averages?


• Similar to other indicators, a moving average indicator is used to forecast future prices. The slope of the moving average helps us determine the potential direction of market prices.
• Moving averages smooth out price action.
Moving Averages : A brief


• There are various types of moving averages with each of them having their own level of “smoothness”.
• It is believed that the smoother the moving average, the slower it is to react to the price movement.
• Similarly, the choppier the moving average, the quicker it is to react to the price movement.
• Thus, to smoothen out a moving average, you should get the average closing prices over a longer time period.


There are two major types of moving averages:


• Simple
• Exponential
Simple Moving Averages


• Just as the name states, a simple moving average is the simplest type of moving average.
• A simple moving average is calculated by adding up the last “X” period’s closing prices and then dividing that number by X.
Plot a 5 period simple moving average on a 1-hour chart, add up the closing prices for the last 5 hours, and divide that number by 5. That’s it.


You get the average closing price for the last five hours. By joining those average prices together, you get a moving average.


To plot a 5 period simple moving average on a 10-minute chart, add up the closing prices of the last 50 minutes and then divide that number by 5.


To plot a 5 period simple moving average on a 30 minute chart, add up the closing prices of the last 150 minutes and then divide that number by 5.


Most charting software’s calculate automatically. However, you must know how to edit the indicator.


Once you understand the workings if an indicator, you can adjust and create different strategies as per the market changes.


Similar to every other indicator, moving averages operate with a lag.


Since the averages of past price history are being considered, in reality, you can only see the general recent past path and the general direction of “future” short term price actions.


If we plot three different SMAs on the 1-hour chart of USD/CHF, then, the longer the SMA period is, the more it lags behind the price.


The 62 SMA is farther away from the current price than the 30 and 5 SMAs.


This is because the 62 SMA add’s up the closing prices of the last 62 periods and divides it by 62. Thus, justifying the saying again that the longer period you use for the SMA, the slower it is to react to the price movement.


The SMAs in the chart portrays the overall sentiment of the market at a given point in time.


Here, we can see the trend of the pair.


Using the broader view that the moving averages give, we can now gauge the general direction of its future price.


Thus, with efficient use of SMAs, we can tell whether a pair is trending up, trending down, or just ranging.


However, simple moving averages are susceptible to spikes. This can give us false signals. We might falsely believe that a new trend may be developing but in reality, nothing is happening.



Exponential Moving Average


As already stated, simple moving averages are distorted by spikes. Let’s check an example.


Let’s say we plot a 5-period SMA on the daily chart of EUR/USD.

The closing prices for the last 5 days are as follows:


Day 1: 1.3172
Day 2: 1.3231
Day 3: 1.3164
Day 4: 1.3186
Day 5: 1.3293


The simple moving average would be calculated as follows:
(1.3172 + 1.3231 + 1.3164 + 1.3186 + 1.3293) / 5 = 1.3209


Now, on Day 2, a report is published that causes the euro to drop across the board. This causes EUR/USD to plunge and close at 1.3000. Let’s see its effect on the 5 period SMA.


Day 1: 1.3172
Day 2: 1.3000
Day 3: 1.3164
Day 4: 1.3186
Day 5: 1.3293


The simple moving average would be calculated as follows:
(1.3172 + 1.3000 + 1.3164 + 1.3186 + 1.3293) / 5 = 1.3163

The simple moving average value would be a lot lower and it would make you believe that the price was falling, while the truth was that Day 2 was just a lone event resulted by the poor outcome of an economic report.


The emphasis is again on the fact that Simple Moving Average values are affected by spikes and the overtly simple nature doesn’t help either.


Hence, there was a need to weed out the spikes.


Thus, Exponential Moving Average was formed



Why use Exponential Moving Average?


• Exponential moving averages (EMA) places more emphasis on recent periods.
• Hence, the spike on Day 2 would be of lesser importance and would have a lesser effect on the final value.
• It takes into account, the latest trader activity.


Let’s see how an SMA and EMA would look side by side on a chart

You can see that the red line (the EMA) seems to be closer price than the black line (the SMA).


It is thus, a more accurate representation of the recent price action. You have already been explained as to why this happens. Similar to all other aspects, in trading too, it is of grave importance to lay emphasis on what has been happening recently than something that happened some time back. The latest trade results are thus more important than a trade action of a week back.



Major Differences between SMA and EMA


Advantages of EMA over SMA


• Since they are dependent on recent trades, they are more accurate and help you catch trends very early, which thus results in higher profit.
• Since you can spot a trend very early, you can utilize it longer and hence, more profits.
• However, during periods of consolidation, you might spot a false trend and act on it.
• Since EMA reacts to latest trade results, even a spike could form a new trend which would eventually culminate in a loss if you acted as per that.
• However, by virtue of considering all the trends, if you want a smoother and slower moving average, then a longer period SMA will work the best for you.
• It’s thus always wiser to look at longer time frames, as it will give you an idea of the overall trend.
• SMA is slower to respond to the price action, however, the bonus is that it will possibly save you from many fake outs. The flip side is that it may delay too long, and you might forego on a good entry price.


Advantages of  SMA


A smooth chart which has very less fake outs.


Disadvantages of SMA


Very slow with a prolonged delay, which might result in you losing out on profitable buying and selling signals.



Advantages of  EMA
It’s very fast and portrays the latest price trends.


Disadvantages of EMA


Highly susceptible to fake outs and even a spike can cause extremely errant signals.


Thus, to remain on the safer side, many traders prefer to plot multiple moving averages. The longer period simple moving average is used to find out the overall trend; while a shorter period exponential moving average is used to locate a good time to enter the trade.



Utilizing Moving Averages:


• Moving averages work best to help you determine the trend.
• Plotting a single moving average on the chart is one of the easiest yet effective ways.
• You can realize that the price is in a general uptrend when price action generally stays above the moving average.
• Similarly, you realize that the price is in a downtrend when the price action generally stays below the moving average.
• However, sometimes, it’s too simple.


Take an instance where the USD/JPY has been in a downtrend; however a news report comes out causing it to go up again.


You can see that the price is now above the moving average.


You sense an uptrend and buy a billion units. You are full of confidence that USD/JPY is going to rise.
Unfortunately, facts turned out that traders just reacted to the news yet the trend continued and price fell.


Let’s see some trader workarounds:


• Plot multiple moving averages instead of one.
• Depending on the order of the moving averages, it portrays a clearer picture of whether the pair is trending up or down.


During an uptrend: The faster moving average is above the slower moving average.


During a downtrend: The slower moving average is above the faster moving average.


Let’s consider that we have two MAs: the 10-period MA and the 20-period MA.


Throughout the uptrend, the 10 SMA is above the 20 SMA. Thus, by the use of the moving averages, we can show whether a pair is trending up or down. Combining this with your knowledge on trend lines, you decide whether to buy or sell a currency.


Using multiple moving averages is also an option. Maintain the order of the trends (fastest to slowest during uptrend, slowest to fastest during downtrend), and you can determine which trend the pair is in.


Do not lose focus, we are nearing the finish line pretty much. It would be a shame if the boat sank near the river bank!

Chapter 26

Moving Average Crossover Trading

Moving Average Crossover Trading


You are now well aware as to how to plot trends using the moving averages.


Additionally, moving averages can also help you determine when a trend is about to end and reverse.


To do that, you just have to put on a couple of moving averages on your chart, and wait for a crossover. If the moving averages cross over one another, it might signal that the trend may change soon, thus giving you a better entry. That always culminates in more profit!


A crossover occurs when a faster Moving Average crosses either above a slower Average, which is considered a bullish crossover or below which is considered a bearish crossover. Faster Moving Average is the MA with a shorter period (for example MA 20), respectively the slower Moving Average is the MA with a longer period (for example MA 50).


Another look at that daily chart of USD/JPY might help explain moving average crossover trading more easily.


From April to July, the pair was in a general uptrend. It topped out at around 124.00, before heading down gradually. Around the middle of July, the 10 SMA crossed below the 20 SMA.
It was followed by a gradual downtrend!


If you had the premonition to short at the crossover of the moving averages, you could have made almost a thousand pips in profit.


But then, there will definitely be trades, where you would lose money as well. In trading, remember, no one makes profit always. You have to take in a few losses. Just that a good trader can reduce the loss instances.

Some traders close out their position once a new crossover has been made or even when the price has moved against the position of a predetermined amount of pips.


The flip side of a crossover system is that while they work beautifully in an unstable and/or trending environment, they are not so accurate when the price is ranging.

Chapter 27

Dynamic Support and Resistance 

Dynamic Support and Resistance


We can also use moving averages as dynamic support and resistance levels.


• It’s pretty different from the traditional horizontal support and resistance lines.
• Depending on the latest price action, they are constantly changing.


Some traders are heavily dependent on the moving averages as key support or resistance.


They buy when price falls and tests the moving average and sell if the price rises and comes in touch with the moving average.


Let’s have a look at the 15-minute chart of GBP/USD and combine the 50 EMA. Let’s check if it can serve as the dynamic support or resistance.


We can observe that every time price approaches 50 EMA and tests it, it acts as a resistance and then the price bounces down.


• They are just like the normal support and resistance lines.
• Price doesn’t always bounce back from the moving average. In some cases, it will go past it somewhat before joining in the direction of the trend.
• Sometimes, you will see the price blast past it completely.
• Some traders combine two moving averages, and trade only when the price is in the middle of the space between the two moving averages.

Breaking through Dynamic Support and Resistance


Moving averages can potentially act as support and resistance.


Let’s take another look at the 50 EMA on GBP/USD’s 15-min chart.
In the chart above, we can see that the 50 EMA held as a strong resistance level for a while despite the GBP/USD repeatedly bouncing off it.
However, as has been highlighted with the red box, the price finally broke through and went up. Then, the price came down and tested the 50 EMA again, which proved itself to be a strong support level.
Sometimes, moving averages can also act as dynamic support and resistance levels.
Moving averages keep on changing, thus you can just leave it on your chart and need not keep on checking on it to spot potential support and resistance levels. This provides a great benefit to us traders.
However, the biggest problem is to finalize which moving average to use.
Chapter 28
Moving Averages: A summary

Moving Averages : A summary


There are numerous types of moving averages. The two most common types are a simple moving average and an exponential moving average.
• Simple moving averages are the simplest form of moving averages; however their susceptibility to spikes poses a problem.
• Exponential moving averages are more concerned with the latest trading activity.
• Latest trading activity is given much more importance than an activity which occurred sometime back.
• Simple moving averages are comparatively smoother than exponential moving averages.
• Shorter period moving averages are not as smooth as longer period moving averages.
• Although an exponential moving average can be used to spot a trend faster, it is highly prone to fake outs.
• Smooth moving averages lag behind in responding to a price action but it is safe from spikes and fake outs. However, due to their general dawdling nature, you may enter a trade late and that can be a loss for you.
• Moving averages can be utilized to define the trend, when to enter, and when the trend is coming to a halt.
• Moving averages can also be used as dynamic support and resistance levels.


Always use multiple moving averages so as to take into consideration, both long term movement and the short term movement.


The hardest part yet, is to determine which moving average to employ. It’s best to take into consideration your style of trading and choose a moving average in accordance with that. However, always carry out some tests first and check the compatibility of the chosen moving average and your trading style.

The Final Dig for the treasure

Chapter 29

Leading and Lagging indicators

Leading and Lagging indicators


It just came to my mind that by the time I learned this part of the course, Mr. Pippino had expressed his satisfaction over my progress. I still remember the smile on his face when I could reply to each and every question he threw at me from the previous lessons. Now, I realize why. We were nearing course completion and he had realized that he had done a good job at imparting his knowledge to me. I really hope I can say the same about you campers as well!
Why are Leading and Lagging Indicators and why should we use them?


• A leading indicator gives a signal before a new trend or reversal is about to take place.
• A lagging indicator, on the other hand, gives a signal after the trend or reversal has taken place.


Once you know the nature of the market that you are trading in, you can determine which indicator to use and use it accordingly to get the precise signals and this again helps you in making more profit.
As with moving averages, this too will take time so as to determine which one to use.

Chapter 30

Chart Formations

Chart Formations


Why are Chart Formations and why should we use them?

Chart formations help us in identifying conditions as to when the market is ready to break out. It also gives an indication whether the price will continue in its existing direction or whether it will reverse, thus allowing us to change our strategies.
Types of Patterns
• Double Top and Double Bottom
After an extended upwards movement, the reversal pattern which is formed, is known as a Double Top. The “Tops” are the highest points achieved which are not going to be broken.


Similarly, after an extended downtrend, the reversal pattern which is formed is known as a Double Bottom. The “bottoms” are the lowest points achieved which are not going to be broken.


They are known as Double tops or bottoms since price tests the highs and lows and bounces off them forming more than one top or bottom. Hence the name.


• Head and Shoulders and Inverse Head and Shoulders


A head and shoulder is also a reversal pattern which is formed by a high “shoulder” followed by a higher summit “head” and then falling off to the previous high “shoulder” levels.


Similarly, when the same pattern is formed for lows, it is known as an Inverse Head and Shoulders.

• Rising and Falling Wedges


A wedge points towards a stop in the current trend. It means that the traders are still not sure as to where to take the pair to.
When price stabilizes between the upward slanting support and resistance lines, then a rising wedge is formed.
Similarly, when price stabilizes between the downward slanting support and resistance lines, then a falling wedge is formed.


• Bullish and Bearish Rectangles


When price is bounded by parallel support and resistance lines, then a rectangle is formed. It stands for the consolidation period between the buyers and sellers. If the price consolidates during an uptrend, then it is a bullish rectangle. For price consolidation during a downtrend, then it is a bearish rectangle.

• Bearish and Bullish Pennants


After a major uptrend or downtrend, the price consolidates for a while, forming tiny symmetrical triangles. They are known as pennants.
A bullish pennant is formed after an uptrend.
A bearish pennant is formed after a downtrend.


• Triangles (Symmetrical, Ascending, and Descending)


When the inclinations of a price high and a price low converge together to single point appearing like a triangle, the formation is known as a symmetrical triangle.
The triangle formed by a resistance level and an inclination of higher lows, is known as an Ascending triangle. Conversely, the triangle formed by support level and the inclination of lower highs, is known as a descending triangle.


Remember the following terms:


Reversal: The chart pattern that signals that the ongoing trend is about to change course.
Continuation: Also known as a consolidation pattern, this signals that the ongoing trend will resume again.
Bilateral: These signal that the price can move either way.
A quick guide to indicators:


Type of Pattern When do they form Signal Type Following movement
               Double Top           Uptrend        Reversal               Down
               Double Bottom           Downtrend        Reversal               UP
               Head and


          Uptrend        Reversal               Down
               Inverse Head and     


          Downtrend        Reversal               Up
               Rising Wedge           Downtrend     Continuation               Down
               Rising Wedge           Uptrend        Reversal               Down
               Falling Wedge           Uptrend    Continuation               Up
               Falling Wedge           Downtrend     Reversal               Up


          Downtrend  Continuation               Down
               Bullish Rectangle           Uptrend  Continuation               Up
               Bearish Pennant           Downtrend  Continuation               Down
               Bullish Pennant           Uptrend  Continuation               Up

Chapter 31

Pivot points 

Pivot points


What are Forex Pivot points?


A forex pivot point and its support/resistance levels are the zones from which the direction of price movement may change.


Why to use Forex Pivot points?


They are beneficial to short term traders who are willing to trade and take advantage of the small price movements.


Here is a example of Pivot Points, plotted on EUR/USD chart with H1 timeframe:



How to calculate Pivot points? 


Pivot point is calculated by the formula:
Pivot Point (PP) = (High + Low + Close) / 3
High stands for the Previous High;
Low stands for the Previous Low;


Close stands for Previous closing price.
For calculation of Support and Resistance levels, the following formulas are used:

First support level (S1) = (2 x Pivot Point) – High

First resistance level (R1) = (2 x Pivot Point) – Low


Second support level (S2) = Pivot Point + (High – Low)

Second resistance level (R2) = Pivot Point – (High – Low)


Third support level (S3) = High + 2 x (Pivot Point – Low)

Third resistance level (R3) = Low – 2 x (High – Pivot Point)


Sounds too complicated, isn’t it?  Well, may be, but don’t freak out, fellow Camper! There is an easier way. Most of trading platforms have tools for calculating Pivot Points and levels. Just make sure you indicate all the values correctly. Plus you can always use Pivot Point calculators, available in Internet.



A brief on Forex Pivot points


• It’s just another technique used by traders to identify potential support and resistance areas.
• They are highly beneficial to traders since a large number of currency pairs trend between their levels.
• Pivot points are used by Trend, Range or break-out traders.
• A range trader places a buy order near support while makes a sell order near the resistance.
• It also allows breakout traders to locate the key levels which need to be broken to form a strong momentum move.
• Some traders use the pivot points to establish the bullishness or bearishness of a currency pair.
• You can also combine them with other analysis such as candlesticks, moving averages etc to get a more accurate analysis.
Chapter 32

Bollinger Bands 

Bollinger Bands



Bollinger Bands® are one of the most popular and easy tools of technical analysis, invented by John Bollinger in the 1980s. It can be used for any financial market – Forex, Stocks or Bonds. The Bands provide statistical estimate of how far may the short-term price movement go before it returns to a major trend.
Why use Bollinger Bands®?
Bollinger Bands® are used to indicate relative price levels and measure the volatility of the market. The use of Bands varies from trader to trader. Many traders use this tool to determine overbought and oversold levels. They buy when price hits the lower band and exit when price touches the moving average in the center. Other traders buy when price breaks above the upper Bollinger Band or short-sell when price falls below the lower Bollinger Band.
What are Bollinger Bands®? 
Bollinger Bands consist of a middle band with two outer bands.
Central line = Moving average 
Upper Band = Moving Average + (K + Standard deviation) 
Lower Band = Moving Average – (K + Standard deviation)  
The middle band is a simple moving average that is by default set at 20 periods (which means that the indicator takes into account the past 20 time periods). The outer bands are usually plotted two standard deviations away from a simple moving average. The distance between the lines depends on price behavior. The bands automatically widen when volatility increases and narrow when volatility decreases. If the band narrows, we can observe the sideways movement of the market. If it widens, going up or down – the market is trending. The middle line helps to determine the direction of the market.

Bollinger Bands®: A brief


• When there is less price movement, the bands are close to each other.
• During high movements, the band widens out.
• Always, remember that the price will try to return to the center of the bands.
• Since price always wants to come back to the center, there is a bouncy nature to the band.
• This is known as the Bollinger bounce.
• Use a longer time-frame to obtain a more accurate band.
• Similar to the bounce, we have Bollinger squeeze too.
• When the bands contract and squeeze together, it signals an imminent break-out.
• For more details, please visit www.bollingerbands.com .



Technical analysis, based on Bollinger Bands® is an independent and useful method, which allows to estimate the volatility of the market as well as to define the beginning of strong market movements. However, Bollinger Bands® don’t always give accurate buy and sell signals, thus it’s best to combine the indicator with other tools of technical analysis.


 Chapter 33
Moving Average Convergence
Divergence – MACD 


Moving Average Convergence Divergence


MACD is trend-following momentum indicator that uses the difference between the short-term and long-term price trends to anticipate the future movements. It shows the relationship between two moving averages of prices.  MACD consists of Main line, Signal line and Histogram. Signal line functions as a trigger for Buy and Sell signals. In MetaTrader, the default MACD has only Signal line and Histogram, while in other platforms, there are both the MACD main line and MACD histogram.



How MACD is calculated? 


Signal Line: 9-day EMA of MACD Line
MACD Line: 12-day EMA – 26-day EMA
MACD Histogram: MACD Line – Signal Line



Why use Moving Average Convergence Divergence?


• The MACD is a good technical indicator used to produce or confirm Buy and Sell signals in the Forex market.


• It is used to identify a new Bearish or Bullish trend.



How to interpret MACD? 


• As the two averages go separate ways, the line drawing the difference of the moving averages, widens up or diverges. Hence the name Divergence. Similarly, as the two averages come closer, the line shrivels up or converges. Hence the name, Convergence.


Crossovers: When the MACD historgam crosses the Signal line and moves above, the indicator gives a bullish signal, which suggests that the price is likely to gain an upward momentum. Similarly when the MACD crosses below the Signal line, investors using this as a bearish signal, tend to Sell.


Divergence: When the previos peak of an upward channel is lower than the next peak and on MACD chart – on the contrary – higher, it means that the current market trend is weakening. Therefore, change in price direction can be expected.



• Dramatic rise: When the MACD rises dramatically – it’s a sure signal that the security is overbought and is likely to return to normal levels soon.


• Zero line signals: When the MACD is above 0, the long-term average is below the short-term average, which indicates the upward momentum. Similarly when the MACD is below 0, it signals downward momentum. Moreover, the zero line quite often acts as support and resistance areas.


My mentor had made me practice for hours and hours over his non-descript PC on Meta-Trader. Today, every bit a hunter I am, it is due to the hunting skills honed by repetitive practice on the Meta-Trader platform.


Do not take this lightly, your hours spent on this platform can make or break your life. I will try to present a small guide to Meta-Trader so that it comes much easier to you when you finally use it.

Enjoying the treasure safely

Chapter 34

Meta-Trader: A guide

Meta-Trader: A guide


Meta-trader is software developed by Meta-quotes software. It’s used for online trading in Forex, CFD’s and Future markets. It can be downloaded from almost all the online Forex broker companies, as they provide it for free from their websites. We want you to know all there is to know about Meta-trader since, as a trader, you will be spending a major part of your day on the computer, using the software.


Hence, we are trying to brief you on its usage and features. Also, please note, it is commonly known as MT4.


Download and Installation


You can directly download it from the MetaQuote’s website or from the forex broker sites as already stated. The download should not take more than a few minutes. Click on the download button and then follow the steps as per the diagram given below.

Once the installation is completed, the program launches with its default settings.


• You will be asked to enter your personal address details.
• Select the account type, Currency, Leverage and deposit amount.

Generally, by default, a DEMO account is created for you to practice well, in order to know the nuances of trading before you actually start trading with real money.

However, in case you have an account with a Forex broker already, you may enter those details and log in to your account.


You also need to click on “I agree to subscribe to your newsletters” in order to proceed to the next page i.e.; your account. Provided that you have an active internet connection, the details start to refresh themselves and you can notice the movement in the price-charts.

Chapter 35

Meta-Trader: Further options 

Meta-Trader : Further options


Common Dialogue Box Windows


Now that you have entered your account, the main trading page, let’s get you up-to-date with where you can find and access the features embedded in Meta-Trader.
• MT4 opens with 4 charts, each representing a different currency pair.
• The toolbars are located at the top of the screen, beginning from the left.
• On the left side of the window, below the toolbars, you will find a “Market Watch” window.
• Symbols, in the window, represent the currency pairs list.
• The other tab, Tick Charts, can be used to see the currency pair’s activity.
• Below the market watch, you will find the Navigator window.
• Here, you can view your accounts, indicators, Expert Advisors, Scripts etc.
• At the bottom of the screen, you will find the Terminal section.
• It contains 6 tabs, Trade, Account history, Alerts, Mailbox, Experts and Journal.



• Right click on any of the 4 chart and click on “Properties”
• You can change the appearance of the charts from there.
• Using the color tab, you can change the color scheme of the charts.
• You may choose separate colours for background, foreground, grid, bar colors etc.
• Using the common tab, you may alter certain features such as volume etc.



• After a color scheme has been chosen, you can save it as a template.
• You can do so by clicking on the template icon   in the top toolbar.
• Give it a name and then it will start appearing in the drop-down list of templates.
• Now, this template is ready to be applied to any chart you desire.
• You may also choose candlestick or bar charts by choosing them from
• As you place the cursor over any of them, it will display the name of the type of the chart and you can choose a desired one.
• You may also click on the “Charts” button on the top toolbar and choose a chart from there.

Chapter 36

Meta-Trader: An Expertise

Meta-Trader : An Expertise



• You may chose from a plethora of technical analysis indicators by clicking on the “Add Indicator” button.
• You may also click on the “Insert” button on the top toolbar and select “Indicators.”
• You may choose any from trends, oscillators, volumes etc by selecting the appropriate link.
• After the indicator selection, you can change the inputs such as the length of the moving average or you may stick to the default settings.
• Then, the indicator starts appearing on the price chart.

Chart Size


• A price chart can be closed, maximized, minimized or restored.
• You can do that by right clicking on the chart’s tab under the chart windows.
• Check out the options.




• It is very helpful at times to zoom in and have a detailed look at the chart.
• The “Zoom in/out” icons    help you do just that.
• You can click on the + sign to zoom in and get a magnified look.
• Once done, you can click on the – sign to zoom out and get a broader picture.



Time Frames


• You can choose different Time-Frames by clicking on the  icon.
• You may choose a time frame based on minutes, hours, daily, weekly and monthly.
• It gives an additional advantage of watching the same trade on multiple time frames and analyse accordingly.
• You may choose the different time-frames from the following toolbar icons.

Drawing instruments


• A variety of trading instruments are used by traders to analyse the trade via different viewpoints.
• You can draw vertical lines, horizontal lines, trendlines, channels, Fibonacci retracements etc.
• The drawing tools can be utilized by the  buttons.
• You can also click on the “Insert” button in the top toolbar and select additional tools.



Internet Connectivity


• You can check your internet connection at the bottom right corner of the screen.
• Green bars    show connectivity.
• Red bars  indicate a loss of connection.
• The numbers of bars are proportional to the speed of the internet.



Refreshing Data, Live accounts and Chronological Data


• After opening the software and launching the account page, you can view the current market data provided your internet is working strong.
• By chance, if the charts do not update despite a working connection, clicking on “Charts”  “Refresh” should ensure that they start updating again.
• In order to view past data, you need to download it from the MT4 history center.
• Considering 1440 minutes in a day, set the number of bars that will accommodate the data that will be downloaded.
• Go to Tools –> Options –> Charts –> Max bars in history to set the maximum number of bars.
• Click on Tools –> History Center to open the History Center.
• Double click to populate the database on the right hand side of the window, choose the instrument and the time-frame.
• Data can be exported in varied formats. Goto Help –> Help Topics for the same.



Let’s see the details of the order window.


• Right click on the “Market Watch” window and select “New Trade”
• Right click on an active chart and select Trade –> New Order.
• Click on the “New Order” button in the Toolbar.



Let’s check some more methods.


• Select the “Symbol” from the drop-down list at the top. An equivalent Tick-Chart will appear in the left pane.
• Volume denotes lot size. Here 1 volume corresponds to 1 standard lot i.e.; 100,000 units.
• Stop loss and Take profit has already been explained previously. A limited number of brokers permit their usage only.
• Choose the order type and trade directionality.
• Clicking on “Okay” will close the window.

You can view the open order in the “Terminal” window by clicking on the “Trade” tab.


Right-click on the trade in the “Trade” tab of the Terminal in order to modify and/or delete the order.

• Traders can enter the stop loss / take profit levels via the window.
• Click on the “Copy as” button to enter the current price in the stop loss / take profit fields.
• You can further change them to enter your own desired values.
• Once desired values are set, click on the long horizontal bar at the bottom of the window to enter the trade.
• The bar turns active only once the stop loss / take profit fields have been set.

• Once the loss / take profit fields have been set, they appear on the chart as horizontal lines at the matching price levels.
• It thus becomes easier to watch over an open trade.
• You can also add a trailing stop for added flexibility.
• Right click on the trade tab –> select “Trailing stop” and set it.

How to close orders and check transaction history


• Once the stop loss / take profit are reached, trade closes automatically.
• Additionally, trade can be closed by highlighting “Trade” in the trade tab, right clicking and selecting close order.

• Once you select “Close order” a window appears and asks for confirmation.
• You can also open the window by double clicking on the “Trade” in the trade tab of the terminal.
• On the window, click on the yellow horizontal bar to close the trade.
• Additionally, you can also close a trade by opening an equal trade in the opposing position.
• It is known as Stop and Reverse, SAR method.



Always remember: 


• All open trade activity can be viewed in the “Trade” tab of the Terminal.
• All account history will appear in the “Account History” tab of the Terminal.

  Chapter 37
Connecting Meta-Trader to a mobile device 

MT4 for mobile device and Expert Advisors


Connecting MT4 to a mobile device


• You get most of the features on the mobile version as well.
• You may view charts, use the analysis tools, start/close trades etc.
• It is available on Windows mobile platform.
• Android and IOS platforms for mobile are supported via 3rd party applications.
• A number of brokers provide the application for mobile platforms as well.
• It is best to confirm beforehand with the concerned broker, regarding the availability of the mobile app.
• Certain brokers charge a fee for providing the mobile service.



Using Expert Advisors


• You can use the Expert Advisors to automate your trading.
• You may also use your own indicators by using the “MetaEditor” feature.
• Click on Tools –> MetaQuotes Language Editor / MetaEditor Icon    in the toolbar, to open the programming environment.
• You can click on the Help button and learn about various topics.
Help –> MQL4 community –> Select any between Website, Book, Documentation, Articles, Code Base and Forum.
• You can use the Forum to post various questions and other members will reply accordingly.

• Once the EA’s have been set, you can apply them to a chart.
• On the chart, they can perform a variety of functions such as technical analysis, automated trade etc.
• Expert Advisors, Custom Indicators, Scripts etc can be added to a chart by the click and drag method.
• Also, you can double click on the specific item within the navigator window for the same.

As with the rest, you can go to the “Help” menu again for details regarding Expert Advisors.

Chapter 38

Meta-Trader: Shortcuts

Meta-Trader : Shortcuts


A few time-saving guidelines


Let’s guide you over some methods to save time.





• You can save your arrangement of charts on the screen.
• You just have to click on the “Profiles”  button and click on “Save profile as”.
• You can save a number of profiles.
• When you need to access either any, click on the “Profiles” icon again and select one from the drop-down list.





• Trendlines are drawn to identify potential zones of resistance and support.
• You can click on the “Trendline” icon to draw a trendline on the chart.
• Once drawn, you can click and drag to modify it.
• To rotate the trendline, you can click and drag any of the ends of the trendline.
• To move the trendline to a different price level, click and drag the center box of the trendline.
• To draw a parallel trendline, “Ctrl + Click” on the intended trendline.
• To adjust the appearance of the trendline, right click and open the “Trendline Properties” box.
• To remove a trendline, right click and select “Delete”



Crosshair Mode


• Crosshair mode makes it very simple to identify a price bar’s price high and price low and the time and date when those levels were attained.
• Using this mode, you can move the crosshair over the intended price bar and the matching price and time values would be learnt.
• You can choose the crosshair mode by selecting the   icon in the toolbar.



Removing the objects drawn


• You can remove the last drawn object by pressing the backspace button on the keyboard.
• Subsequent pressings will keep on removing the objects drawn before that last removed item.





• For multiple open charts, tabs appear under the chart windows.
• You can recognize a chart by the symbol and time-frame on its tab.
• Double click on a tab to toggle between a single chart view and all chart view.
• Click on “Window” in the toolbar and select the option from the drop down list to adjust the display.
• You may select a cascaded view or have them tiled horizontally.

Chapter 39

Staying secure from scams

Staying secure from scams


I have tried my best to impart my findings to you.  However, only further practice will make you perfect. Practice makes a man perfect and it is no exception here. Practice, practice and practice all that you can. After all, this practice tends to make you rich!


However, also be advised that not all hunters out there are honest. A majority is there just to make a quick buck and no sense of brotherhood can be expected from them. Make yourself aware as to how to identify and avoid them.


Protect yourself from Scam


• Be wise and well-informed. Always remember, something which appears too good to be true, generally isn’t true after all.
• Always choose a licensed and registered broker. Even after that, take details about them before investing.
• Just because a Forex Manager has been in the market for long, do not trust him blindly. In this field, it takes a split second for a person to change his intentions.
• Do not trust Robots. They can never accommodate the continuously changing market scenarios in their programming.

Some Forex Scams lists:

Chapter 40

Summing it all up

Summing it all up

• There is no sure shot way to state which trading style suits you best.
• There are various trading styles and similarly, various trading mindsets as well.
• After hours and hours of trading, would you learn which style suits you best.
• Once you find one, it’s best that you stick with it.
• EUR/USD is one of the most widely traded pairs.
• However, it doesn’t mean you have to trade in that pair too.
• Trade a lot and determine a pair which works best for you.
• Almost all brokers provide Demo accounts.
• It would be advisable to trade on Demo accounts and build experience first.
• Once you are adept at trading you would realize which analysis tool suits you best.
• Sometimes, combining multiple analysis tools would be more profitable.
• The risks you take, be it half the amount or full, make sure your calculations are correct.
• Remember, with big risks, come big profits.
• However one mistake and such great would be the loss as well.
• Do not blindly trust the brokers; many of them are frauds as well.
• Before you invest in a broker, take adequate details about them.
• Research on the internet for common fraud techniques, to keep yourself aware.
• Once all this is set, now you can safely enter the world of Forex trading with real money.
• Rome was not built in a day. Similarly, you won’t be rich over the night.
• Respect the development; soon you will become a great trader.
• You will make profits no doubt, but be prepared for some losses as well.
• There is no sure –shot way to guarantee profits only.
• Enjoy trading and soon profits would roll in more easily than imagined.
• Once you become a successful trader, try and impart your knowledge to others.
• We forex traders are a small community, try and bring in as many members as possible.
• After all, it never hurts to share your knowledge.

Chapter 41

Bidding Farewell to the camp

Bidding Farewell to the camp


Me, the last disciple of Mr. Pippino, tried my best to impart everything that I know, to you campers.


I tried my best to gather every last bit of knowledge I have and I did throw in a couple of improvisations as well, let’s hope I was at least half successful.


A camp is designed to ensure both the physical and mental progression on the said topic.  We have also tried our best to lay out the topics in a format which is easy to read and more importantly, easy to catch.  The emphasis was to present each and every topic in a point based format as it’s easier to remember a few points than a whole paragraph. The topics were presented to aid in gradual foray into more details.


Also, keep in mind, this is not just a random camp, it’s a Forex Camp and it’s an e-Camp as well.


Personally, I feel the greatest advantage of having an e-Camp is that you can keep on visiting it over and over again. If you ever miss out on something, forget a topic, can’t remember a chart, well, just chill out. You know where to find us. Just pay us another visit and regale yourselves with the knowledge once again.


You have learnt the theory of treasure hunting on Forex market. Now let’s blow over this market and become best hunters (traders) possible. To find information about brokers you may visit the Broker’s rating section. While choosing the suitable broker company please remember all the tips I gave you. Trade on Demo accounts, practice, practice and practice more and then come back to us and share your experience and meet fellow campers who are either experienced Forex traders or are just starting out on this trip like you had done some time back.


Having said that, no work is ever perfect and it would apply to our endeavor as well.  Please feel free to let us know of the developments and modifications that we can incorporate to ensure a better experience for all you fellow campers.

ForexCamping social network welcomes you!  Build your Forex community and enjoy your stay with us.


I hope you enjoyed our trip on Forex Jungle. Now let’s utilize our knowledge and become successful and professional Forex traders! Best of luck Campers!!!


Till we meet again!