- 3 days ago
Dive into the dynamic world of currency trading with "Forex Uncovered: Your Ultimate Guide to Currency Trading." This comprehensive video takes you on a journey through the intricate landscape of forex markets, demystifying the complex world of currency pairs, leverage, bid/ask prices, long/short positions, margin, PIP, lot sizes, bullish/bearish trends, and much more.
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00:00what's up guys welcome back to the channel in today's video we will be talking about
00:05currency trading i do get a lot of people in the comments just asking me to touch on this subject
00:12a little bit more i know we're predominantly a crypto channel but i just felt i owe this to my
00:19viewers who are really curious about understanding how like the forex markets actually work so this
00:26is what i'll be covering in this video if you like this type of content please do give us a like
00:31and subscribe to the channel make sure you also turn on your bell notifications so you can be
00:39alerted every time we drop a video and also check out the links in the description and don't forget
00:44to head on over to our main site decentralized.news so what is uh the foreign exchange market which
00:52a lot of people call forex in general it is actually the largest financial markets in the world
00:58with the daily volume that actually exceeds some 6.6 trillion as of 2019 in the forex market actually
01:07does dwarf the equity markets stock markets but what exactly is of this forex trading and how can
01:14you become a part of this fascinating world so this is what we'll be exploring in this video just
01:20touching on some of the essential terms that you need to understand the concepts put in that
01:26historical context to just give you that a comprehensive understanding so the forex markets
01:32roots actually can be traced back all the way back to say world war one when countries began to shift
01:39from the gold standard and this shift actually allowed currencies to fluctuate leading to the need
01:47for foreign exchange services so the bread and woods agreement which was signed in 1944
01:54fed actually shaped that modern forex market by pegging major currencies to the us dollar and over time
02:02technological advancements have democratized forex trading making it more accessible to individual retail
02:10traders so some of the terminology you guys need to just come to grips with
02:15are things such as currency pairs so a currency pair pretty much represents two currencies being traded
02:22against each other such as a euro and a usd and the first currency is the base and the second
02:29currency is what we call the quote currency another thing you need to want to really wrap your head
02:36around is leverage and the use of leverage especially in forex markets where the leverage tends to be very high
02:43so leveraging actually allows you to control a large position with a small amount of money magnifying your
02:49profits and your losses so it can be a very helpful tool to make a great profit it can also be a very
02:56detrimental tool in terms of you losing your money when markets fluctuate even by small percentages
03:04another thing to understand is what we call bid and ask prices so the bid is the price at which you can
03:11actually sell a currency pay and the ask price is the price at which you can buy and the difference
03:18between those two prices is what is known as a spread so another thing you can also look into is
03:26going short and going long going long means essentially you're buying a currency pay anticipating that it
03:34will rise in value and going short means that you're selling expecting it to decrease in value and we
03:41have to also talk about margin so the amount of money that is needed in your account to open a leverage
03:47trading position where you're trading with more money than you actually have is what we call margin so
03:53you need to have that margin there and pip pretty much stands for percentage in point and it's the
04:00smallest price move that a currency can make you also hear a lot about lot sizes and this is effectively
04:08just the quantity of an asset you're buying or selling so standard mini or micro are a lot of the
04:15common sizes and you also have bullish and bearish terms and trends bullish market is one way
04:25prices are rising and bearish market is when prices are falling and the exchange rates are pretty much
04:33the value of one currency expressed in terms of another currency you also have contracts for
04:40difference or cfds which are pretty much a contract between a buyer and a seller that stipulate the buyer
04:46must pay the seller the difference between the current value of an asset and its value at the contract time
04:53itself and you'll also hear a lot of people talking about stop loss orders and take profit
04:59which are just orders where you sit automatically to close trading positions at a certain level
05:05in order to take profits or close your losses and obviously the profit and loss is just the amount
05:11you've gained or lost in the trade and you also hear a lot about depreciation and devaluation
05:17so depreciation is a decrease in a currency's value due to market forces while devaluation is a deliberate
05:25downward adjustment of a currency's value so we also talk about long positions or long position
05:33a buy and short positions which are sales which are referring to your trade directions there whether
05:39you're betting on a currency pay to increase or decrease in value so there are some strategies
05:44uh and considerations that you should make when you are in the forex market because obviously this
05:49market does offer numerous opportunities but also a lot of risks understanding leverage implementing
05:54your stop losses taking profit and analyzing whether to take a long or short position is also very
06:02crucial if you want to be successful so there are different training strategies like trend following
06:09there's what we call mean revision reversion you also find a lot of people online especially talking
06:15about day trading which can be employed based on the market analysis and your individual risk
06:21tolerance as well so you need to just make sure you're staying up to date with all the economic news
06:27understanding interest rate changes geopolitical events and also just making sure you've got tools to
06:34help you make your trading decisions so ultimately at the end of the day uh the forex market is a very
06:39dynamic complex world it needs a lot of uh understanding in terms of uh the market mechanics and uh the
06:46different strategies you can use to actually uh profit in these markets so whether you're a novice or
06:51seasoned trader you need to stay continuing to learn and uh you know you'll be able to then navigate
06:58these uh sort of uh markets more more you know more effectively but uh maybe i should just talk about
07:06some of the very popular strategies just to expand on what i was talking about when it comes to uh some
07:11of the trading strategies that you can use so you can use things like trend following which is pretty
07:16much a strategy that's aimed uh to capitalize on market trends either uh upward movements or that are
07:22bullish or downward movements that are bearish you can use tools such as moving averages
07:27trend lines momentum indicators and you also find in there are pros and cons so you know
07:35they could be simple to follow but can also lead to significant losses in non-trending markets so
07:41trend following is a strategy that can be good but can also have some major downsides you also hear a
07:46lot of people talking about scalping you know this is a fast-paced strategy that involves making dozens
07:52or even hundreds of trades in one day very popular with day traders trying to profit
07:57from really small price movements so they use tools such as a short time frame charts uh stochastic
08:04oscillators bollinger bands and things like that and you know you can also make quick profits but it
08:11also requires intense focus so it can be very stressful uh you also have people that use like swing
08:17trading it is a very common strategies we use this in crypto as well where you you know trying to catch
08:23those swings in price movements holding positions for several days or even weeks sometimes uh you also
08:29use tools such as support and resistance levels rsis or the macd and of course you know you can make
08:36gains but also requires a lot of patience and understanding of those market cycles if you want to
08:41mitigate the risks there's also something called position trading where you know it's a long-term
08:47strategies where traders hold positions for weeks or months or even years sometimes sort of based on
08:52underlying economic or fundamental factors they use fundamental analysis typically as a tool
08:58also long-term trend lines and economic indicators to make these assessments and you know it's less
09:05time intensive but also requires a deep understanding of global economics and macro conditions and you have
09:10people that use strategies like the carry trade which involves borrowing in a low interest rate currency
09:16and investing in a high interest rate currency profiting from that kind of arbitrage or that
09:21interest rate differential so they use tools like the interest rate trains monetary policy insights
09:27as well and economic stability are also things that inform the trading strategies potentially high
09:33rewards also vulnerable to sudden interest rate changes so very kind of tricky strategies that carry
09:40trade you also have day trading like i said this is probably most popular with a lot of other guys that
09:45you see talking about forex online similar to scalping but with a slightly longer time frame where all
09:52positions are actually closed at the end of the day so they use intraday charts moving averages also volume
09:58indicators and you know it's uh you don't have those overnight risks of course when you're day trading but
10:04obviously requires a significant amount of time and focus so you know if you're under pressure to make
10:10decisions and close your trades within a day you could be rushed to make bad decisions as well you also
10:15have breakout trading which is when you're entering uh market as early as possible after a breakout uh
10:22where the price is moving let's say to the upside and past the resistance area with increased volume using
10:28volume indicators uh supporting resistance lines and things like that uh you know so you can also have
10:35the fibonacci retracement you hear a lot about this utilizing this as a part of technical analysis to
10:41potential retracement levels uh to a price trend uh using the fibonacci retracement tools you can also
10:48use mean revision a reversion where uh you know it assumes that the price will revert to a mean or average
10:55level over time using uh tools like bollinger bands and the rsi you also have high frequency trading which
11:02a lot of our wall street big uh sharks uh use uh or big whales involving sophisticated algorithms to
11:09trade extremely high uh high high speeds uh you know using advanced algorithms and things like that so
11:17many different tools all come with uh different trading styles your risk tolerance also your time
11:22commitments but uh you know these are some of the things that a lot of you guys have been asking me
11:27about i don't really typically talk about forex necessarily but i thought i'd just give you that
11:33a basic uh guide primer so you can kind of get to understand the markets a little bit uh if this
11:40is interesting to you if you want me to talk about some of this stuff a little bit more often leave a
11:45comment and let me know i'll be able to do that also check out the link to g trade gains network which
11:51is a decentralized exchange non-custodial so you don't have to trust a third party with your assets
11:56they also enable you to trade crypto stocks and forex on that leverage trading platform on the
12:02polygon network and on arbitram it's uh fantastic also check out the other links to uh the other
12:08platforms that i like to use if you want to know more about decentralized finance and defy encryption
12:13stuff like that different books that i've written d5 millionaires d5-millionaire.com it's a free
12:19download for you you can also check out uh tokenized trillions if you're interested in knowing about
12:24real world asset organization also blockchain applied if you want to know the distributed ledger
12:30use case applications across different industries our healthcare supply chains retail the government
12:36sector all of that great stuff uh also check out our telegram and our discord server don't forget to
12:41go to our main site decentralized dot news great cryptocurrency exchange reviews d5 platforms
12:48all the free tools that you need to really get your head around all of these markets whether you're
12:54interested in d5 interested in investing trading nfts any of that good stuff go to our main site
13:02i'll see you guys in the next video peace
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