In the previous post Forex Currency Trading Basics For Beginners – Part 1 we learned what Forex was, how leverage works and and also what to look for in a broker. In this part of the series I will take you though signing up for a demo account with a Forex broker,as well as learning to use the MetaTrader 4 application.

Selecting a Broker

If you remember from the previous post I said that these were the thing we should be looking for in a Forex broker.

  1. What is their average spread per market?
  2. Will the broker charge you a fee to trade?
  3. Are there any subscription costs?
  4. What leverage do they offer?
  5. How long have they been in business for?
  6. How many markets do they offer?
  7. How many servers do they have for you to connect to if one is down for maintenance?
  8. Do they have any special sign up deals available?
  9. What do other people say about their service?
  10. How easy is it to get your money back out again?

One of the ways which I use to determine if a broker is going to be any good, is to see reviews from other people. The website that I most often use for this purpose is Forexpeacearmy.com with their review page.

 

Demo Account

Once I have found a broker that I feel comfortable with, I normally open a demo account with them, first to get a feel for how quickly their servers respond to my requests, plus it also gives me a chance to see their spreads before using any real money.

The broker that I selected to do this demo with is XEMarkets (formerly Trading-Point). They have a no obligation demo account that will give you great insight into the world of Forex Trading. If you are interested in also getting a demo Forex account then please click the banner (Affiliate link) below.

Demo Account Video

I decided that I would take you though how to sign up for a demo account myself, and so I created a video to help you through the process. I hope my Aussie accent doesn’t confuse too many people 🙂

Please note that this video is best seen at full screen

 

Learning how to use the MetaTrader 4 Forex Trading Software

If you followed the video you will now have MetaTrader4 (MT4) installed on your computer and there is a good chance you will have no idea how to use it. I remember the first time I ever tried to use MT4 and I really got confused very quickly. So that you don’t have to suffer the same pain as I did, I have put together another video demonstrating all the common functions of the MT4 software to get you setup and ready to make your first trade.


Please note that this video is best seen at full screen

 

Using MetaTrader 4 to Trade Forex Currencies

OK, so it is finally time to start making money on your demo account. You are probably sick of listening to my voice in the videos by now, but guess what? I have done yet another video to walk you through this process, plus I explain a little bit about candle sticks.


Please note that this video is best seen at full screen

Types of Candle Sticks and Reading Charts

If you watched my last video you will have a basic idea about candlesticks, but there is so much more to know. There are plenty of websites that talk about the different types of candlesticks and what they mean. The best site I found to explain them all is this site.

In the video I talked about Hammers, Shooting stars and Gaps, which I will show in a little more detail here as they are the main candlesticks I use to make my trades.

 

Hammer Candle Stick

Hammers are found after a down trend where the price has fallen fairly significantly and then gets to a point where the sellers run out of steam and then lose control to the buyers. This is signaled by having a small body and a long wick as can be seen in the candlestick at the bottom of the image below. Remember that you should always wait for confirmation of the reversal pattern before entering the trade. In this case confirmation is a large green “bull” candlestick after the hammer.

Hammer

 

Shooting Star

Shooting stars are pretty much the opposite of a hammer and they can be found at the end of an uptrend. The candle stick will be at the highest point of the uptrend with the body of the candle stick being significantly smaller than the long wick. If you see a shooting star then that means the buyers have run out of momentum and the sellers are in control of the market. Remember that you should always wait for confirmation of the reversal pattern before entering the trade. In this case the confirmation is a large purple (or red depending on the colors you use) “bear” candlestick after the shooting star.

ShootingStar

 

Gaps

Gaps are difficult to explain, but essentially they are the void between 2 sequential candlesticks. In my experience gaps always get filled (even if it is months or years later…). Gaps are filled when the price movement reaches the point where the gap first began. See the image below for an example.

GAP

That’s all for this part of the series please checkout the third and final part here

 

HorizontalRule

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