Forex Trading - It's Elementary, My Dear

Building a successful forex options trading and currency trading business starts with a great understanding of the basics of forex trading learned at the elementary levels. Especially for those who are dabbling into forex trading for the first time, learning the basics should be the first consideration to avoid gambling away their money by making uninformed trades just because. Going through the Kindergarten to the 5th Grade levels at the School of Pipsology can prepare the novice forex trader for the rudiments of a successful forex options trading and currency trading business.

It is in the Elementary Levels where the foundation for a strategic forex options trading and currency trading business is laid. Here is an outline of what goes through in the Elementary Levels at the School of Pipsology:

1. Kindergarten - this is where you will learn about the types of trading and the types of charts used to plot market performance.

2. 1st Grade - from the basic charts you learned in Kindergarten, you will now focus on the candlestick chart which is the commonly used chart in forex trading. You will learn about how you can use candlestick charts to see how the market is performing.

3. 2nd Grade - now, you will learn how to plot the support and resistance levels and draw trend lines that you can use to monitor market movements. This is important in timing your forex trading decisions.

4. 3rd Grade - the Fibonacci retracement and extension levels will be introduced to you at this grade level as a way to determine your support and resistance as well as profit taking levels. Reading the swings in your candlestick charts will allow you to apply the Fibonacci levels on your charts.

5. 4th Grade - here's where things start to get exciting. You now will be introduced to moving averages. Either the simple moving average or the exponential moving average will show you how other traders are moving. A skill that you have to master after this point is spotting spikes and fake outs that can potentially cause you to make bad trading decisions. Looking at both long-term and short-term moving averages is highly recommended.

6. 5th Grade - more charts. This time, you will be introduced to a variety of charts that you can use in analyzing market movements. These charts are often analyzed in combination with one another for a better evaluation of the market. Depending on the forex trading style you will eventually develop, you can use one or a combination of Bollinger Bands, MACDs, Stochastics, Parabolic SARs, and Relative Strength Indices.