Your Forex Quick Start and Reference Guide
Forex - Foreign Exchange - The price paid for one currency for another currency.
The forex (FX) market is the largest market in the world by daily notional trading volume, which reports estimating the daily turnover in the FX market at $6.6 trillion. That means we see more total purchasing power or value change hands in the FX market than any other asset class in the world on a day-to-day basis. Of course this makes sense, since we're talking about currency after all, and currency is the great medium that connects all world markets.
FX isn't just traded at a single centralized exchange though; there is no "New York Stock Exchange" of the FX world where all transactions take place for a given currency, as no single trading venue has a monopoly on trading FX. Instead, FX is considered an 'Over the Counter' (OTC) product and is traded all over the world. The backbone of the market are the FX trading desks at major international banks (connecting to each other and making up the "interbank" market,) and liquidity providers (firms who do the same function as a bank's FX desk, just without the rest of the bank attached to them.)
As an individual trader, your access to the FX markets will start with your broker of choice. Your broker's job is to connect you to one or more FX trading venues. Given the size and might of the FX market, and its OTC nature, FX trading also has one of the lowest barriers to entry for retail traders around the world. There is no pattern day trading (PDT) rules like we see in the US stock markets, the brokerage industry is highly competitive so the cost of trading is low, and you can typically start an account with just a few hundred dollars (or less, but we will get into recommended account sizes later.)
This low barrier to entry can be a double edged sword. We've seen an influx of scammers and social media 'influencers' presenting forex as an "easy" and "quick" way to get rich. Trading FX, just like any type of trading, carries risks. Anyone trying to get rich overnight by trading FX will likely just end up blowing their account. We need to stress this, and hope with the information you find in this wiki, you will see the scams on social media for what they really are: The social media influencer is only trying to make money off you (referrals, selling courses, mentorship, etc..) They do not actually make money from trading. If they did, they would not bother putting so many hours into a 'lifestyle' instagram with lambos and Gucci, or so many hours randomly messaging strangers on the net. No matter what kind of track record an influencer shows you (doctored and fake images are common, but even trading software can be manipulated to display fake results,) 99.99% of the time they are out to rip you off. Here's a simple logic test: If a social media guru / mentor is showing off how they can turn $100 into $50k in a few weeks, why are they working so hard to get you to fork over a few bucks for mentorship? Or a course? Or to sign up to a given broker or service? Why aren't they just living it up on a beach somewhere?
So with that said, if you are serious about learning this market, and passionate about trading, the info below will help you get started:
Resources
By no means is this a comprehensive list, but any and all resources here have been vetted by professional traders as great resources having contributed to their own respective trader development (especially at the beginning.)
Education and Courses
We do not recommend paid courses in general. You do not need to pay for a course to learn the basics of FX trading. Paid programs typically teach what can be found for free online, or for a very low cost in book format. Paid courses typically hook people on the idea that after they cover the market basics, the student will learn a profitable strategy and be ready to make money from day one. This is simply not the case 99.9% of the time, as most published strategies are not effective. Don't waste your money, and instead consider the free courses or guilds below:
BabyPips School of Pipsology <=START HERE. THIS IS YOUR ENTRY INTO THE WORLD OF FOREX. COMPLETE THE ENTIRE SCHOOL. Despite Babypips being a 3rd party commercial resource, we will give credit where credit is due: Babypips' "School of Pipsology" is a great example of the free and robust forex education you can find online without having to spend a dime.
Lehman Brothers Foreign Exchange Training Manual - Don't let the company name fool you, this is a solid manual and was used to train up institutional traders for many years.
Market Life Trading by Adam Grimes - Specifically the free 22 hour long course on trading in general. Adam comes from a prop trading background and structured his free material around the trader development process common in the prop trading world. The focus is on teaching people how to come up with strategies (observations in the market, testing out ideas, refining, etc...) instead of just trying to teach a system.
Books
Recommended Forex Books for New and Developing Traders - A list of recommended books covering not only the basics, but advanced subjects and trading psychology.
Live Trader Chatrooms
While there are many trading chatrooms that can be found online, most of them are commercial in nature. That is, they are built up around a commercial product or service, or are commercially biased in their existence.
Volatiltiy.RED works closely with one of the cleanest, well moderated, and active online chatrooms in the trading space: FXGears.com's Trading Chat This chatroom serves the following online communities:
- The FXGears.com Trading Forum
- The Reddit extension of the FXGears.com community, /r/forex
- The /r/AlgoTrading subreddit
- The /r/dividends subreddit
So make sure to join us in chat during market hours! FXGears.com's Trading Chat
Economic Calendar
You need an economic calendar. Why? As you will read in nearly every 'intro to forex' resource: news is a catalyst for change and volatility the market, so you need to know when scheduled announcements are coming.
- Tradingview Economic Calendar - TradingView's calendar might not be the best, but you can easily link to currency pairs and have decent charting at your fingertips with TradingView so it makes the list
- Forex Factory Economic Calendar - ForexFactory might be known for their forums, but their real gem is their front page economics calendar. You can expand historical economic data releases, as well as info on what a given economic event means for the markets
News Websites
If you're new to the FX world, it's best not to get caught up in news trading until you have spent some time understanding how news impacts the markets. However, it's a good idea to read through global economic news to see how international trade, economic data, and politics can affect a currency's exchange rate. These news sources will not be time sensitive, but great for reading along and getting a general feel for the fundamentals of the market.
- Reuters Finance - Decent global coverage of FX news
- Bloomberg - Select your desired currency pair, and a news feed will appear on the right side of the resulting page
Other sources such as FXStreet, Forex Live, etc... might have made the list, if not for their heavy commercial bias toward advertising partner FX brokers. We prefer to recommend traditional financial news sources that have a currency section over dedicated sites for this reason.
Forums
Keep in mind that the majority of forum users are going to be other new traders, so take anything you read on such platforms with a grain of salt. However, for idea generation, entertainment, or the like, browsing trading forums can be a good exercise:
- The FXGears.com Trading Community - We work closely with this community and recommend select threads by its founder, Jack Larkin, on trading professionally
- ForexFactory - One of the larger FX related forums on the net
- Babypips - Very newb friendly, but this is a disadvantage as much as it is an advantage
Charting
Desktop/mobile
- TradingView - Great for HTML5 browser based charting and alerts * Use a demo account from a high quality broker, popular retail forex platforms for demo can be found here on FXGears' demo comparison page.
Prop / Scouting Firms
One way to approach the industry instead of opening your own trading account would be trading for a prop firm. We have a great writeup about forex Prop / Scouting firms here. - We worked closely with the industry experts at FXGears.com to bring you this info.
Virtual Private Servers (VPS)
If you're going to run Expert Advisers (EAs) or your own custom code to trade, you'll want to do so on a reliable computing platform. A VPS for trading will typically be managed, have good latency between the VPS provider's network and your broker's trade servers, and will always be running and connected. Considerations and overview of recommended VPS providers.
Tick Data for Backtesting and Algo Trading
If you're using a backtesting suite, such as ForexTester, TickDataSuite, MetaTrader, BuildAlpha, etc..) or your own custom written backtest code, you'll need a source of price data. The following section of our wiki will provide instructions on how to extract tick level forex data from multiple sources: HOWTO get free Forex Tick Data for backtesting.
Paid Resources
Education
The vast majority of sites charging you for FX trading courses and education are scams or ripoffs. It is highly advised that you avoid such paid courses / sites / programs.
News Wires
These can be expensive and some traders swear by them but they are not required to trade profitably.
Bloomberg Terminal: Price is estimated at USD $20,000/yr.
Reuters Eikon: Price is estimated to be $3,600-$22,000/yr depending on set up.
Dow Jones NewsWire: Price is estimated at $1,440 per year.
Squawk Services
Typically cheaper than newswires. Live running commentary on news events. Slight delay compared to wires.
*Other "Feeds" and news sources *
Recommended Twitter setup: How to setup Twitter to stream the latest FX and Economic news in 2019 and 2020
Free, but fair warning: Twitter is social media, meaning that not everything posted by twitter members is accurate, timely, or of use. Not only will there be bias in what gets popular on Twitter, but Twitter can often become an echo-chamber if you only follow like-minded traders / sources. Stick to the guide's list of sources for best results as they are news / squawk services and their business is reporting accurately.
Paid Chatrooms
We do not recommend any 3rd part paid chatroom; they are often not worth their costs and are usually part of an up-sell tactic to push more products. (That said, we do recommend the official free /r/forex community chatroom, hosted in partnership with FXGears.com, (which can be found here).
Brokers
YOU ARE RESPONSIBLE FOR DUE DILIGENCE.
There are many factors to consider when choosing a broker but some of the most important factors are regulation, execution quality, and ease of deposit/withdrawals. Being "regulated" on it's own is not a guarantee of protection against bad brokers; often bad brokers will be regulated out of a jurisdiction that has lax rules and weak enforcement, so their marketing team can boast about being regulated while not actually providing much protection to their clients or having much oversight by governing bodies. Consider WHERE, HOW, and by WHO a broker is regulated.
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