Educational materials

What is trading

Trading is the process of buying and selling financial assets on the stock exchange in order to earn on the difference in their price. In simple terms, a trader earns by buying cheaper and selling more expensive (or vice versa, in the case of bearish trading).

Trading is conducted on financial markets, including the foreign exchange market (Forex), the stock market (shares), cryptocurrency and commodity (gold, oil, etc.).

Types of trading: short-term, medium-term, long-term

Short-term trading

Trades are opened for a short period of time — from a few seconds to a few hours. This style requires high concentration, quick reaction, and constant monitoring of the chart.

Medium-term trading

Positions are held for several days to weeks. The main emphasis is on technical analysis and news background. A medium-term trader analyzes trends and entry points to enter the market on the wave of stable price movement.

Trading is conducted on financial markets, including the foreign exchange market (Forex), stock market (stocks), cryptocurrency, and commodity (gold, oil, etc.).

Long-term trading

This is closer to investing. Positions can be held for months and even years. The basis of the strategy is fundamental analysis: analysis of companies, industries, and the global economy. Suitable for those who are not ready to spend a lot of time on charts.

Assets: currencies, stocks, cryptocurrencies, indices, raw materials

Currencies

Currencies are traded on the Forex market. Currency pairs such as EUR/USD, GBP/JPY are involved. This is the most liquid and accessible market. It has high execution speed and 24/7 trading.

Stocks

Buying and selling shares of companies such as Apple, Google, Tesla. Income is generated by the growth of stock prices or dividends. Stock trading is popular among both long-term investors and short-term traders.

Cryptocurrencies

Digital assets such as Bitcoin, Ethereum, Litecoin. They are characterized by high volatility, which makes them interesting for active trading. Trading is available 24/7.

Indices

Reflect the general condition of a group of stocks. For example, the S&P 500 index includes the 500 largest US companies. If the index grows, so do the prices of most of the shares included in it. Suitable for trading the direction of the market as a whole.

Commodities

Physical demand goods: oil, gold, silver, gas, wheat, etc. Often used during periods of market instability as “safety assets”.

Supply and Demand Principle

Currencies

The market moves according to the basic economic principle: supply and demand.

Demand is the willingness and desire of participants to buy an asset.

Supply is the willingness and desire to sell an asset.

When demand exceeds supply, the price rises – more people want to buy than sell. When supply exceeds demand, the price falls – there are more sellers than buyers.

This balance is constantly changing, and it is because of this that the price moves. Traders analyze supply and demand to predict where the price will go in the future.

What is liquidity?

Liquidity is an indicator of how quickly and with minimal losses you can buy or sell an asset on the market.

High liquidity = easy to enter and exit a trade, small spread, fast response to orders.

Low liquidity = fewer participants, large price fluctuations, possible delays in order execution.

For example, currency pairs like EUR/USD have high liquidity, while rare cryptocurrencies have low liquidity.

Liquidity is important for a trader because it affects the quality of trade execution and the risk of slippage.

Who are the market participants: traders, brokers, market makers

The financial market is not just a computer system. It lives off of different participants, each of whom plays their own role:

• Traders
• Individuals or companies that buy and sell assets to make money. These can be both beginners and professional traders with large capitals.
• Brokers
• Intermediaries between traders and the real market. They provide a platform for trading, liquidity and technical support. For this, brokers take a commission or spread.
• Market makers
• These are large market participants who constantly post buy and sell quotes. Their job is to provide liquidity. They help avoid sharp price jumps and ensure that there are always active prices on the market.
• Market makers earn on the spread – the difference between the purchase and sale prices.

Placing orders

On the @COMPANY NAME@ platform, placing an order is a quick and straightforward process:

• Selecting an asset — specify what you want to trade (e.g. EUR/USD).
• Determining the transaction amount — specify how much you want to invest.

Selecting the direction:

• “Up” — if you expect the price to rise.
• “Down” — if you predict a fall.

 

• Select the trade time (for FTT) or the stop loss/take profit level (for Forex).
• Confirm the trade – click the button to open the position.

After opening the trade, you can monitor its status on the chart and in the “Open positions” panel.

Setting up charts and indicators

To make informed decisions, it is important to set up the chart correctly. @COMPANY NAME@ provides flexible tools:

Chart display options:

• Linear
• Candlestick (the most popular)
• Bar
• Heikin-Ashi chart

Timeframes:

• From 15 seconds to several days. Selected depending on the strategy.

Adding indicators:

In the “Indicators” section, you can select technical tools, for example:

• Moving averages (MA)
• RSI (relative strength index)
• Bollinger Bands
• MACD

Each indicator can be customized by parameters: period, color, calculation method.

Drawing on the chart:

Trend lines, support/resistance levels, shapes and annotations – for visual analysis and planning

How news affects the market

Fundamental analysis is based on the assessment of economic and political factors that affect the movement of asset prices. The main principle: news moves the market.

For example:

• If positive data on economic growth is published, the country’s currency may strengthen.
• Negative news (for example, a conflict, a crisis, a company’s bankruptcy) can cause a sharp drop in stock or currency prices.
• Unexpected decisions by central banks also lead to strong volatility.

The more important the news, the greater its impact on the market. Therefore, traders closely monitor the chart at the time of publication and often trade on the news.

Economic calendar

The economic calendar is a tool that displays the dates and times of important macroeconomic data and events. It shows:

• Time of publication
• Name of the event or report (e.g. “US unemployment rate”)
• Previous value
• Forecast
• Actual value (appears after the report is released)
• Expected impact on the market (usually indicated by icons: 1, 2 or 3 “bulls”)

Traders use the calendar to:

• Not miss important events
• Avoid entering the market before volatile news (unless it is part of a strategy)
• Build forecasts based on the difference between actual and expected figures

What is important: inflation, interest rates, reports companies

Inflation

This is the increase in the general price level in an economy. If inflation is high, the purchasing power of money falls.

Central banks respond to inflation by changing interest rates. Therefore, inflation reports (for example, the Consumer Price Index – CPI) greatly affect the currency market.

Interest Rates

These are set by central banks (for example, the Federal Reserve in the US, the ECB in the Eurozone). Raising rates usually strengthens the country’s currency, since investors receive more profit from investing in it. Lowering rates weakens the currency.

Traders follow the decisions and statements of central banks to predict the movement of rates.

Company Reports

On the stock market, the price of shares depends on the financial reports of companies. Important to analyze:

• Revenues and profits
• Forecasts for development
• Investments and debt

Strong reports = growth in stock price. Weak reports = decline. Corporate reporting season (once a quarter) is an important time for stock trading.

 

Charts: Line, Candlestick, Bars

In technical analysis, it is important to be able to read charts, because they reflect the price behavior. There are several main types of charts:

Line chart

Shows only the closing price for each selected time interval (timeframe). It looks like a simple line connecting dots. Convenient for a general idea of ​​market movement, but does not provide detailed information about fluctuations within the period.

Candlestick chart (Japanese candlesticks)

The most popular and informative type of chart.
Each candle shows four prices:

• Open
• Maximum
• Minimum
• Close

The color of the candle (usually green or red) helps to visually distinguish between the rise and fall of the price. Candlestick formations provide many signals for entering the market.

Bar chart (OHLC)

Similar to a candlestick chart, but different in appearance. Each bar also displays the open, high, low, and close. More often used by experienced traders.

Support and resistance levels

These are the key elements of technical analysis:

Support is the level at which the price usually stops when falling and bounces up. Demand increases here.

Resistance is the level at which the price often turns down when approaching. Supply increases here.

These levels are formed based on past highs and lows. They help determine:

• Where to open trades
• Where to set stop-loss and take-profit
• Potential reversals or breakouts

Level breakout is a signal for trend continuation.

Level rebound is a signal of possible reversal

Trends and channels

Trend is the general direction of price movement:

• Uptrend is a series of higher lows and highs.
• Downtrend is a series of lower lows and highs.
• Flat (sideways trend) is the price moving in a narrow range without a clear direction.

Trends are the basis for building trading strategies. “Following the trend” is one of the main rules of trading.

Price channels

These are the ranges in which the price moves:

• Upper channel border = resistance
• Lower channel border = support

Channels help to determine entry and exit points, especially in trend trading.

Moving Averages (MA)

Moving Average is an indicator that smooths out price movements over a selected period of time. It helps determine the overall direction of the market and filter out “market noise”.

Types of MA:

SMA (Simple Moving Average) — average price over a selected number of periods.

EMA (Exponential) — gives more weight to recent values, reacts faster.

How to use:

• When the price is above the MA — the trend is up.
• When the price is below the MA — the trend is down.
• The intersection of two moving averages (for example, the fast one crosses the slow one from bottom to top) — a buy signal.

RSI, MACD, Stochastic

RSI (Relative Strength Index) measures the strength of price movement and shows whether the asset is in the overbought or oversold zone.

RSI range: 0–100

• 70 and above — overbought (possible reversal down).
• 30 and below — oversold (possible reversal up).

RSI works well in sideways (flat) markets when the asset moves in a range.

MACD (Moving Average Convergence Divergence)

MACD measures the difference between two moving averages (usually EMA 12 and 26) and helps to determine the strength of the trend and possible entry points.

Components:

• MACD Line
• Signal Line
• Histogram

Signals:

• MACD Crossover and the signal line from bottom to top = a buy signal.
• Crossing from top to bottom = a sell signal.
• The histogram shows the strength of the signal.

Stochastic Oscillator

The stochastic shows how close the current price is to the price range for the selected period. It also determines overbought and oversold.

Range: 0–100

• Above 80 is overbought.
• Below 20 is oversold.

When two stochastic lines intersect in these zones, this is a potential signal to enter a trade.

Combining indicators

A single indicator rarely gives a 100% accurate signal. Therefore, experienced traders use combinations:

• MA + RSI — helps to identify the trend and choose the entry point.
• MACD + stochastic — a good set for determining momentum and reversal.
• MA + MACD — confirmation of the trend and signal strength.

It is important not to overload the chart. It is optimal to use 2-3 indicators, each of which is responsible for a different aspect: trend direction, momentum strength and entry point.

Asset Selection

Before opening a trade, it is important to select the appropriate asset. The @COMPANY NAME@ platform offers:

• Currency pairs (e.g. EUR/USD) are the most popular and suitable for most strategies.
• Cryptocurrencies (BTC, ETH, etc.) are subject to high volatility.
• Stocks are suitable for those interested in companies and fundamental analysis.
• Indices and commodities (gold, oil, Nasdaq, etc.) are often used to diversify a portfolio.

Choose an asset based on its liquidity, market activity time, and your own trading strategy.

Setting the amount, stop loss, and take profit.

After selecting an asset, you must specify the transaction parameters:

• Transaction amount
• This is the investment size. It is not recommended to risk more than 2-5% of the deposit in one transaction – this is the basic rule of risk management.
• 2. Stop Loss
• This is the level at which the transaction will automatically close with a loss if the market goes against you.
  Example: you bought an asset at 1.2000, set a stop loss at 1.1950. If the price falls to 1.1950, the transaction will close and the loss will be limited.
• Why is it needed? To limit losses and avoid strong drawdowns.
• 3. Take Profit
• This is the level at which the transaction will automatically close with a profit.
  Example: you bought at 1.2000, set a take profit at 1.2050. When the price reaches this level, you will lock in your profit.
• Why is it needed? In order not to miss out on profits and automate trading.

Analysis of real examples of trades

Example 1: Buy/Long trade

• Asset: EUR/USD
• Trend: ascending
• Stocks — suitable for those interested in companies and fundamental analysis.
• Entry: at 1.1000
• Stop-loss: 1.0950 (50 points down)
• Take-profit: 1.1100 (100 points up)
• Risk/reward: 1:2 — good ratio

Result: Price reached 1.1100 — take profit worked, profit locked in.

Example 2: Sell/Short deal

• Asset: gold
• Signal: bearish engulfing candlestick pattern + RSI above 70
• Entry: 1980
• Stop loss: 1990
• Take profit: 1960
• Take profit: 1.1100 (100 pips up)
• Risk/reward: 1:2 – good ratio

 

Strategy “Rebound from the level”

The essence of the strategy:

We open a deal on a rebound from the support or resistance level, expecting that the price will not break through this level, but will reverse from it.

How it works:

• Find a strong level (where the price has already reversed more than once).
• Wait until the price approaches the level again.
• Look at the candlestick pattern (for example, “hammer”, “engulfing”).
• Enter a trade on a reversal.

Example:

• The price reached the support level at 1.1000 and formed a candlestick with a long lower tail → a buy signal.

Recommended tools:

• Levels, candlestick patterns, RSI (to confirm oversold).

“Breakthrough” strategy

• Open deal at the moment of level breakout, expecting that the price will continue to move in the direction of the breakout.

How it works:

• Find an important level that the price tests several times.
• Wait for a powerful candle that breaks through the level.
• Confirmation by volume or indicator (for example, MACD).
• Enter in the direction of the breakout.

Result: The price reached 1.1100 — take profit worked, profit fixed.

Example:

• The price tested the resistance at 1.2000 several times, and finally broke through it with a powerful candle — buy entry.

Recommended tools:

• Levels, MACD, volumes, candles with a strong body.

RSI + moving average strategy

The essence of the strategy:

• Combine the RSI and MA (moving average) indicators to find the entry point.

How it works:

• Set the RSI (14) and moving average (for example, EMA 50).
• If the price is above the MA and the RSI is below 40 → a buy entry is possible (on rollback).
• If the price is below MA and RSI is above 60 → possible entry to sell.

Example:

• The price is in an uptrend, but RSI went below 40 → the rollback is over → entry to buy.

Recommended instruments:

• EMA 50 or 100, RSI (14), levels.

The “Follow the trend” approach

The essence of the strategy:

• We do not fight the trend, but enter in its direction after rollbacks.

How it works:

• We determine the direction of the trend (by moving average, trend line).
• We wait for a rollback to the level or MA.
• On the confirmation signal (candle, indicator, figure) – enter the market.

Example:

• EMA shows an upward trend, the price rolls back to the MA and forms an engulfing candle upwards → entry to buy.

Recommended tools:

EMA, trend lines, RSI, Fibonacci levels

How Much to Risk Per Trade

Risk is the amount you are willing to lose on a single trade if the market goes against you. Risk control is the key to long-term success.

• The optimal risk per trade is usually between 1% and 2% of your trading account.
• If you risk too much, one bad trade can wipe out your account.
• If you risk too little, your profits will be slow and less noticeable.

Example:

If you have $1000 in your account, then 2% risk is $20. This means that if your stop loss is triggered, you will lose $20 at most.

The 2% Principle

This principle means that you do not risk more than 2% of your total account on each trade. This helps:

• Preserve capital even with a series of failures.
• Stay in the game and have resources for subsequent transactions.
• Promotes psychological stability – less stress and pressure.

How to calculate:

• Determine the distance to the stop loss in points.
• The lot size/transaction amount is calculated, in which the maximum loss will not exceed 2% of the deposit.

How to avoid draining the deposit

To avoid losing all your capital, follow these rules:

• Set a stop loss in each transaction – this is your insurance policy.
• Do not risk more than 2% per transaction.
• Do not increase risks after a series of losses – this is a common mistake beginners.
• Use adequate leverage – too much leverage increases risk.
• Plan your trades and stick to a trading plan – don’t be impulsive.
• Psychological control – don’t give in to emotions, discipline is more important.

Fear and Greed: How They Get in the Way

Fear is one of the strongest emotions that makes a trader exit trades too early or not enter the market at all. It causes indecision and loss of opportunities.

Greed is the desire to get the maximum profit in one trade. It leads to holding a position for too long, ignoring stop loss and taking excessive risks.

Both emotions lead to mistakes:

• Prematurely exiting a profitable trade (fear of losing profit).
• Holding a losing position, hoping for a reversal (greed).
• Opening trades too often without a clear strategy (impulsivity).
• Helps you stay calm in stressful situations.

Developing self-discipline takes time and practice, but is the key to success in trading.

Keeping a trade diary

A trade diary is a tool for analyzing and improving your trading.

• Write down each trade: date, asset, entry and exit price, profit or loss amount, reasons for the trade.
• Note your emotional state before and after the trade.
• Analyze mistakes and successful decisions.
• A diary helps to identify recurring mistakes and weaknesses.
• Promotes the development of self-discipline and objectivity.

Regularly keeping a diary significantly improves the quality of trading and helps you grow as a trader.

How not to quit after the first mistakes

Mistakes are a natural part of learning how to trade, all beginners make them.

It is important to perceive mistakes as experience and an opportunity to improve, and not a reason to give up.

Learn to analyze your mistakes and learn from them.

Remember: successful traders started from scratch and also made mistakes.

Supporting the community and communicating with more experienced traders helps to stay motivated.

Setting goals

Clearly formulate your goals: financial, educational and psychological.

Goals should be specific, measurable, achievable, relevant and time-bound (SMART).

For example, “increase the deposit by 10% in 3 months” or “learn 3 new strategies by the end of the month”.

Goals help you focus, maintain motivation and give you a sense of progress.

Break big goals into small steps for convenience and control.

Balance Between Trading and Rest

Trading is a mentally and emotionally intense process that requires energy and focus.

Regular breaks and adequate rest are necessary to maintain productivity.

Avoid overwork and burnout to avoid making impulsive decisions.

Plan time for hobbies, sports, and socializing outside of the market.

Balance between work and rest helps maintain a positive attitude and clarity of thought.

Engulfing, Doji, Hammer

Engulfing

• Bullish engulfing — a candlestick that completely covers the body of the previous bearish candlestick. ⟶ A signal of a possible upward reversal after a downward movement.
• Bearish engulfing — a large red candlestick completely covers the body of the previous green candlestick. ⟶ A signal of a downward reversal after an upward movement.

Doji

• A candlestick that has almost no body: opening price ≈ closing price. ⟶ Indicates indecision in the market. If it appears after a trend, it may indicate its weakening or reversal.

Hammer

• A small body on top and a long lower shadow. It appears after a decline. ⟶ A signal of a possible upward reversal.
• The reverse hammer is an inverted form, also indicating a reversal.

How to interpret signals

• Candlestick patterns should be confirmed by volumes, support/resistance levels or other indicators.

It is better not to use candlestick signals alone – combine them with technical analysis.

How to read reports

Keep an eye on the economic calendar: inflation, GDP, interest rates, unemployment, etc. are released.

Important reports: NFP (US), CPI, central bank decisions, company reports (for stocks).

Compare the actual value with the forecast:

• Better than forecast – positive effect.
• Worse than forecast – negative effect.

Volatility strategies

Breakthrough strategy:

• Opening a position in the direction of a sharp move after the news is published.
• Often used with pending orders above and below the current price.

Strategy “on rollback”:

We wait for the market to react sharply, and then catch the return (rollback) to the fair price.

Trading before the news (before the news):

Used when there is a strong expectation of a certain result (for example, the Fed raising the rate).

How to test a strategy

Backtesting (on historical data):

• Check how the strategy would have worked in the past.
• Use platforms with the ability to scroll back the chart or simulators.

Forward testing (on a demo account):

• Real testing on a live market without the risk of losses.

Trade log:

• Write down all parameters and results – this will allow you to analyze the effectiveness.

What to consider when optimizing

Do not adjust the strategy to the past: this can lead to overfitting.

Evaluate:

• Number of profitable and losing trades
• Average risk/reward ratio
• Maximum drawdown
• Resilience to changing market conditions

Your strategy should be:

• Simple and clear
• With specific entry and exit conditions
• With capital and risk management logic