Forex Trading Classes
Mentorship Syllabus

What is Forex

Forex, short for Foreign Exchange, is the global financial market where one country’s currency is exchanged for another. Every time you convert money while traveling abroad, you participate in the forex market. Unlike stock markets, forex does not operate from a single exchange; instead, it functions through a global network of banks, institutions, corporations, governments, and retail traders. The forex market runs 24 hours a day, five days a week, because trading moves across different time zones such as Sydney, Tokyo, London, and New York. In forex trading, you are not buying a company or an asset; you are trading the relative strength of one currency against another, aiming to profit from changes in exchange rates.

Currency Pairs and Quotes

In forex, currencies are always traded in pairs because one currency is exchanged for another. A currency pair is written as BASE/QUOTE, such as EUR/USD. The base currency (EUR) is the currency you are buying or selling, while the quote currency (USD) shows how much of that currency is needed to buy one unit of the base currency. For example, if EUR/USD is trading at 1.1000, it means 1 euro equals 1.10 US dollars. If the price rises, the base currency is strengthening; if it falls, the base currency is weakening.

• Majors: pairs involving USD
• Crosses: pairs with no USD involved
• Exotics: a major currency paired with a developing economy currency

Pips, Points, and Value

A pip is the smallest standard price movement in a currency pair and is usually the fourth decimal place for most pairs, such as EUR/USD moving from 1.1000 to 1.1001. For JPY-based pairs, a pip is typically the second decimal place. Brokers often show additional digits called points or fractional pips for more precise pricing. The value of a pip depends on three main factors: the currency pair being traded, the lot size, and the account currency. Understanding pip value is essential because it helps traders calculate profit, loss, and risk before entering a trade.

Lot Size and Position Size

A lot is a standardized unit that measures trade size in forex. A standard lot equals 100,000 units of the base currency, a mini lot equals 10,000 units, and a micro lot equals 1,000 units. Position size refers to how many lots you choose to trade in a particular position. Beginners usually trade micro or mini lots to control risk. Proper position sizing is one of the most important skills in trading because it directly affects how much money you can gain or lose on a single trade.

• Standard lot = 100,000 units
• Mini lot = 10,000 units
• Micro lot = 1,000 units

Leverage and Margin

Leverage allows traders to control a large position with a relatively small amount of capital. For example, with 1:100 leverage, you can control a position worth $10,000 with just $100. Margin is the amount of money your broker locks as a security deposit to keep the trade open. While leverage can increase profits, it also magnifies losses, making it dangerous if not used carefully. Beginners should always use low leverage and understand that leverage is a tool, not free money.

Spread, Commission, and Slippage

The spread is the difference between the buying price (ask) and the selling price (bid) of a currency pair, and it represents a broker’s primary earning. Some brokers also charge a commission per trade, especially on low-spread accounts. Slippage occurs when a trade is executed at a different price than expected, usually during high volatility or news events. Understanding trading costs is important because they directly affect overall profitability, especially for short-term traders.

Market Sessions and Volatility

Forex is open 24 hours from Monday to Friday, but price behavior changes depending on which financial centers are active. Liquidity (how easily orders are filled) and volatility (how much price moves) tend to rise when major centers overlap.

Typical session blocks (approximate; daylight saving changes times by 1 hour for some regions):

• Sydney & Tokyo sessions: lower volatility for many majors; JPY, AUD, NZD pairs can be more active.
• London session: the most consistently liquid session; strong trend days often begin here.
• New York session: high volatility, especially around US economic releases; trend continuation or reversals are common.

Overlaps (generally the best liquidity windows):

• London–New York overlap: highest liquidity for many majors; spreads can be tight; breakouts and follow-through are common.
• Tokyo–London overlap: shorter, can create pre-London positioning and false breaks.

Practical volatility notes:

• EUR/USD and GBP/USD often expand during London and London–NY overlap.
• USD/JPY can move strongly during London and NY when US yields and risk sentiment change.
• Gold (XAU/USD) often reacts sharply to US data, yields, and risk-off sentiment in New York hours.
• Spreads can widen at rollover (end-of-day), during major news, and during low liquidity.

Beginner Strategies and Workflow

A beginner strategy should be simple, repeatable, and easy to review in a journal. The goal is not to predict every move. The goal is to execute a small set of rules consistently with controlled risk.

Strategy 1: Trend + Pullback + Confirmation (structure-based)

• Higher timeframe bias: identify trend using higher highs/higher lows (uptrend) or lower highs/lower lows (downtrend).
• Mark the most recent swing and a pullback zone (previous structure, supply/demand area, or key moving average if you use one).
• Entry trigger: wait for price to reject the zone and break a minor structure in your favor.
• Stop loss: beyond the swing that invalidates the setup.
• Take profit: next major structure level; consider partial profits if you are new.

Strategy 2: Range Trading (mean reversion)

• Only trade ranges when the market is clearly sideways (multiple rejections at support/resistance).
• Buy near support and sell near resistance, not in the middle.
• Confirmation: look for rejection candles and failure to break the boundary.
• Stop loss: just outside the range boundary.
• Target: mid-range for conservative exits or opposite boundary for full range plays.

Strategy 3: Breakout with Retest (avoid chasing)

• Identify a well-defined consolidation box or key level (multiple touches).
• Wait for a clean break and candle close outside the level.
• Do not chase the first impulse. Prefer an entry on retest of the broken level.
• Stop loss: below/above the retest swing.
• Target: measured move or next higher timeframe level.

A beginner workflow (repeat daily):

• Step 1: Check calendar for high-impact events (avoid trading right before major releases).
• Step 2: Mark higher timeframe trend and key levels (daily/4H).
• Step 3: Choose a trading window (example: London open or London–NY overlap).
• Step 4: Wait for your setup; do not force trades.
• Step 5: Place stop loss and position size based on risk.
• Step 6: Journal: screenshots, reason for entry, and post-trade review.

Minimum rules to keep you safe:

• Do not trade without a stop loss.
• Do not increase lot size to recover losses.
• Stop trading for the day after hitting your daily loss limit.
• Prefer fewer high-quality trades over many low-quality trades.

Order Types

Know how to enter and manage trades using the right order type.

• Market order: execute immediately at current price.
• Limit order: buy lower or sell higher at a set price.
• Stop order: buy higher or sell lower after breakout confirmation.
• Stop loss: automatic exit to cap loss.
• Take profit: automatic exit at your target.

Analysis: Technical and Fundamental

Technical analysis studies price behavior: structure, support/resistance, trend, momentum, and volatility. Fundamental analysis studies the reasons currencies move: interest rates, inflation, employment, growth, and risk sentiment.

• Start simple: one market, one timeframe, one method.
• Do not mix too many indicators. Price structure is primary.
• Fundamentals provide context; technicals define entries and risk.

Risk Management (Beginner Rules)

Risk management is what keeps you in the game long enough to learn. A good strategy without risk control will eventually fail.

• Risk 0.5% to 1% per trade while learning.
• Always use a stop loss.
• Do not move stop loss further away to avoid a loss.
• Set a daily loss limit (example: stop after 2 losses).
• Keep position size consistent with your risk, not your confidence.

A Simple Trading Plan Template

Use a repeatable process. A plan makes your actions measurable.

• Market: choose 1 to 3 pairs you will specialize in.
• Timeframe: define a higher timeframe for bias and a lower timeframe for entry.
• Setup: write exact conditions (trend, levels, trigger).
• Risk: fixed risk per trade and daily stop rules.
• Review: journal every trade with screenshots and notes.

Common Beginner Mistakes

• Overtrading: too many trades, no selectivity.
• High leverage: large size without a plan.
• Revenge trading: trying to recover losses quickly.
• Ignoring news: trading into major data without knowing.
• No journal: repeating mistakes because you do not measure them.

Glossary

• Bid/Ask: the price to sell / the price to buy.
• Spread: difference between bid and ask.
• Liquidity: how easily price can be traded without major slippage.
• Volatility: how much price moves in a period.
• R:R: risk to reward ratio.
• Drawdown: peak-to-trough decline in account equity.