THE

FOREX TRADER′S HANDBOOK

P ROVEN FOREX TRADING BASICS , TIPS & TRICKS TO CREATE POSITIVE & LONG-LASTING
RESULTS FOR BEGINNERS , ADVANCED TRADERS OR ANYONE STRUGGLING WITH FOREX
TRADING

KOTNIK ZAN
Copyright © 2015 by Kotnik Zan.
http://www.kotnikzan.com

All Right Reserved.

No part of this publication may be reproduced, distributed, or transmitted in any
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mechanical methods, or by any information storage and retrieval system without
the prior written permission of the publisher, except in the case of very brief
quotations embodied in critical reviews and certain other noncommercial uses
permitted by copyright law.
Disclaimer: Trading any financial market is risky so please do you own due
diligence. Do not trade money you can’t afford to lose. This book is for
educational purposes and not meant as specific financial advice.
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TABLE OF CONTENTS
DEDICATION
INTRODUCTION
3 STEPS TO BECOME A PRO FOREX TRADER
Step 1: Learn The BASICS
Chapter 1. What Is Forex
Chapter 2. Why You Should Trade Forex
Chapter 3. Only 4 Things You Need For Your Forex Trading
Chapter 4. What Is Currency Pair
Chapter 5. Groups Of Currency Pairs
Chapter 6. Long Or Short
Chapter 7. What Is Pip
Chapter 8. What Is Spread
Chapter 9. Margin And Leverage
Chapter 10. Lots
Chapter 11. MetaTrader 4
Chapter 12. Types Of Orders
Chapter 13. 2 Ways To Trade The Markets
Chapter 14. Trading Styles
Chapter 15. Technical Analysis
Chapter 16. Types Of Charts
Chapter 17. Support And Resistance
Chapter 18. Trading System
Chapter 19. Trading Journal
Chapter 20. Trading Plan
Chapter 21. How To Calculate The Risk
Step 2: Know The Right MINDSET
Chapter 22. 12 Habits Of Successful Trader
Chapter 23. 14 Common Mistakes To Avoid In Your Trading
Step 3: Find Yourself A Trading Mentor
Chapter 24. It’s Your Turn To Continue
About The Author
DEDICATION
I AM DEDICATING THIS BOOK TO MY FAMILY, FRIENDS AND ALL THE READERS
FOR THEIR PASSION TO ACHIEVE TRADING MASTERY AND GROW IT INTO A
BUSINESS AND LIFESTYLE.

INTRODUCTION
If you are anything like I was many years ago, you might be struggling in your
journey to forex trading success. Maybe you want to learn how to trade for an
extra income, trade for a living, or trade for a big fund, but you have no idea what
to do to get started.
Perhaps, like me, you read the Book Rich Dad Poor Dad which changed your way
of thinking and you thought that something different and better must exist that
would permit you to enjoy this life.
Maybe you are not a new to trading, but have failed so many times that you are
wondering if it′s just you that can’t be successful. Or you are thinking you are
doing something wrong but you can’t identify what.
If this is you (or if this has been you), I can tell you that I’ve been in your shoes.
I’ve struggled to grow my trading business, reading every book or course I could
get my hands on and getting all the advice I could from so-called "experts". I was
like a "mushroom in the rain". All this learning and studying left me confused and
unsuccessful with no results. There were so many different paths to trading
success. It seems my ego was big and I believed so-called "experts" who
promised me I can print "Benjamins" from the Day One.
Heck, I remember early days when I even paid $3000,00 for a kind of market
"forecast" software. This I soon realized was just a pure marketing fantasy. I
needed to be honest with myself and accept the fact, that without putting some
time and practice I would not succeed.
In today’s trading world statistics show that 90% of traders are losing money
consistently. What a shocking fact!
But there is a book that answers your burning trading problems in a new and
easy to implement way. The Forex Trader’s Handbook has been designed to
resolve your trading questions and concerns in a concise and easy to read
manner. This book is for people who suffer from understanding the charts,
markets and trading mindset.
Experienced or un-experienced traders and many others who struggle with
trading have already experienced great success by implementing the tips and
tricks found in this helpful guide.
Tomek says: "Definitely a must read for every beginner but also advanced traders
can refresh the basics of investing!"
Tina says:"It's very well written and a must read for every beginner!"
Edward says: "This Ebook has a lot to say that will help any struggling or brand
new person in trading the Forex Market. Take the time to read this and actually
follow the advice given because it was written to actually "HELP YOU" not just to
make a quick $buck off you. Zan the author is for real if you have questions
contact him be patient and wait for an answer. Show him the same courtesy you
would expect. His success can be your success if you want it and he will do his
best to help you."
Marc says: "This book succeeds in giving every new trader and failing trader the
information they need to become successful. It's a great point to start to learn
about the world of forex trading. If I had had this book 5 year ago I would be in a
better place now. By the way I also noticed Zan also produces a weekly video on
You tube on what to look for in the week ahead. Again very simply explained. I
keep this book for reference when I trade to remind me of things I should and
should NOT be doing."
Silvia says: "Forex trading and the financial worlds has - up until now - been
something which seemed way to complex and risky to ever get started in. This
book was really eye-opening in that it show how anyone can get make money
with forex trading. Yes, there are risks involved and ongoing effort is required -
yet by starting small and building knowledge and gaining experience, this can
certainly be something to provide an additional income stream. If you have the
ability to put a little "play" money on the side to experiment, I recommend giving
this a try."
Patrick says: "Learn about the Forex Trading System as well as other key
strategies and discipline to trade with foreign currency. I enjoyed reading this
eBook because it was interspersed with graphics that helps the reader grab and
learn the concept. This eBook is for beginners just like in the title. What you will
take away from reading this short eBook is that anyone can start as a beginner.
To be successful the author recommends you be strict in your discipline and use
the rules he shares in the eBook. I recommend this eBook for beginners in Forex
Trading."
Rick says: "Zan’s guide is a good general starter to pick up terms, and a quick look
at chart analysis. There is nothing under the sun that will ensure a 3000pip day.
But, read this and you will know with a little practice where you missed it in
either the long or the short of it. Pick up on tips from his experience for trigger
points that historically herald rise or fall in short term."
I promise that if you follow the how-to guide below, you will get 3x as much
better trading results as you do at your current level of trading. AND I promise
that you will be at least half-way closer to professional level of trading.
Don′t be the person who misses out an opportunities in life because you take too
long to learn how to trade the markets correctly. Be the kind of person other
people marvel at. Be the kind of person other people see and say, "I don’t know
how they do it." Be the kind of person who takes action and does so immediately.
The trading tips and tricks you are about to read have been proven to create
positive, long-lasting results. Each chapter will give you new insight. Take control
of your life right now, make it successful, and enjoy the new life you′re creating.

3 STEPS TO BECOME A PRO FOREX TRADER
This 3-Step formula to Become a Pro Forex Trader is exact formula that I wished
someone told me when I started in my early days. If I would follow those 3 steps
right from my beginning I would save myself a lot of time, money and effort.
STEP 1 LEARN THE BASICS
As in any other area of life, whether in business or sport, you need to learn the
basics. Do you remember when you were very young and you wanted to try out
playing a football or basketball? In order to understand it, and how it is played
you had to learn it first. Only after that you could master it. It is the same with
trading. Learn the basics before you "get-the-right" to become a pro.
STEP 2 KNOW THE RIGHT MINDSET
In order to master the trading business you have to know what are the
characteristics and habits of unsuccessful and successful traders. What the
majority is doing wrong, and what the big traders, players are doing right.
STEP 3 FIND YOURSELF A TRADING MENTOR
You can′t master the live markets and start trading for a living after you have
read a book or watched a video. Only way to master it, is a live trading under your
mentor’s eyes.
STEP 1: LEARN THE BASICS
CHAPTER 1. WHAT IS FOREX
Forex (Foreign Exchange Market) is the most heavily traded financial market in
the world. On each trading day there is for more than 4-5 trillion dollars of
turnover.
Unlike from some other markets, we can make profits on both - rising and falling
markets. Unlike most financial markets that open at the morning hours and close
in early evening, Forex is open 24 hours per day, except on the weekends when
the world banks are closed.
FOUR MAIN TRADING SESSIONS
New York opens at 8:00 am to 5:00 pm EST (EDT)
Tokyo opens at 7:00 pm to 4:00 am EST (EDT)
Sydney opens at 5:00 pm to 2:00 am EST (EDT) and
London opens at 3:00 am to 12:00 noon EST (EDT)
THERE ARE HOURS WHEN TWO SESSIONS OVERLAP:

New York and London between 8:00 am — 12:00 noon EST (EDT)
Sydney and Tokyo between 7:00 pm — 2:00 am EST (EDT) and
London and Tokyo between 3:00 am — 4:00am EST (EDT)
You are probably asking yourself now, why are Forex Market sessions so
important... Because different trading sessions are more volatile than others. As
traders we strive for price volatility, which means that we like to trade during
volatile hours like a London and New York session.
Forex is practically open whole working week which does NOT mean, that we
must be always there and trade it all time. It just means that you can build up
your trading business around time zone of the country you are living in.
And what is even traded on Forex?
MONEY.
Forex/Foreign Exchange Market is very important, because it plays a major role
in determining the global exchange rates. This means the number of units of one
currency pair, which is to be converted, exchanged to obtain one unit of another
currency.
PARTICIPANTS OF THE FOREX MARKET
Banks (Centrals and Commercials)
Financial Institutions
Insurance Funds
Corporations
Traders/Individual Investors
There are two reasons for their participation on Foreign Exchange Market. First
is profiting from the movement of currency pairs, and the second, protection
against the major fluctuations of currency pairs that affects trade with services
and goods.

CHAPTER 2. WHY YOU SHOULD TRADE FOREX
Being a trader is not only a responsibility, a job, but it is also a lifestyle. Anyone
who is ready to invest in his trading a little bit of time, discipline and patience
can achieve that.
To make it clear right from the beginning - trading is not a "get-rich-quick"
business, but it is result of your process, your work. I am telling you that because
a lot of people are thinking just about making some quick profits, money and it
happens, that they ignore the risk and forget the basic rules of their trading
system. Of course if they even have it! That is for me the main reason why 90% of
people are consistently losing - wish for making a quick profits and over-
exposing their trading account with huge risk.
The goal of every trader is to be a successful by consistently growing their
trading account with discipline and patience. Because of that, it is very
important, that everyone starts with the right direction and knowledge.
REASONS WHY YOUR SHOULD TRADE THE FOREIGN EXCHANGE MARKET?
HIGH LIQUIDITY
With more then 4-5 trillion $ daily turnover Forex is the biggest market, which
allowing us to move quickly into or out of position/trade. Not as for example, a
stock market where you have to wait for the right buyer or seller to be found.
OPEN 24 HOURS PER DAY, 5DAYS A WEEK
which means that you can adjust your trading business based on your free time
and the time zone of the country you are living in. Nice, huh?

ACCESSIBLE TO EVERYONE
You can start only with the 200-300$ big trading account, and it is not, as for an
example, like traditional business, where you need a big investment, capital just
to start. Of course those 200-300$ will not make you rich trading, but it is enough
to build up your trading experiences, get confidence and get used to trading on
live account and growing it up slowly.

WORK IS RELAXED
as there is not many main trading pairs (10-20), which means that we do not
have to analyze few 100 products every day.

FREEDOM
because you can perform your trading from anywhere in the world. For that, you
only need a laptop/computer and internet access. One Mojito please!

TRANSACTION COSTS
are very low, negligible in comparison to other markets.
POSSIBILITY
of making profits on raising as on falling markets.
As you can see, there are many reasons why being a forex trader rocks. My
favorite reason, and what caught my interest in trading from the right beginning,
is a freedom. Freedom to design your life on your own terms and have whole
control in your own hands. If you like the quotes, like I do, I bet below quote will
make you think.
“IF YOU DON’T DESIGN YOUR OWN LIFE PLAN, CHANCES ARE YOU’LL FALL INTO SOMEONE
ELSE’S PLAN . A ND GUESS WHAT THEY HAVE PLANNED FOR YOU? NOT MUCH .”

- JIM R OHN
CHAPTER 3. ONLY 4 THINGS YOU NEED FOR YOUR FOREX TRADING
When you start setting up your trading environment, from which you will be able
to trade, is important to know what things and tools you will need. The society
and trading industry is forcing you with the all possible products and services
that will make you happy, better and more successful trader. They are trying to
convince you that more is better. I have to disappoint you. In trading the less is
more. Less clutter means sharper focus on what you are doing in the life and
markets.
Below four things are the only things you need for your trading business.

1) TRADING A CCOUNT AT YOUR FOREX BROKER/BANK

For those who are not familiar yet with what the forex broker is, that’s an
intermediary between the networks of banks, that trades with each other, and
you. The broker will offer you a price of a currency from the banks.
It’s like opening a bank account. It takes a week or two to open it, and some
paperwork. Beside the trading account most brokers will give you access to their
trading platform, from which you will be able to watch the market and trade.

2) STABLE INTERNET CONNECTION

To be able to access to your trading software, you will need internet connection.
It really doesn’t matter what type of it. You can use main home route
connection, home’s WIFI or free WIFI from your local cafe. The way I trade - swing
trading - is relaxed, simple and doesn’t cause stress. Heck, it requires even less
than 30 minutes a day, so you can easily trade from your old laptop and free WIFI.

3) MINDSET
Trader’s mindset is in my opinion at least 80% of trading success. Depends on
statistics, that are showing that less than 5% is making money consistently in
trading, we can agree that problem in mass is mainly in the mindset. That’s one of
the reasons why I’m writing this book. You can be scared and say "Majority is
losing money in trading. I won’t trade." or that fact can motivate you to learn
what the small percentage is doing right and rise above the crowd.
Everything is between you and the markets. You decide and learn by practicing
consistently. You can read 100s of books on trading, you can join 10s of seminars,
but it won’t help you if you don’t work on your mindset by practicing discipline
and patience, understanding the charts and market moves, applying the risk and
money management rules.

4) COMPUTER/LAPTOP
These days you can’t trade without owning a PC or laptop. It was different twenty
years ago when there were no computers, charts and all you needed was a phone
to call your broker and set your orders on the markets. Yes, I wasn’t trading yet
twenty years ago, but I know my friends did start back then and told me how it
was. Don’t wish for those times to arrive again! Times luckily changed and living
the mobile lifestyle is on reach of anyone’s hands. You can bite in the freedom
cake, travel around the world with the laptop in your right hand, connect to the
local Wi-Fi and you have immediately access to your trading platform and eye on
what’s going on world’s financial markets.
Simplicity is your friend. As I’m writing this, there are only three files right now
on my desktop. Trading journal, trading platform, and calculator for calculating
the risk on every trade.
Personally I trade from the laptop. Nothing else. Please don’t be one of those
traders who are literally attached to the markets 24/7 with their smart phone
trading application in their left hand, tablet computer in their right hand, and a
trading computer right in front of them while they listening to CNBC or
Bloomberg TV channel in their background. Please stop here.
You don’t need the most expensive computer, large desk, $2000,00 chair,
expensive monthly-fee market data... you don’t need to buy ten monitors like
some do before they even learn on how to trade. My opinion is, if you know what
you are looking on one monitor that’s more than enough. Personally I went from
two PCs, expensive "forecast" software I bought for $3000 in my early days, and
expensive market data feed, back to the basic PC and broker’s free charting
software.
As a minimalist I agree with saying, the more stuff you own, the more stuff owns
you.

"LIFE IS REALLY SIMPLE, BUT WE INSIST ON MAKING IT COMPLICATED." - CONFUCIUS

Confucius was right. As humans we like to over-complicate our life’s with
unnecessary clutter and things we don’t actually really need. I would recommend
you to de-own those in order to sharpen your focus on your life’s vision and
goals. I am minimalist when it comes to stuff and clutter, and maximalist when it
comes to the opportunity. I believe more in producing rather than consuming.
I turned myself into minimalism around three years ago, when I said enough is
enough. I was feeling like all this clutter around me was holding me back before
reaching my full potential. And to tell you the truth, it was a great decision. You
won’t regret it doing the same.
If you earn more, that doesn’t mean you have to spend even more. Rather save it
for investments, for necessary things, charities and living the life to the fullest
with your close ones. At least 70-80% of the world’s wealthiest people are
investors. What does this tell you? You can work, earn, save and spend, but you
should not. You must work, earn, save and invest. And repeat. Do save, save to
spend. Save, save to invest, and to build a cash-flow first.
Stuff doesn’t matter. Experiences and people you meet matter.
I would encourage you to do the same in your life and trading. Burn, sell, throw
away, donate or whatever you want to do with unnecessary stuff you don’t really
need in your life and trading.
CHAPTER 4. WHAT IS CURRENCY PAIR
As I said before, Foreign Exchange Market plays a major role in determining the
global exchange rates. This exchange rates are presented as a currency pairs
which tell us the number of units of one currency pair, which is to be
converted/exchanged to obtain one unit of another currency.
Currency pair consists from 2 symbols where each symbol have always 3 letters;
first 2 are telling us the name of the country, area, and the third one the name of
the currency that that country have.

Currency pair rate (exchange rate) is the value of one currency expressed in
another currency. If the value of AUD/USD is for ex. 1.1100, this means that 1
Australian Dollar is worth 1.1100 of American Dollar.
MAIN (MOST TRADED) CURRENCIES ARE:
CHAPTER 5. GROUPS OF CURRENCY PAIRS
We know six currency pairs groups. We will take a look on each of those. First
group is Major Pairs, whose pairs contain American Dollar and are most traded.

1) MAJOR PAIRS
EUR/USD
USD/JPY
GBP/USD
USD/CHF
USD/CAD
AUD/USD
NZD/USD

2) EURO PAIRS
EUR/CHF
EUR/GBP
EUR/CAD
EUR/AUD
EUR/NZD

3) Y EN PAIRS
EUR/JPY
GBP/JPY
CHF/JPY
CAD/JPY
AUD/JPY
NZD/JPY

4) POUND PAIRS
GBP/CHF
GBP/AUD
GBP/CAD
GBP/NZD

5) OTHER PAIRS
AUD/CHF
AUD/CAD
AUD/NZD
CAD/CHF
NZD/CHF
NZD/CAD

6) EXOTIC PAIRS
USD/HKD
USD/SGD
USD/ZAR
USD/THB
USD/MXN
USD/DKK
USD/SEK
USD/NOK
Exotic pairs are less popular, they have lower liquidity and bigger "spread"
(difference between buying and selling price - cost of trading).
You are probably asking yourself how many and what pairs should I trade?
That purely depends on what type of trader you are or you want to be (swing, day
trader, scalper) - do you want to trade on higher timeframes or lower
timeframes, how long you hold a position, how much time do you have each day
etc. Trading styles are explained in one of the next chapters.
I personally analyze and trade 28 pairs (except exotic pairs) and it does not take
me more than 20-minutes a day. From my experiences I would recommend you
to start with a 4-5 pairs and you can add lately more pairs. Of course, if you want
to!
CHAPTER 6. LONG OR SHORT
Forex Market has an advantage over some other markets, because it is possible
to create a profit in both rising and falling markets. If you learn to trade in both
market directions, you will have more trading opportunities, as if you would
trade only when markets are rising.
"LONG" -> it means, that we are buying the market, currency
"SHORT" -> it means, that we are selling the market, currency
What we are doing as traders is, that we are buying one currency and selling
other one.
Example:
CHAPTER 7. WHAT IS PIP
Pip stands for the smallest shift in currency pair quotation.
Example:
If the value goes from 1.0000 to 1.0001 that means that price grown for 1 PIP
If the value goes from 1.0000 to 1.0010 that means that price grown for 10 PIPS
If the value goes from 1.0000 to 1.0100 that means that price grown for 100 PIPS
If the value goes from 1.0000 to 1.1000 that means that price grown for 1000
PIPS
This is only for the information. How-ever there is no need to worry, because
most of the trading platforms have "Pip Meter" - you click on the chart with the
mouse, move it and you will immediately see the number of pips - so you do not
need to count and think. Of course, also every price movement for X pips means X
$/€ but that also shows-up automatically in your trading platform. So you do not
need to count that too. Thanks to the technology!

CHAPTER 8. WHAT IS SPREAD
Spread is the difference between selling and buying value of currency pair you
trade. Mostly all quality brokers, where you open your trading account, have
spreads in around the same range. With other words - spread is negligible cost of
transactions, trades.
Example for AUD/CAD (Australian Dollar/ Canadian Dollar). Difference between
selling and buying price is 4,7pips.

When you are choosing your broker, it is very important that you look for the
spreads this broker is offering you for each currency pair. I would like to suggest
you to choose the broker that have spreads for the main currency pairs in the
range from 0-5 pips.
Let me give you a simple example for Switzerland’s broker Dukascopy. As I am
writing this, it′s following average spreads are EUR/USD 0.26pips, GBP/USD
0.86pips, AUD/USD 0.99pips, USD/CHF 1.36pips, GBP/CHF 2.80 .. As you can see,
this broker has spreads in the range of between 0-5pips which is very
responsible and "low-cost" in the trading industry.
You do not want to choose the brokers that are un-regulated, un-known, and with
the huge spreads.
CHAPTER 9. MARGIN AND LEVERAGE
Margin is deposit required to open or maintain a position, trade. The margin is
expressed in %, typically around 0.5% - 2%, which means that if you want to, let′s
say, open 100,000 EURUSD, you need to have at least € 500-2000 on your trading
account.
Leverage simply means that you can trade higher sum than there is your amount
of trading account, which is used only as a margin.
Of course bigger leverage means also that potential profit/loss are bigger, but no
worry -that is why we calculate the maximum risk on every trade and we make
sure we do not risk more than 1-2% of trading account on trade, position.
Leverage is always expressed in the ratio 1 to X.
Example:
If someone have 1000€ worth trading account, and wants to open position worth
100.000 units of currency pair, he will use leverage in ratio 1:100.
If someone have 10.000€ worth trading account, and wants to open position
worth 500.000 units of currency pair, he will use leverage in ratio 1:50.

CHAPTER 10. LOTS
Lot is the size unit you are trading. There are 3 types of lots:

STANDARD LOT = 100.000 SIZE UNITS

Move for 1pip= +/- 10 $
Move for 10pips=+/- 100 $
Move for 100pips=+/- 1000$

MINI LOT = 10.000 SIZE UNITS

Move for 1pip= +/- 1 $
Move for 10pips=+/- 10 $
Move for 100pips=+/- 100$

MICRO LOT = 1.000 SIZE UNITS

Move for 1pip= +/- 0.1 $
Move for 10pips=+/- 1 $
Move for 100pips=+/- 10$
That of course does not mean that we can trade exactly only 1.000, 10.000 or
100.000 units of currency pair. You can trade as much as you can based on the
amount of your trading account and risk, which you calculate on every trade. How
to calculate your risk and position size (lots) is explained in the chapter 21.

CHAPTER 11. META TRADER 4
Meta Trader 4 (MT4) is one of the most popular trading platforms for trading and
monitoring the markets. Most brokers are offering an option to open a free demo,
testing account, so you are able to check and test MT4 before you even try it with
the real money.
Every good forex broker offers MT4 trading platform. It is popular because we
can monitor the markets, customize the charts based on our needs, we have the
important tools we need for technical analysis, trading is simple and quick... so
everything that today′s trader need for a successful trading. I am using it also for
my own trading and chart analysis. And the best of all - it’s free too!
Here is the screenshot of how it looks.

CHAPTER 12. TYPES OF ORDERS
In trading we know many different types of orders. Those that are most
important and most brokers are offering are:
MARKET order
LIMIT order
STOP order
STOP-LOSS order
TAKE-PROFIT order
At the same time let me tell you, that the first three orders are entry orders. Stop-
Loss and Take-Profit are orders that we place together with the one of our entry
orders, and they are our exit orders (when price goes in our way or against it).
Let me emphasize, that you do not have to using all kind of possible orders, but
only those that fit with your trading system - entry and exit rules.
MARKET ORDER is an order for a buy or a sell at the best current price that is on the
market. With that order you enter on the market directly, because you want to
get the best price that is currently possible.

LIMIT ORDER is an order at which you set the price you want to enter on the
market with a better price from a current price. If you want to buy, you would put
a limit order under the current price. If you want to sell, you would put a limit
order above the current price.
STOP ORDER is an order at which you set the price you want to enter on the market
with a worse price from a current price. If you want to buy, you would put a stop
order over the current price. If you want to sell, you would put a stop order below
the current price.

STOP-LOSS ORDER is an exit order, when the position, trade goes against us and
protects us from bigger risk. We can call the Stop-Loss order an APO - Account
Protection Order, because it actually protects us from the bigger lose. Stop-Loss
order (red line) will automatically close our position, when price falls below or
raise above price level.

TAKE-PROFIT ORDER is also, as a Stop-Loss order, an exit order, when the position
goes our way. That means that Take-Profit order (green line) will automatically
close our order or part of our position when it will be in profit.

Those who already trade as we knows, that we like to split the trade into more
positions and that is how we can maximize the profits on winning trades.

CHAPTER 13. 2 WAYS TO TRADE THE MARKETS
In trading we know 2 main ways to trade the markets:
Fundamental analysis and
Technical analysis
Fundamental analysis addresses the economic, political and social data. Traders
who trade using these data estimates the economy of each country, area and
determine the future trends.
Technical analysis is based only on the analysis of the charts, which consist of a
period of time and price. Trader than based on that, analyzes the products that he
trades and then determine the entry and exit area.
We, traders who trade based on technical analysis, believe that most of the
fundamental events, data, news are already in the price, chart, and we trade only
based on price. With technical analysis we "study" the trends. On charts we are
looking and waiting for a repetition in the price (patterns), so we can predict the
next possible trend of a price move in a future, as history is repeating most of the
time.
Because most of the professional traders, as me too, swear only on technical
analysis, the next few chapters will be devoted exclusively for your
understanding of the technical analysis.
Since most of the professional traders as me swear on technical analysis, the next
few chapters will be devoted for understanding the technical analysis.
CHAPTER 14. TRADING STYLES
In trading we know many styles of trading. Main three are:
SCALPING
DAY-TRADING
SWING- TRADING

SCALPING
Those are the traders who like more trading action as they are in/out of the
positions very quickly. Scalpers are experienced, fast and they know exactly what
they are looking for. Knowing the trading system rules, following them 100%
with patience and discipline, and having a lot of confidence in yourself and
system.
From the all trading styles Scalping requires a lot of time in front of the PC and
may be, due to this, stressful.

DAY-TRADING
Day traders sit in the front of their PC for a couple hours a day, and watch for
their trading setups. If you have 2-3hours a day, few days a week, then you can do
the day trading, and even combine it with a swing trading.

SWING- TRADING
Swing trader is someone who do not trade against the main trend, and look for a
trading setups in the direction of the major trends, so he can keep his trades open
for a longer time. Swing trader is using higher timeframes for his entries and to
manage his trades.
In my opinion Swing trading is simple and "no-stress" way to trade the markets
and profit from them.
Why "no-stress"?
Because, we do not have to sit in front of the PC for the whole day, or even not
every day, depends on what timeframe you trade. For swing trading you need
only 10-20 minutes a day, so you have a lot of free time and you can trade also, if
you have many other obligations.
If you trade as a swing trader, you will not find trades every day. This is also the
nice thing about swing trading. With a good and detailed chart analysis you will
be able to make hundreds or even thousands of pips per trade in a good trending
markets.
From my trading experiences I swear only on swing trading because it is relaxed
way of trading, and I like to see the bigger picture and trade in the direction of the
major trends as majority of big traders and institutions are doing so too. Swing
trading also have, from my experiences, highest strike rate (win %) over the long
run…

CHAPTER 15. TECHNICAL ANALYSIS
As I mentioned before we are using technical analysis for analyzing the price
movements over the time. When we learn to read the price action we can
determine the market trends and based on that determine the entry and exit
area.
Technical analysis can be used on any market, product. A lot of people is making a
mistake here, because they over-complicate and they think they will read the
charts better and more successfully, with putting a lot of indicators on their
charts. At that time they simply forget for a Price, which is always correct and it
will always shows us the right market direction.
We, traders who trade based on technical analysis, believe that most of the
fundamental events, data, news are already in price, chart, and we trade only
based on price. With the help of technical analysis we "study" the trends. On the
charts we are looking and waiting for repetition in price (patterns), so we can
predict the possible next trend of price moving in future, as history is repeating
most of the time. Of course no trader is always 100% right in their decisions, but
we are following our trading edge to stack as much odds as possible in our favor
(confluence).
How to use price analysis to determine the market direction?
It is simple. You do not need any magic indicator to determine market trend.
THREE MARKET DIRECTIONS
U P-TREND
We have an uptrend when the market is making Higher Highs and Higher Lows.

DOWNTREND
We have a downtrend when the market is making Lower Lows and Lower Highs.
R ANGE ( WHEN THERE IS NO TREND)
We have a range when we do not have any trend. That means, the market is
moving between 2 zones - Support and Resistance (17th chapter), and the
market does not create Higher High and/or Lower Low.
And when do we know that the trend has started changing its direction?
We know that when the chart starts showing us signs of the possible change -
lower low in uptrend, higher high in downtrend and higher high/ lower low in the
range.
CHAPTER 16. TYPES OF CHARTS
What is the chart? Charts are generally showing us human psychology, because
all price activities that are going on the markets, can be plotted on a chart. Charts
are basically showing us the behavior of market participants.
We read the chart from left to the right, and it is composed from 2 things: Time
Period and Price.

Why we have to read the charts?

Because the chart reading is necessary basic of the technical analysis and only
that way, we can understand the price movement in past and future.
In trading we know many different types of the charts. We will take a look on four
that are most popular:
Line chart
Bar chart
Candlestick chart and
Heikin-Ashi chart
LINE CHART is one of the easiest charts for the eye. It shows us only the last, closed
prices at which currency pair, product was traded. Bad thing about the line chart
is that shows us a lot of less information than the others do.
BAR CHART is a chart, where each bar shows us, represents a single
period of price movements, time unit, open, close, higher and lower
price of that trading period. If we check the Daily chart below, each bar
present ONE trading day, and it is the same for the other time frames.

CANDLESTICK CHART shows the same information as a Bar chart, but it is nicer on
the eye, as it shows us also a body and the color which tell us, whether there were
more buyers (green) or sellers (red) in that trading period.

HEIKIN-A SHI CHART - is also part of

our trading method and therefore, I am using it also for my own trading. It looks
similar to the basic candle stick chart, but it is a little bit different in method of
calculating the candles.
If we compare all four above mentioned charts, the difference is obvious.

CHAPTER 17. SUPPORT AND RESISTANCE
Support and Resistance means the level of demand and supply.
Support on a product is a level of the price, at which on the market there is more
demand over supply. This causes that the currency pair stops and increase.
Resistance on a product is a level of the price, at which on the market there is
more supply over demand. This causes that the currency pair stops and drops.
As a traders we have two tools for drawing support and resistance levels on the
charts:
Horizontal line (for horizontal level of support and resistance)
Trend line (for a trend, when we have higher/lower highs/lows)
Screenshot from trading platform Meta trader 4:

EXAMPLE U PTREND
When we have a higher highs and higher lows we are drawing support line -
connecting the lows.

EXAMPLE DOWNTREND
When we have lower lows and lower highs we are drawing resistance line -
connecting the highs.

EXAMPLE R ANGE
Market does not create higher high/lower low. We use horizontal line and
connect the previous highs and lows.

And why are those areas of the support and resistance so important?
Because we expect there a price breakouts and bounces due the large sums and
number of orders there. Why? Because most of the professional traders, who
trade for funds, banks, countries are looking for the areas of support and
resistance, and then they are entering on those areas in and out of the trades
with a large sums of capital.
When we expect bigger price breakouts or bounces we have to be focus, and
watch for our trading setups, entries. And that is where the trading system, edge
is very important!

CHAPTER 18. TRADING SYSTEM
Trading system, strategy is one of the 3 key factors which constitute a successful
trader, who must master a powerful trading system. Why? Because he is aware,
that he can trade successfully only, if he knows exactly what to look on the charts
and how to manage a position, when it moves in his way or against it.

WITH THE TRADING SYSTEM YOU WANT TO ACHIEVE THE FOLLOWING:

To simplify the chart analysis
To minimize the losses and maximize the profits and
To minimize the trading with emotions (to grow you discipline and
patience)

THE TRADING SYSTEM SHOULD BE CLEARLY COMPOSED FROM THE FIVE THINGS:
When to enter
When to exit
When to take a profits
Where to place a Stop
When to wait
One of the biggest problem I was doing in my early days and unsuccessful traders
are making is that they are always changing their trading system; they have 1-2
unsuccessful trades, and they are already looking for a "better" and "better" and
"better" trading system... and the problem is in their trading psychology, mindset,
because they blame everything on the trading system. It comes to that they
become a confused, they do not have the right information, knowledge, they
complicate, and they do not make any step further to successful results.
It is a fact, that no trading strategy will give us 100% winning trades. And not
because our trading system is bad or something, but because the market will do
what it wants and whenever it wants.
That is why we need to stick to one good, powerful trading system, which is
composed from the five above mentioned things, and simply just trade to grow
your confidence and improve your discipline and patience.

IF YOU ARE NOT YET FAMILIAR WITH MY TRADING – IT IS COMPOSED FROM ALL FIVE THINGS
AND IS BASED ON :
Fast identification of trends and ranges
Filtrations of useless price movements, and
Strict and clear Entry, Exit and Money Management Rules
CHAPTER 19. TRADING JOURNAL
Trading journal is your personal document which helps you to move your trading
on a higher level with the results you want to achieve. If you want to be a
professional and enjoy life the trading is offering, then a trading journal is your
must-tool. Trading journal can turn an average trader into very successful one.
Often I see many of new traders who simply do not use it in their own trading. In
my experience there is a connection between many successful traders and a well-
documented trading journal.
Why?
A trading journal is your personal document of your trades. It is a true record of
your success and failures and permits you to revisit the trades and learn from
them. You need to develop a disciplined approach towards your trading and a
journal is not good for you if you are not consistent and you use it for every trade
you take. So that you can learn from your own mistakes and see, what is giving
you the results you want. As a trader you have to focus on yourself and your own
trading!
All successful traders started somewhere... They wanted to become one of those
who are they today. They wanted to be a leader of their own trading. They wanted
to change their bad results into consistent, profitable ones.
And how did they achieve that?
By learning a good trading system, by learning from a already successful trader,
mentor, they traded with discipline, patience and by learning from their mistakes
and trades.
It is the same for example in sport. They have trainings, matches, they are
learning from them, improve themselves, doing what is working best for them,
and get rid of everything else.
How you can make yourself a trading journal?
As you want! What I am doing personally is that for every entry chart I make a
screenshot and paste it into Microsoft Office Power Point program, add a
commentary, and lately paste also a chart from the end result, management of the
trade etc…
It does not take more than a minute, so laziness should not be an excuse!

CHAPTER 20. TRADING PLAN
Beside the trading journal, trading plan is a second most important tool for a
trader. As there are rules for employees in companies, it is the same here.
Trading is your personal private business. That means you have to create
yourself your own personal trading plan and follow it - you can’t just change it
every day.
Trading plan should be a simple and clear with the important information only. A
lot of traders complicate and they make ten pages long trading plans, and they
simply cannot follow it. That is why your trading plan should not be more than
one, two pages long.

THE MOST IMPORTANT THINGS YOU MUST INCLUDE IN YOUR TRADING PLAN ARE:
Daily trading routine
Entry rules
Exit rules
Money Management rules
Your trading style
Markets/pairs you will trade
(personal rules/notes)
ex. "Follow my tr. rules" or "Trade with a trend" ...
Because you can say "That is the best trading system and it is perfect", but if you
do not follow your trading plan and you do not trade the all setups based on your
trading plan, it can still be a failure.

IT IS NOT A MISTAKE FROM BROKER, MARKET OR TRADING SYSTEM, BUT THAT YOU CAN′T
FOLLOW YOUR OWN TRADING PLAN .
That means you have to plan your actions, your trading style, your time, routine,
markets you will trade,... Trading plan is your own personal business plan and
your daily guide to trading success! So make it and follow it 100%.

CHAPTER 21. HOW TO CALCULATE THE RISK
As traders, we never think about placing, entering in the trade without knowing
where to place our Stop-Loss order, which protects us from bigger risk in case
the market wants to go against us. Successful traders are only those, who
successfully manage their trading risk. On the first place, a trader wants to
protect his money and then minimize the losses and maximize his profits.
Managing the risk is in my opinion one of the key factors for growing your
trading account. As someone already told in past:

"IT DOES NOT MATTER IF YOU HAVE RIGHT OR NOT, BUT HOW MUCH
YOU MAKE WHEN YOU ARE RIGHT AND HOW MUCH YOU LOSE WHEN
YOU ARE WRONG."
In my opinion the Money Management makes a trading less stressful and it is also
a difference between success and failure. That is why calculating the risk on every
trade is a crucial!
I am using this calculator. It is very simple to use.
In case you do not know how to use it, contact me and I will help you.
STEP 2: KNOW THE RIGHT MINDSET

CHAPTER 22. 12 HABITS OF SUCCESSFUL TRADER
Statistics show that around 90% of traders are losing money consistently. Which
means they are missing or not trading consistently with the right trading
method, money management and/or mindset.
You have to ask yourself what a top few percentage of traders are doing right and
differently from the crowd. Do not do what the majority is doing, but what the
elite and big traders are doing.
You do not become a successful trader over the night, but with a consistent
discipline, patience and practice to get the necessary experiences.
Successful trading is in my opinion the result of three factors:

The result of practicing the all three factors is a successful trader with consistent
profits.

HABITS OF SUCCESSFUL TRADER ARE:
To become a successful trader you must master one strong trading
strategy, which comes with a strict entry and exit rules. On markets you
can only survive and succeed, if you know exactly what you are looking on
the charts and how do you manage a position, when it goes your way or
against it.

Trading system is your daily guide for success. Trading system rules protects
us from bigger mistakes, which can destroy our confidence and trading
account.

ACTION STEP: MASTER ONE STRONG TRADING STRATEGY. MAKE YOUR OWN ( TAKES A
LOT OF TIME) OR FIND YOURSELF A TRADING MENTOR TO TEACH YOU THE ONE HE IS
USING.
To become a successful trader you must have and follow your trading plan.
Before you even think of placing any orders on the market, you have to
know what products you will trade, how much you will risk on a trade,
what is your daily trading routine, how you will manage the trade etc.

ACTION STEP: CREATE YOURSELF A TRADING PLAN AND START FOLLOWING IT FROM
TODAY !
To become a successful trader you must managing the risk on every trade.
Without excuses always calculate the risk and place your Stop-Loss order
because we know Stop-Loss actually protects you from bigger lose. I
explained the type of the orders in one of the chapters above, but to make
it clear right now: We place Stop-Loss order when we enter in the trade. It
is the difference between your entry and exit price, if your trading
position moves against you.
ACTION STEP: START MANAGING THE R ISK ON Y OUR EVERY NEXT TRADE A ND
A LWAYS PLACE Y OUR STOP- LOSS ORDER.
To become a successful trader you want to protect your money, trading
capital first, and minimize your losses and maximize your profits on long
term. As a successful trader you plan your trading for +10-20 years and
without strong Money Management you will not survive so long.

Strong Money Management in combination with some strong entry and

exit rules are in my opinion crucial for consistent grow of your trading
account.

ACTION STEP: MAKE SURE Y OUR TRADING STRATEGY HAVE STRONG MONEY
MANAGEMENT R ULES!
To become a successful trader you must start using and entering based on
high-time frames. It does not matter what type of the trader you are.
Before you even open any position is important, that you use high-time
frames to recognize the direction of major trend and important price
areas. In case that those are confirming bigger move, you want to leave a
part of your position open for a longer time.
ACTION STEP: A PPLY THE HIGHER TIMEFRAMES TO YOUR OWN TRADING TO SEE THE
BIG PICTURE OF THE MARKETS .
To become a successful trader you must focus on the charts and ignore
analyzing and listening to the news.

ACTION STEP: START FOCUSING ONLY ON THE CHARTS. Y OU WILL BE AMAZED YOU
CAN DO YOUR TRADING WITHOUT WORRYING ABOUT THE NEWS .
To become a successful trader you must start believing in yourself, in
trading system, you must be confident and always trade only based on
your own decisions. Stick only to your trading system rules and trading
plan. Admit that trading is your personal business and take 100%
responsibility for all of your actions.

ACTION STEP: TAKE RESPONSIBILITY AND TAKE ACTION.

To become a successful trader you must have a trading journal where you
record every trade, so you can look and analyze your trades in future, learn
from them and improve your trading.

ACTION STEP: START USING A TRADING JOURNAL!

To become a successful trader you must be organized, simple, relaxed and
also have other hobbies and activities. Understand that you do not have
the control over the markets. Everything you can do is to analyze the
charts, check them few times a day, wait for a possible trading setup,
opportunity and then enter/exit based on your trading system and plan.

ACTION STEP: START BEING RELAXED AND ORGANIZE YOUR TRADING! HAVE ALSO
OTHER INTERESTS IN LIFE.
To become a successful trader you must have a positive outlook on your
life and trading, you must set yourself goals and trying to achieve them no
matter what others are saying or thinking.

ACTION STEP: DO NOT LISTEN TO THE CROWD. SET BIG GOALS AND WORK ON THEM
EVERY DAMN DAY !
To become a successful trader you must apply minimalistic approach in
every area of your trading and life. Keep things as minimalistic as possible
to keep your environment de-cluttered, your mind sharp and focused,
spend minimum time thinking about your next move on the markets, and
 not work harder as a trader but smarter.

ACTION STEP: R EMOVE EVERY UN-NECESSARY CLUTTER YOU DO NOT NEED IN YOUR
TRADING AND LIFE.
To become a successful trader you must start practicing discipline and
patience day after day, week after week, because you know that those two
factors are determining whether you will be successful or unsuccessful on
long term.

ACTION STEP: PRACTICE DISCIPLINE AND PATIENCE WHEN YOU TRADE.

CHAPTER 23. 14 COMMON MISTAKES TO AVOID IN YOUR TRADING
In that chapter I wrote most common fourteen mistakes made by unsuccessful
trader, from my experiences as a trader and mentor.
1. Don′t think trading is a business where you get rich over the night. With
thinking like that you have an extra pressure, forget on your trading
system rules and you start trading with the real money from day one,
without understanding the markets and with over-exposing your trading
account.

2. Don′t forget to manage your trading as a business. Don′t set goals that
are too low and just want to make "quick, fast small profits". Organize
your trading, set big and achievable goals for yourself and plan your
trading for a next few months, years further.

Raise your standards, multiply your current goals by 10 times, take a

massive action and really go, do big and leave your mark.

You can be a nails who whine, complain, don’t take a responsibility and
blame the others for their un-success. Or you can be a hammer who go
out and takes what is for him, who takes a massive action and makes a
huge success from what he is doing. That is the only thing that counts in
today′s economy. Who for you is the inspiration, the role model you
would strive for, and the story to admire? The person who have low
standards, living the life in the comfort zone, living from paycheck to
paycheck after he graduated from the college, because parents, friends
said so to do so, and finished it with A4 format white piece of paper
which will not help him in today’s economy... Or the "hammer" who have
a huge goals, takes a massive action every day, walk the talk, dropped-out
from the college to pursue his trading business, became so good at it,
that he started trading and managing a $100million fund.

First example is what the majority is doing. That’s the reason why the top
is so lonely. Change the mindset from the poor to the wealthy. From
consuming to producing. From spending to investing. Do your best every
day, do the building, have a full control of what you are doing, and use the
cash-flow to build your future - invest, reinvest and grow.
 3. Don′t always blame the markets, brokers and/or your trading strategy.
Be a man and take a full 100% responsibility. Be a hammer.

4. Don′t find the excuses to not place a Stop-Loss order (Account Protection
Order!).

5. Rather than always trading based on someone′s trading signals, media,

crowd, listen only to yourself. Unsuccessful traders are in my opinion the
followers, not the leaders. They do not focus on themselves and their
trading, but on what a crowd is saying, thinking and doing.

6. Unsuccessful traders focus on excuses. Start focusing on your success

please! Excuses are responsible for "99-percenters".

7. Day after day they do not practice discipline and patience.

8. If you want to change your trading results, don′t look for a free-advice,
tips on useless forums, books and other wrong sources of information
where the crowd is. Uless you want to trade like majority!

9. They do not master the powerful trading system to understand the price
movement and markets.

10. They trade without a trading plan and trading journal. If you do not know
how to make both, feel free to contact me and I will help you with it.

11. They do not manage their risk. They just "trade", gamble and hope that
the market will move in their direction. Strong Money Management is
unfamiliar to them.

12. Don′t change and jump from one trading system to another, with hope
that you will find a trading strategy with 100% winning trades. Yes, that’s
what the crowd is doing.

13. Without real reason don′t over-think about your trading (business!).
That is how you become the worst enemy to yourself!

14. When the position is going their way or against them, they do not know
how to manage it correctly to minimize their losses and maximize their
profits on winning trades!
STEP 3: FIND YOURSELF A TRADING MENTOR

CHAPTER 24. IT’S YOUR TURN TO CONTINUE
TURN YOUR TRADING INTO LIFESTYLE AND BUSINESS YOU DESERVE

What does this "1%/99%" triangle telling us? It telling us that

only the 1% of the world′s population at the top, is doing the
right things correctly, and "99-percenters" should start doing
those to come from down there.
In order to help You feel free to contact me to book free
10minute strategic call. My purpose is to help you and turn
every struggling, inconsistent, unsuccessful trader into successful trader with
consistent profit, and to build your trading lifestyle and business from the
bottom.
If you want to become a successful trader, fund- manager and live from trading
like I do, it is logical that is impossible without understanding the markets and
movements on live charts and in real conditions!
Trading is enjoying only if you do it correctly! With the right tools and with the
right mindset...
And why some people succeed and some not?
Everything depends on the mindset, trading system they are using and how they
manage with their trades and emotions.
I know it is very big problem, that most of the traders do not have appropriate
training to achieve before mentioned, and that is not something they can learn
from a lot of useless books, or from free advices on forums and websites.
I′m telling you that because I was doing that too, when I started 8-years ago, and
to tell you the truth you do not make any huge process towards a successful and
professional trading.
Only way someone can control himself and his trading is with continuous
training and live trading sessions, from traders who actually are making a living
from trading.
If you want to become a successful trader and enjoy the trading lifestyle like I and
many others do, feel free to contact me and book FREE 10-Minute Strategic call
on skype.

ABOUT THE AUTHOR

I am full-time currency trader, trading mentor, founder of KOTNIKZAN.COM and

the author of The Forex Trader′s Handbook. Learn more about me here.
 Do you NEED HELP?
BOOK FREE CALL

Just to say thanks for downloading my book, I would like

to offer you a
FREE 10-minute strategic call.

CONTACT ME & BOOK IT NOW

Email: info@kotnikzan.com
Skype: kotnikzan