Moon’s
Forex
Starter
Guide”
Learn
Price
Action,
Market
Structure
& Smart
Money
Concepts”
@moon.fx88 on
TikTok.
INTRODUCTION TO
FOREX TRADING
SECTION 1: Introduction to Forex Trading
What is Forex?
Forex (short for foreign exchange) is the global marketplace where
you can exchange one currency for another. For example,
changing US dollars to euros. It’s the biggest financial market in
the world, operating 24 hours a day, five days a week.
Think of it like this: if you've ever traveled to another country and
exchanged your money, you’ve already participated in forex — just
on a very small scale.
Why Do People Trade Forex?
People trade forex mainly to make money. The idea is to buy when
the price is low and sell when it’s high — or do the opposite,
depending on how the market moves.
Here’s why it's so popular:
Accessibility: You can start with just your phone, a broker, and
some capital (even as little as $10 in some cases).
Liquidity: Since trillions are traded daily, you can enter and exit
trades quickly.
Flexibility: You can trade from anywhere — even your bed.
How Does Forex Trading Work?
Forex trading always happens in pairs, like EUR/USD, meaning
you're comparing the Euro with the US Dollar. When you buy
EUR/USD, you're buying Euros while selling Dollars — expecting
the Euro to rise in value against the Dollar.
If EUR/USD moves from 1.1000 to 1.1100, that means the Euro got
stronger, and you’ve made a profit if you bought earlier.
Major Currency Pairs You Should Know:
These are the most commonly traded and have the most liquidity:
EUR/USD – Euro vs US Dollar
GBP/USD – British Pound vs US Dollar
USD/JPY – US Dollar vs Japanese Yen
USD/CHF – US Dollar vs Swiss Franc
These are called major pairs and are best for beginners because
they have lower fees and more predictable price movements.
FOREX MARKET SESSIONS
SECTION 2: Forex Market Sessions
What Are Forex Sessions?
The forex market is open 24 hours a day, Monday through Friday — but it's
divided into four major sessions based on global financial centers. These
sessions affect how active and volatile the market is.
Here are the main ones:
---
1. London Session
Time: 8:00 AM – 4:00 PM (GMT)
Why It Matters: It’s the most active session with high volume and strong
trends.
Best Pairs to Trade: EUR/USD, GBP/USD, USD/CHF
---
2. New York Session
Time: 1:00 PM – 9:00 PM (GMT)
Why It Matters: It overlaps with the London session for a few hours, creating
massive movement.
Best Pairs to Trade: USD/JPY, USD/CAD, EUR/USD
---
3. Asian Session (Tokyo)
Time: 12:00 AM – 8:00 AM (GMT)
Why It Matters: Lower volatility, good for range trading or calm setups.
Best Pairs to Trade: USD/JPY, AUD/USD, NZD/USD
---
4. Sydney Session
Time: 10:00 PM – 6:00 AM (GMT)
Why It Matters: It's the least volatile and usually the quietest session.
Often overlaps briefly with Tokyo session.
---
Best Time to Trade?
The best time is during session overlaps, especially:
London + New York overlap (1:00 PM – 4:00 PM GMT)
This perio
d has the most liquidity, biggest moves, and best opportunities.
BASIC FOREX TERMS
SECTION 3: Basic Forex Terms You Must Know
1. PIP (Point in Percentage)
A pip is the smallest price movement in forex — usually 0.0001 for most pairs.
Example: If EUR/USD moves from 1.1000 to 1.1005, that’s a 5 pip move.
---
2. LOT SIZE
This refers to how much you’re trading. Bigger lot = bigger risk and reward.
Standard Lot = 100,000 units
Mini Lot = 10,000 units
Micro Lot = 1,000 units
Most beginners use micro lots to control risk.
---
3. LEVERAGE
Leverage lets you control a big trade with a small amount of money.
Example: 1:100 leverage means $100 can control $10,000 worth of currency.
Warning: Leverage increases both profit and risk!
---
4. SPREAD
The spread is the difference between the buying (ask) and selling (bid) price.
This is how brokers make money. A small spread is better for you.
---
5. BUY (Long) / SELL (Short)
Buy (Long) = You expect the currency pair to go up.
Sell (Short) = You expect the currency pair to go down.
---
6. SL and TP (Stop Loss & Take Profit)
SL (Stop Loss): The point where your trade automatically closes to limit your loss.
TP (Take Profit): The point where your trade closes in profit automatically.
Example: You buy EUR/USD at 1.1000, set SL at 1.0950 (risk 50 pips), and TP at 1.1100 (gain 100 pips).
---
7. BROKER
A broker is the platform that connects you to the forex market. You open an account with them, deposit
money, and place your trades through their app or website.
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8. Choosing a Broker
Choosing the right Forex broker is essential for your success in trading. Look for the following:
Regulated brokers provide security and ensure they follow the required financial laws.
Low spreads mean you'll pay less in transaction costs.
Fast execution ensures you can enter and exit trades quickly without slippage.
Reasonable leverage lets you trade without taking excessive risks.
Easy deposits and withdrawals are essential for smoothly managing your funds.
Beginner-friendly brokers: Exness, IC Markets, OANDA, and Deriv are popular choices known for their
reliability and low spread
UNDERSTANDING
CANDLESTICK PATTERNS
SECTION 4: Understanding Candlestick Patterns
What is a Candlestick?
A candlestick is a visual representation of price movement over a set period (like 1 minute, 15 minutes, 1
hour, etc.). Each candle shows:
Open – where price started
Close – where price ended
High – the highest point reached
Low – the lowest point reached
If the candle is:
Bullish (green or white): Price closed higher than it opened.
Bearish (red or black): Price closed lower than it opened.
---
Key Candlestick Patterns to Know:
1. Doji
Candle where the open and close are almost the same.
Shows indecision in the market.
Often found before a reversal.
---
2. Engulfing Pattern
Bullish Engulfing: A small red candle followed by a big green candle that engulfs it.
Signal: Possible upward reversal.
Bearish Engulfing: A small green candle followed by a big red candle that engulfs it.
Signal: Possible downward reversal.
---
3. Pin Bar (Rejection Candle)
Long wick with a small body.
Shows price tried to move but got rejected.
Bullish Pin Bar: Wick points down — price rejected going lower.
Bearish Pin Bar: Wick points up — price rejected going higher.
---
4. Morning Star & Evening Star
Morning Star (Bullish): Three-candle pattern — red → small candle → big green.
Signals trend reversal upward.
Evening Star (Bearish): Green → small candle → big red.
Signals reversal downward.
---
Why Candles Matter:
They help you:
•Spot entry
and exit points
•Understand market momentum
•Confirm reversals and continuations
MARKET STRUCTURE & PRICE
ACTION
SECTION 5: Market Structure & Price Action
What is Market Structure?
Market structure is how price moves — and it always follows a pattern. When you understand this, you can predict where
price might go next.
There are three main types of market structure:
---
1. Uptrend (Higher Highs & Higher Lows)
Price keeps making new highs and higher lows.
You should look for buy opportunities.
Example:
HH → HL → HH → HL → HH
---
2. Downtrend (Lower Highs & Lower Lows)
Price keeps making lower highs and lower lows.
You should look for sell opportunities.
Example:
LH → LL → LH → LL → LH
---
3. Range (Sideways Movement)
Price is moving between support and resistance — no clear trend.
Best for scalping or waiting for a breakout.
---
What is Price Action?
Price action is trading based on raw price movement, not indicators. You watch how candles form, how highs and lows are
broken, and how structure shifts.
---
Key Price Action Concepts:
1. Break of Structure (BOS)
When price breaks a previous high or low, it shows a change in direction.
Example: If price breaks a previous higher low, it may start going downward.
---
2. Liquidity
Big traders (banks/institutions) hunt liquidity zones to enter big trades. These are usually:
Below support (sell stops)
Above resistance (buy stops)
You can trade like smart money by entering after liquidity is taken.
---
3. Imbalance (Fair Value Gaps)
When price moves too quickly in one direction, it leaves gaps.
Price often comes back to fill these gaps before continuing the trend.
You can use this for sniper entries.
---
Pro Tip:
Always combine structure + price action + a can
dlestick pattern for the strongest setups. Don’t trade blindly — trade with confirmation.
RISK MANAGEMENT -
PROTECT YOUR CAPITAL
SECTION 6: Risk Management — Protecting Your Capital
What is Risk Management?
Risk management is how you control your losses and protect your account. You can’t win every
trade — but with good risk management, you can lose 7 trades and still come out profitable overall.
---
Key Risk Management Rules:
1. Risk Only 1–2% Per Trade
Never risk your whole account on one trade.
Example:
If your account is $100, risk only $1–$2 per trade.
This way, you can survive multiple losses and still have capital to trade.
---
2. Use Stop Loss (SL) Always
A stop loss cuts your loss automatically if the trade goes the wrong way.
It protects you from blowing your account.
Never trade without a stop loss.
---
3. Reward-to-Risk Ratio (RRR)
Only take trades with a minimum 1:2 ratio.
That means:
Risking 10 pips to make 20 pips.
Or risking $5 to make $10.
This way, one win covers two losses.
---
4. Don’t Overtrade
Taking too many trades in one day = emotional mistakes.
Trade only the best setups that follow your strategy. Quality > quantity.
---
5. Accept Losses Like a Pro
Losing is part of trading. Even the best traders lose trades. What matters is:
Sticking to your plan
Managing your risk
Learning from each mistake
---
Final Tip:
Discipline > Strategy.
A good trader with average strategy will beat a reckless trader with a perfect strategy every time.
GETTING STARTED
SECTION 7: Getting Started – Tools, Apps & Steps
Step 1: Choose a Reliable Broker
Pick a broker that’s beginner-friendly and has good reviews. Look for:
Low spreads
Fast withdrawals
Demo account access
Examples of popular brokers:
HFM (HotForex)
Exness
IC Markets
Deriv
FBS
---
Step 2: Open a Demo Account First
Start with a demo account to practice trading with fake money.
This helps you get used to the charts, tools, and strategies without any risk.
---
Step 3: Download These Essential Apps
MetaTrader 4 (MT4) or MetaTrader 5 (MT5): Where you place trades.
TradingView: For clean chart analysis and market ideas.
Your Broker’s App: To deposit, withdraw, and manage your account.
Forex Factory: For checking news events and avoiding big news spikes.
---
Step 4: Learn and Backtest
Study your strategy, then go to the charts and backtest it (check how well it would’ve worked in the
past).
This builds confidence and sharpens your skills.
---
Step 5: Go Live (But Start Small)
Once you’ve practiced enough and your strategy works:
Deposit a small amount ($10–$100)
Stick to your risk rules
Focus on quality setups only
Grow slowly. Even $50 can become $500 over time if you stay disciplined.
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Step 6: Stay Focused & Keep Learning
Watch educational videos (YouTube, paid courses, etc.)
Follow pro traders for insights
Review your trades weekly
Trading is a skill — the more you practice and study, the better you’ll get.
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•Final Words from Moon’s Guide:
This journey isn’t a sprint — it’s a marathon. Learn the game, master your emotions, and trade
smart. Your future self will thank you.
