Trading Education : Delravion

Module 1

How Forex Markets Work

The foreign exchange market is the largest financial market in the world, with daily trading volume exceeding $7 trillion. Unlike stock markets, forex operates continuously across global financial centres — London, New York, Tokyo, and Sydney — running 24 hours a day, five days a week.

Currency trading always involves pairs: you are simultaneously buying one currency and selling another. The price of a pair tells you how much of the quote currency is needed to buy one unit of the base currency. Understanding this relationship is the foundation of everything else in forex.

Market Participants

Central banks, commercial banks, institutional investors, corporations, and retail traders all participate in the forex market. Each group operates with different objectives — from hedging currency exposure to speculating on short-term price moves.

Trading Sessions

The four major trading sessions — Sydney, Tokyo, London, and New York — overlap at certain hours. The London/New York overlap (1pm–5pm GMT) typically produces the highest liquidity and tightest spreads for major currency pairs.

Pips and Lots

A pip is the smallest standard price movement in forex, typically the fourth decimal place for most pairs. Position sizes are measured in lots: a standard lot is 100,000 units, a mini lot is 10,000, and a micro lot is 1,000 units of the base currency.

Leverage and Margin

Leverage allows traders to control larger positions with smaller capital. A 30:1 leverage ratio means you can control £30,000 with £1,000 margin. While leverage amplifies gains, it equally amplifies losses — making risk management essential.

Module 2

Reading Trading Charts

Charts are the primary tool for visualising price movement over time. The three main chart types — line, bar, and candlestick — each present the same data in different ways. Candlestick charts are the most widely used because they show the open, high, low, and close of each period in a compact, readable format.

Understanding price action — the raw movement of price before indicators are applied — is one of the most transferable skills in trading. Support and resistance levels, trend lines, and chart patterns all emerge from reading price over time.

Candlestick patterns and what they indicate

Support and resistance identification

Trend lines and channels

Timeframe selection and its implications

Module 3

Technical Analysis Tools

Technical indicators process past price data to help traders identify patterns, momentum, and potential turning points. Here are the most commonly used categories.

Moving Averages

Moving averages smooth price data to reveal the underlying trend. The simple moving average (SMA) treats all periods equally, while the exponential moving average (EMA) gives more weight to recent prices. Crossovers between short and long-term MAs are widely watched signals.

RSI — Relative Strength Index

RSI measures the speed and magnitude of price changes on a scale of 0 to 100. Readings above 70 suggest overbought conditions; below 30 suggests oversold. Traders use RSI to identify potential reversals and confirm trend strength, though it works best in ranging rather than trending markets.

MACD

The Moving Average Convergence Divergence indicator shows the relationship between two EMAs. When the MACD line crosses above the signal line, it generates a bullish signal; crossing below produces a bearish one. The histogram visually represents the distance between the two lines.

Bollinger Bands

Bollinger Bands consist of a middle SMA flanked by two standard deviation bands. When price touches or breaks the outer bands, it may indicate overextension. Band width also signals volatility: wide bands indicate high volatility, narrow bands suggest a consolidation period that often precedes a breakout.

Module 4

Risk Management Principles

Risk management is not optional in forex — it is the discipline that determines whether a trader survives long-term. Even a strategy with a high win rate can destroy a trading account if position sizes are too large or stop-losses are absent.

The core principle is simple: define your maximum acceptable loss before you enter a trade. This is achieved through stop-loss orders, appropriate position sizing relative to account balance, and maintaining a realistic risk-to-reward ratio on every trade.

Stop-loss and take-profit placement

Position sizing relative to account risk

Risk-to-reward ratios explained

Managing leverage and margin calls

Module 5

Forex Terminology

A working knowledge of common forex terms is essential for reading market commentary, understanding broker platforms, and interpreting educational content.

Pip The smallest standard unit of price movement for a currency pair. For most pairs, this is the fourth decimal place (0.0001). For JPY pairs, it is the second decimal place (0.01).

Spread The difference between the bid price (what buyers will pay) and the ask price (what sellers want). Spreads represent the broker's transaction fee on most retail forex accounts.

Lot A standardised unit of currency volume. A standard lot equals 100,000 units of the base currency. Mini lots are 10,000 units; micro lots are 1,000 units.

Margin The deposit required to open and maintain a leveraged position. Margin is not a fee — it is collateral held by the broker. If losses reduce your balance toward the margin requirement, a margin call may be issued.

Leverage Leverage allows you to control a position larger than your deposited capital. A 10:1 ratio means £1,000 controls a £10,000 position. Leverage multiplies both gains and losses proportionally.

Liquidity The ease with which a currency pair can be bought or sold without significantly affecting its price. Major pairs like EUR/USD have very high liquidity; exotic pairs are less liquid and typically carry wider spreads.

Long / Short Going long means buying a currency pair, expecting the base currency to rise relative to the quote. Going short means selling a pair, expecting the base currency to fall. Both positions can profit in forex markets.

Slippage The difference between the price at which you intended to execute an order and the price at which it was actually filled. Slippage typically occurs during periods of high volatility or low liquidity.

Operated in Association with Trade Nation Financial UK Ltd

Delravion operates in association with Trade Nation Financial UK Ltd, authorised and regulated by the Financial Conduct Authority. FCA Reference Number: 525164. This association means the educational content on this platform is developed within a regulated financial services context.

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