So I know that maybe you already know this, but there
are some basic points that definitely need to be addressed
before we really start our course.  So if you are a more
advanced trader, you can skip this part and wait for
tomorrow's lesson.  Here it goes:

THE EXCHANGE RATE
The base currency is the term for the first currency in the pair.
The counter currency is the term for the second currency in
the pair. The exchange rate represents the number of units
of the counter currency that one unit of the base currency
can purchase. In a foreign exchange trade, clients are
speculating on the exchange rate between two currencies.
The exchange rate measures the relative value of a currency
-- meaning it measures how much one currency is worth in
terms of another currency.

PIPS
A pip is the unit of measurement for exchange rate movement.
The number of pips a currency pair moves determines how much
a trader will earn or lose on the position. A pip is the last
significant digit in an exchange rate, and is the term used
to define the unit of measurement for exchange rate
movements. The number of pips that the exchange rate moves
dictates how much a trader has gained or lost through an FX
trade.

THE BASIC PROCESS IN 2 STEPS
1. One currency is being borrowed.
2. The proceeds from the borrowed currency are used to finance
the currency that is being bought.

OPPORTUNITIES IN FOREX
One of the premier advantages of the foreign exchange market
is that profit opportunities are equally present in all market
conditions; you can profit when the exchange rate is declining or
when the rate is rising.

SPREADS
You will notice that there are always 2 prices for each currency
pair. In Forex, there is a BID and ASK price

The bid is the price at which a dealer is willing to buy and
clients can sell the base currency in exchange for the counter
currency. The ask is the price at which a dealer is willing to
sell and a client can buy.
BID = The Price at which the Trader (You) Can Sell
ASK = The Price at which the Trader (You) Can Buy

MARGINS
In Forex, only a small percentage of the actual position value
needs to be deposited prior to entering the trade.
This small deposit, known as the margin, is not a down
payment, but rather a performance bond or good faith deposit
to ensure against trading losses. The margin requirement
allows traders to hold positions much larger than their account
value. Margin requirements are as low as 1% .

TYPES OF ORDERS
The term "order" refers to how a trader can enter or exit a
speculative position in the market. There are basically 2
ways of dividing the types of Orders:
1. Orders used to enter positions
2. Orders used to exit positions

1. Orders Used to Enter Positions

Market Order
A market order is an order to buy or sell a currency pair
at the current market price. The key advantage of market
orders is that they ensure the trader that he will get in
the position. The key disadvantage, though, is that the
trader may not get the best price he could have gotten
had he used another order type. Another disadvantage
is that market orders are more conducive to being used
recklessly and without discipline.

Entry Orders
Entry Orders will only be filled if the market reaches the
rate specified. Is to say, you place the order before hand and
leave it there.   Then when the market reaches that price,
your trading station will automatically enter the trade.

2. Orders Used to Exit Positions

Limit Orders or Take Profit Orders
A limit order allows a client to specify the rate at which they
will take profits and exit the market. Limit orders are great
tools to help traders maintain discipline and lock-in profits.
The main disadvantage is that they may result in premature
profit-taking

Stop-Loss Order
Stop Loss Orders work like limit orders, but in an opposite
fashion: it specifies the maximum loss that a trader is willing
to accept on a given position.

Stop-loss orders are a necessity for every Forex trader. They will
Prevent you from losing all your money in a couple of trades and
Will guide you when deciding your risk-reward ratios.

However, the main disadvantage is that if stop-loss orders are
not placed at the appropriate level, can result in traders being
taken out of positions at a loss prematurely or when in fact
the market was going to reverse to a profitable position.