You already know the basics from our how to start trading guide. You picked a broker. You opened your account. Now you need real trading skills.
This guide goes deep. You will learn what actually moves prices. You will understand when to enter and when to stay out. You will see how Pakistani traders can trade during their local hours.
Think of this as your trading handbook. Come back whenever you need answers. We skip the fluff. Everything here works in real markets.
How Forex Markets Really Work
Forex means you buy one currency and sell another at the same time. You never just buy euros. You buy euros and sell dollars. That is one trade.
Prices show how much of the second currency you need for one unit of the first. EUR/USD at 1.1000 means one euro costs 1.10 dollars.
You make money when prices move your way. Buy EUR/USD at 1.1000. It goes to 1.1050. You just made 50 pips. Each pip is worth money based on your lot size.
The market never sleeps during weekdays. Trading happens 24 hours through connected banks worldwide. When Asian banks close, European banks open. When Europe closes, America opens. This cycle repeats.
Trading Sessions That Matter for Pakistan
Four sessions run the forex market. Each has different behavior.
Sydney opens at 10 PM PKT. Tokyo follows at midnight. These Asian sessions move slowly. Price action is choppy. Skip these unless you trade yen pairs.
London opens at 7 AM PKT. This is when real movement starts. European traders bring volume. Price breaks out of Asian ranges.
New York opens around noon PKT. This creates the best trading window. London and New York overlap from 5 PM to 9 PM Pakistan time. Trade during these four hours. You get clean moves and tight spreads.
Your job is simple. Sleep during slow hours. Trade during fast hours. Most money gets made between 5 PM and 9 PM PKT.
Currency Pairs You Should Trade
Three types of pairs exist. Major pairs include USD with another big currency. EUR/USD and GBP/USD are majors. These have tiny spreads and good movement.
Minor pairs skip the dollar. EUR/GBP or AUD/CAD are minors. They move less. Spreads are wider. Beginners should avoid these.
Exotic pairs mix a major with an emerging currency. USD/TRY or EUR/ZAR. These jump around randomly. Spreads are huge. Stay away until you master majors.
Start with EUR/USD. It has the tightest spread. Movement is clean. Patterns are clear. Once you profit consistently on EUR/USD, try GBP/USD or USD/JPY.
Gold Trading for Pakistani Traders
Gold trades as XAU/USD in forex. You don’t own real gold. You trade price changes. This makes it fast and simple.
Gold moves differently than currencies. When markets panic, gold rises. When everything calms down, gold falls. This pattern repeats.
Pakistani traders love gold. It moves 50 to 100 pips daily. One good gold trade can make your week. But it also moves fast. Use smaller position sizes on gold than on currency pairs.
Watch gold during US market open. That is when the biggest moves happen. Set your alerts. Wait for clean setups. Don’t chase price.
What Actually Moves Prices
Prices change when new information hits the market. Big economic reports move prices fast. These happen on scheduled dates.
US jobs data comes first Friday of each month. This shakes every USD pair. Price can jump 100 pips in minutes. Check Forex Factory calendar before you trade. Red icons mean big news. Stay out during those times.
Central bank meetings matter more than anything. When Fed announces interest rate changes, markets go wild. When they just talk, markets still react. Save these dates in your calendar.
Political events create chaos. Elections. Wars. Trade disputes. Markets hate uncertainty. During these times, safe currencies like USD and JPY rise. Risk currencies like AUD and NZD fall.
Understanding Pips and Lot Sizes
A pip measures price movement. For most pairs, one pip is 0.0001. EUR/USD moves from 1.1050 to 1.1051. That is one pip up.
Yen pairs work differently. USD/JPY shows two decimals. One pip here is 0.01. Price moves from 110.50 to 110.51. Still one pip.
Lot size determines your risk. Standard lot is 100,000 units. Each pip equals $10. Mini lot is 10,000 units. Each pip equals $1. Micro lot is 1,000 units. Each pip equals $0.10.
Start with micro lots. Risk stays tiny. You learn without bleeding money. Most beginners blow accounts using standard lots too soon.
Here is real math. You have 50,000 PKR account. Dollar is 280 PKR. Your account is $178. Risk 1% per trade. That is $1.78 or 500 PKR. With 20 pip stop loss, use 0.01 lot size. This keeps risk at $2 per trade.
Leverage Can Kill Your Account
Leverage lets you control big positions with small money. Broker offers 1:100 leverage. Your $1,000 controls $100,000 in trades.
This sounds great. But leverage amplifies losses too. A small move against you wipes the account. Most beginners die here.
Your broker might offer 1:500 leverage. Ignore it. Use 1:50 or less. Lower leverage means your stop loss has room to breathe. Markets move. Your account survives.
Here is what happens with high leverage. You have $1,000. You use 1:500 leverage. You open a $100,000 position. Market moves 1% against you. Your $1,000 is gone. Account dead.
Same trade with 1:50 leverage. You control $50,000. A 1% move costs you $500. Account still alive. You can recover. This difference matters.
Position Sizing Saves Your Money
Position size matters more than entry point. You can enter at the perfect spot. But if your position is too big, one bad move kills you.
Never risk more than 1% per trade. You have 100,000 PKR. Risk 1,000 PKR per trade. Find your stop loss distance. Divide risk by stop distance. That tells you position size.
Example trade. You have 100,000 PKR account. You want to buy EUR/USD. Your stop loss is 25 pips away. You risk 1% which is 1,000 PKR. Divide 1,000 by 25. You get 40 PKR per pip. This equals 0.14 mini lots or 1.4 micro lots.
Use position size calculators if math confuses you. Input your account size, risk percent, and stop distance. Calculator shows exact lot size. Never skip this step.
Trading Costs You Need to Know
Every trade costs money. Spread is the difference between buy and sell price. If EUR/USD shows 1.1000/1.1002, spread is 2 pips. You pay this entering and exiting.
Some brokers charge commission. They might take $7 per round trip. Compare this to spread cost. Sometimes commission brokers are cheaper.
Swap is overnight interest. Hold a position past 5 PM EST. You pay or earn swap. Islamic accounts remove swap charges. Perfect for halal trading.
Add all costs before trading. If spread is 2 pips and you pay $7 commission, your trade must make 12 pips just to break even. High costs kill profits. Pick brokers with tight spreads and low commissions.
MetaTrader 5 Platform Basics
MT5 is your trading tool. Download it from your broker’s website. Install takes five minutes. Open demo account first. Never start with real money.
The main screen shows charts. Left side has market watch. This lists all pairs you can trade. Right side shows open positions. Bottom shows account history.
Change chart timeframes easily. Right click the chart. Pick your timeframe. Use 1-hour for swing trading. Use 15-minute for day trading. Daily chart shows big picture.
Place orders from chart or market watch. Right click a pair. Click new order. Choose your lot size. Set stop loss and take profit. Click buy or sell. Trade executes instantly.
Save your layout when you like it. Next time you open MT5, everything loads how you left it. This saves setup time daily.
Order Types Every Trader Uses
Market order executes now at current price. Click buy or sell. Trade fills immediately. Use market orders when you want in right now.
Pending orders execute later at your chosen price. Set the level you want. When price gets there, order triggers automatically.
Buy stop goes above current price. You think price will break up. When it hits your level, you buy automatically. Good for breakout trades.
Sell stop goes below current price. You think price will break down. When it hits your level, you sell automatically.
Buy limit goes below current price. You want to buy cheaper during a pullback. Price drops to your level. Order fills. You bought the dip.
Sell limit goes above current price. You want to sell higher during a bounce. Price rises to your level. Order fills. You sold the peak.
Stop Loss Placement That Works
Stop loss protects you from disasters. Every trade needs one. No exceptions. Place it when you enter. Never add it later.
Put stops beyond recent swing points. Buying EUR/USD? Find the last low. Place stop 5-10 pips below it. This gives trade room to breathe.
Never put stops at obvious round numbers. Everyone puts stops at 1.1000. Big players hunt these levels. Use 1.0985 instead. You survive the stop hunt.
Move stop to breakeven when trade goes 50% to target. This locks in zero risk. If price reverses, you lose nothing. If it continues, you still win.
Take Profit Targets That Make Sense
Set take profit at next resistance for buys. Set it at next support for sells. Don’t hope for huge moves. Take profit when you can.
Consider partial exits. Close half at first target. Move stop to breakeven. Let the other half run to second target. This strategy protects profits while catching big moves.
Use minimum 1:2 risk reward. Risk 20 pips. Target 40 pips. This math works long term. Even 50% win rate makes you money with 1:2 RR.
Calculate reward before entering. Potential profit divided by potential loss. Below 1.5? Skip the trade. Wait for better setup. Good traders are picky traders.
Reading Candlestick Charts
Each candle shows four prices. Open. High. Low. Close. Green candle closed higher than it opened. Red candle closed lower.
Long wicks mean rejection. Big wick on top? Sellers pushed price down. Big wick on bottom? Buyers pushed price up. Small body with long wicks? Market is confused.
Doji candles show indecision. Open and close are nearly same. Often appears before reversals. Watch for doji at support or resistance.
Engulfing patterns signal strength. Green candle swallows previous red candle completely. This shows buyers took control. Red engulfing shows sellers took over.
Hammers and shooting stars matter. Hammer has long bottom wick with small body on top. Forms at support. Signals bounce coming. Shooting star has long top wick. Forms at resistance. Signals drop coming.
Support and Resistance Levels
Support is where buying comes in. Price drops to this level. Buyers step in. Price bounces back up. Mark these levels on your chart.
Resistance is where selling comes in. Price rises to this level. Sellers step in. Price drops back down. Mark these too.
Draw horizontal lines at previous highs and lows. These become your support and resistance. Price respects these levels again and again.
When support breaks, it becomes resistance. When resistance breaks, it becomes support. This flip happens often. Use it for entries.
Multiple Timeframe Analysis
Start with daily chart. This shows big picture trend. Uptrend has higher highs and higher lows. Downtrend has lower highs and lower lows. Sideways has price bouncing in range.
Move to 4-hour chart. Find support and resistance zones. Mark recent swing highs and lows. These become your targets and stops.
Drop to 1-hour or 15-minute for entry. Wait for price to reach your zone. Look for reversal candle. Enter when candle confirms. Your stop is beyond the zone. Your target is next level on higher timeframe.
This method keeps you trading with bigger trend. You get better entries. Your stops make sense. Your targets are realistic.
Trading Psychology Tricks
Fear makes you exit winners early. Trade moves 10 pips in profit. You get scared. You close. Then price goes 50 pips. This happens to everyone.
Fix this with targets. Set take profit when you enter. Walk away. Don’t watch every tick. Trust your analysis. Let it play out.
Greed makes you hold losers. Trade goes against you. You think it will come back. It doesn’t. Loss gets bigger. You freeze. Account bleeds.
Fix this with stops. Set stop loss when you enter. Never move it further away. Take the loss. Move to next trade. One loss means nothing. Ten losses with no stops kills you.
Revenge trading destroys accounts. You lose a trade. You get angry. You double position size. You trade random pairs. You lose more. Cycle continues.
Fix this with breaks. After two losses in row, close platform. Go for walk. Come back tomorrow. Fresh mind makes better decisions.
Building Your Trading Rules
Write down when you enter trades. Be specific. Example: Buy when price touches support and forms hammer candle on 1-hour chart. No hammer, no trade.
Write down your stop rules. Example: Stop goes 10 pips below support zone. Never move stop further away. Accept loss when hit.
Write down your profit rules. Example: Take half profit at 1.5 times risk. Move stop to breakeven. Let remaining position run to 2.5 times risk.
Follow these rules every single time. No exceptions. No feelings. No opinions. Rules only. This removes emotions from trading.
Keeping a Trading Journal
Record every trade you take. Screenshot your chart. Write why you entered. Note your emotions. Save it all.
After each trade, write what happened. Did you follow your rules? Why or why not? What did you learn? Be honest with yourself.
Review journal every Sunday. Look for patterns. Maybe you trade better in morning. Maybe you lose on Fridays. These patterns matter.
Most traders skip journaling. They repeat same mistakes forever. You want to be different. You want to improve. Journal makes you better.
Setting Daily Loss Limits
Pick maximum daily loss. Example: 2% of account. You lose this much, stop trading. Close platform. Done for the day.
This protects you from blow ups. Bad days happen. You prevent bad days from becoming disasters. Come back tomorrow with fresh mind.
Never try to recover daily losses. This leads to bigger losses. Accept bad days. They are part of trading. Survival matters more than any single day.
Legal Stuff for Pakistani Traders
Forex trading is legal in Pakistan. SECP and State Bank regulate financial markets. They don’t stop individuals from trading with international brokers.
You can’t trade USD/PKR directly. Capital controls prevent this. But you can trade all other pairs. EUR/USD, GBP/USD, gold, everything else works.
International brokers don’t need SECP approval. They follow their own country regulations. Pick brokers with FCA, ASIC, or CySEC licenses. These protect your funds.
Tax Rules You Must Follow
Forex profits are taxable in Pakistan. Report your earnings to FBR. Current tax rates for 2025:
Up to 600,000 PKR profit: 0% tax 600,001 to 1,200,000: 5% tax Above 1,200,000: 15 to 35% tax
Keep records of everything. Save your trade history. Keep deposit and withdrawal receipts. You need these for tax filing.
Consult a tax expert. Rules change. Professionals know current laws. Don’t guess with taxes. Get proper advice.
Picking the Right Broker
Choose regulated brokers only. Check FCA, ASIC, or CySEC websites. Confirm broker license is real. Scammers fake regulation.
Look for brokers accepting JazzCash or EasyPaisa. These work best in Pakistan. Bank transfers work too. Skip brokers requiring PayPal. It doesn’t work here.
Compare spreads on major pairs. EUR/USD should have 1-2 pip spread. GBP/USD should have 2-3 pips. Higher spreads eat your profits.
Check our best brokers guide for detailed comparisons. We test withdrawal speeds and customer support.
Best Trading Hours for Different Assets
Each market has prime hours. Trade at right time. Wrong time means wasted effort.
Gold moves best from 9:30 to 10:30 AM PKT and 2:00 to 2:30 PM PKT. These align with New York opens and key liquidity times.
Major pairs like EUR/USD and GBP/USD shine from 3:00 to 5:00 AM PKT and 8:30 to 10:30 AM PKT. London open and NY overlap create volume.
Crude oil wakes up from 9:00 to 11:00 AM PKT and 1:30 to 2:30 PM PKT. US inventory data and NY session drive moves.
Bitcoin and crypto run from 8:30 to 9:30 AM PKT and 10:00 to 10:30 AM PKT. Liquidity sweeps happen before and during NY open.
Write these times down. Set alerts. Focus your trading during these windows. Rest during slow hours.
Following Economic Calendar
Check Forex Factory calendar every morning. Red icons mean high impact news. These move markets 50 to 100 pips in seconds.
Non-farm payrolls comes first Friday each month at 9:30 AM PKT. This shakes every USD pair. Don’t trade during this release. Wait 30 minutes after. Let dust settle.
Fed interest rate decisions happen eight times yearly. These create huge moves. Same rule. Stay out during announcement. Trade after market picks direction.
Set notifications on your phone. Calendar apps remind you before news. This prevents surprise volatility catching you off guard.
Simple Trading Strategy That Works
Wait for price to reach support or resistance. Don’t guess. Let price come to your level. Patience pays.
Look for reversal candle at that level. Hammer at support. Shooting star at resistance. No reversal candle, no trade.
Enter when next candle confirms direction. Hammer formed. Next green candle closes. You buy. Stop goes below hammer low. Target is next resistance level.
This strategy is simple. It works on any pair. It works on any timeframe. Master this before trying complex methods.
Risk Management Rules That Save You
Never risk more than 1% per trade. You have 100,000 PKR. Risk 1,000 PKR maximum. This protects you during losing streaks.
Set daily loss limit at 3% of account. You lose 3,000 PKR in one day. Stop trading. Come back tomorrow. No exceptions.
Keep maximum drawdown under 10%. Account drops 10% from peak. Reduce position sizes. Focus on capital preservation. Rebuild slowly.
These rules seem strict. They are. But they keep you alive. Most traders fail because they risk too much. Don’t be most traders.
Useful Tools You Actually Need
Use position size calculator before every trade. No guessing. Calculate exact lot size. This removes math mistakes.
Check economic calendar every morning. Know what news is coming. Plan your trading around it.
Use TradingView for clean charts. Free version works fine. You can draw lines. Add indicators. Save layouts.
Download MetaTrader from your broker. This is your trading platform. Practice on demo first. Get comfortable before going live.
Learning Resources Worth Your Time
Read Trading in the Zone by Mark Douglas. This book teaches trading psychology. Your mind matters more than your strategy.
Watch Skill Centric (The Forex Guide) on YouTube. Their videos explain price action simply. Start with their basics. Practice everything on demo.
Join Cult Traders Discord. Free community. No fees ever. Learn from experienced traders. Watch real setups form.
Follow our daily signals on PipsJournal. See how we analyze markets. Practice the same methods on your demo.
Common Questions Pakistani Traders Ask
Can forex be halal? Yes, use Islamic accounts. These remove interest charges. Trade with knowledge, not gambling. Settlement must be immediate.
How much money do I need? Start with $100 to $500. This gives proper risk management room. Smaller amounts make learning harder.
When should I trade? Trade between 5 PM and 9 PM PKT. This covers London and New York overlap. Best movement happens here.
Do I pay taxes? Yes, forex profits are taxable. Report to FBR. Keep all records. Consult tax expert for details.
Your Next Steps
Open demo account today. Practice everything you learned here. Spend 30 days on demo minimum. Learn your platform. Test your rules.
Keep trade journal from day one. Screenshot every trade. Write why you entered. Note what you learned. Review weekly.
Focus on one pair. Master EUR/USD first. Don’t jump between pairs. Consistency builds skill faster than variety.
Risk tiny amounts when you go live. Start with 0.01 lots. Prove you can profit consistently. Then increase size slowly.
Join our Telegram channel. Get daily analysis. Ask questions. Learn from community. Trading is easier with support.
Remember, trading is a skill. Skills take time. Be patient with yourself. Small progress daily beats big losses weekly. Stay consistent. Stay disciplined. Success comes to those who survive long enough to learn.
Author: Muhammad Usman Ali Last Updated: 29 November 2025
