QQ 101 Introductory
Markets and instruments
Course description
This is where to start if you have never looked closely at how a trade happens. It covers how prices are set, why there are always two of them, and the conventions of the two markets most retail traders meet first: foreign exchange and commodities.
Nothing here needs more than arithmetic. Every number is worked through on the page, and each lesson ends with questions. The problem set at the end uses what all four lessons taught.
What you will be able to do
- Read a quote and work out what a round trip costs
- Convert a currency move into pips and into money
- Work out the margin a leveraged position needs
- Compute profit and loss on a futures contract and explain roll cost
Syllabus
- Lesson 1What a market is How buyers and sellers arrive at a price, and the two ways markets are organised.
- Lesson 2Bid, ask and the order book There are always two prices. The gap between them is the first cost every trade pays.
- Lesson 3Forex basics Currency pairs, pips, lots and leverage, with the arithmetic worked through.
- Lesson 4Commodities and futures Gold, oil and the contracts used to trade them, and why a futures price is not the spot price.
- AssessmentProblem set Six problems on quotes, pips, margin, futures and slippage, with worked solutions.