Forex Trading

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1988 1992 1995 1998 2001 2004 2007 2010

TRILLIONUS $

Global Forex Market Growth

Source: Triennial Survey, BIS

Forex Market - Introduction

Over $4 trillion transactions daily

Open 24 hours x 5 days

Biggest Financial Market in the world

Accessible to every individual via Internet

Buying and Selling of Currencies

Forex Market Advantages versus The Stock Market

Advantages Forex Stocks

24-hour Trading YES NO

Commission Free Trading YES NO

Continuous Trading (No Halt Trading) YES NO

Short Selling Without Authorization YES NO

Leverage 400:1 5:1

Demo Practice Account YES NO

Making and Losing Money

Your Decision CAD USD

You buy 1,000 CAD at the CAD/USD rate of 0.90 1000 -900

A week later, the CAD/USD rises to 1.00 and you exchange your 1,000 CAD back into U.S. dollars

-1000 1000

Profit 100

Most Traded Currency pairs

EUR/USD (euro/dollar) – "euro"

USD/JPY (U.S. dollar/Japanese yen) – "gopher"

GBP/USD (British pound/dollar) - "cable"

USD/CHF (U.S. dollar/Swiss franc) – "swissie"

Most Heavily Traded Currencies

Currency Market Share

USD 83.7%

EUR 60%

GBP 15.3%

JPY 13.4%

CHF 9.5%

SEK 2.2%

AUD 2.1%

CAD 1.6%

Currency Quote OverviewUSD/CAD = 1.2000/05

Base Currency Currency to the left (USD)

Quote Currency Currency to the right (CAD)

Bid Price 1.2000Price for which the marketmaker will buy the basecurrency. Bid is alwayssmaller than ask.

Ask Price 1.2005Price for which the marketmaker will sell the basecurrency.

Pip One point move, in USD/CADit is .0001 and 1 point changewould be from 1.2000 to 1.2001

The pip/point is the smallestmovement a price can make.

Spread

Spread in this case is 5pips/points, or the differencebetween bid and ask price(1.2005-1.2000).

Forex TradingTrading Order Types:

Market Order: Instant Execution

Entry Order: Execution takes place at Target Price

Stop Order: Used to Limit Potential Losses

Limit Order: Limits Max Price- Buy & Min Price - Sell

Forex Trading Contd..

Account TypeOpening Amount

Lots LeverageRisk-Reward

Recommended

Standard Trading $2000-$10000 $100,000 100:1 High Experienced Traders

Mini Trading $250-$500 $10,000 400:1 Low Novice Traders

Managed Trading $2000 -$10000 $100,000 100:1 LowInvestors with lot of Capital

Trading Rules

Logic Wins; Impulse Kills

Never Risk More Than 2% Per Trade

Trigger Fundamentally, Enter and Exit Technically

Always Pair Strong With Weak

Trading Rules Contd..

Being Right but Being Early Simply Means That You

Are Wrong

Know the Difference between Scaling In and Adding

to a Loser

What Is Mathematically Optimal Is Psychologically

Impossible

No Excuses, Ever

Live Trading……

LIVE TRADING

Market Watch: Currency Values & Metals

Charts of Currencies (OHLC)

Periodicity

Trade Entry: Lot Size; Stop Loss, Take Profit; Instant Execution

Balance

Equity

Margin

Indicators

BITCOIN

First decentralized electronic currency

Created by pseudonym Satoshi Nakamoto in 2008

Not controlled by a single organization or

government

Open source (C++) project, and it is used by more

than 100,000 people

Peer to Peer Transfer, anywhere in the world for less

than a cent per transaction

Finite supply that is limited by design (21 Mil)

Batches of bitcoins are awarded to bitcoin miners—

people who volunteer to install and run a bitcoin client

on their PCs and solve complex mathematical problems

Changing Finance in the same way as Web changed

Publishing

Convertible to Dollar, Euro, Yen and more

BITCOIN Contd...

THANK YOU