A

Summer Internship Project Report

On

“A perception of investors towards forex market”

Submitted to

Global Institute of Management

In partial fulfillment of theRequirement of the award for the degree of

Master of Business AdministrationIn

Gujarat Technological UniversityUnder The Guidance Of

Name of Company Guide Name of Faculty Guide

MR.Hasmukh prajapati MR. Dhaval Patel

Submitted byDULAM KOMALA (127940592010)

KODGANTI SANDHYA (127940592018)

MBA SEMESTER II(Batch 2011-2013)

--------------------------------------------------------------------------------Global Institute of Management

Uwarsad Road-GandhinagarMBA PROGRAMME

Affiliated to Gujarat Technological University-AhmedabadJuly 2012

--------------------------------------------------------------------------------

PREFACE

As a Part of MBA Program, Student has to pursue a project duly approved by the

Faculty of Concerned area. I had the privilege of undertaking the project on “Perception of

Investors on Currency Market in Indian” at Indiainfoline. Main aim of the Project is to

find out the factors which impact on Indian economy of currency market of glob & India.

The foreign exchange trading introduced in India since 2008. There are several

products traded in forex market. As far as the study is consent the report is mainly focusing

on the currency market in India. There are two exchanges MCX-SX and NSE for currency

trading in India. There are four main currency pairs been traded in India are USD, EURO,

GBP and JPY. There is major four ways to invest in or we can say financial instrument to

invest in currency are spot, forward, swap, future and option.

There are mainly three factors which impact the currency market are economic,

political and market physiology. Foreign exchange reserves in a strict sense are only the

foreign currency deposits and bonds held by central banks and monetary authorities. These

are assets of the central bank held in different reserve currencies, mostly the US dollar, and

to a lesser extent the euro, the UK pound, and the Japanese yen, and used to back its

liabilities, the impact on any economy can be measured by analyzing the GDP, GNP, Import

and export growth of the country and additionally the foreign reserve of the country.

The report contains the market research of currency investors as in-depth interview with

questioner. This Project work is divided into following parts which are as under.

Objective of the Study

Limitations of the Study

Research Methodology.

To Understand Global Forex Market

To Understand Indian Forex Market

To Study Indian Economy

Data analysis & Interpretation

I.

Acknowledgement

I am thankful to Mr. Hasmukh Prajapti (Branch Manager) and the management of

INDIAINFOLINE for permitting me to go through my summer training.

First and for most I would like to thank my company guide Mr. Prakash prajapati

( Sales Manager) for his constant encouragement, guidance and advice at every stage of my

training. This project would not have been successfully completed without their great

support.

I am very much thankful to Center for Management Studies, Global Institutes for

their excellent guidance, support and appreciation and also provided me with this great

opportunity to work in such a reputed organization.

I express my sincere thanks to Mr. Dhaval Patel who helped me in understanding the

project and the implementation of the same. His suggestions really helped me think on a

broad perspective and give me motivation to do my best. I would again like to thank Center

for Management, Global Institute for helping and supporting me for my Summer Internship

Program at Indiainfoline.

II.

TABLE OF CONTENTS

TABLE OF CONTENTSNo. Particulars Page no.1.

CHAPTER 1 INTRODUCTION

1.1 Introduction of Forex market 71.2 History of Forex market 91.3 An Overview of Forex Market 111.4 Need for Forex Market 121.5 Basic Concept of Forex market 13

2.CHAPTER 2

STRUCTURE OF FOREX MARKET

2.1 The Organization & Structure of FOREX MARKET 162.2 Main Participants In Foreign Exchange Markets 17

3.CHAPTER 3

WORKING OF FOREX MARKET

3.1 Function of Forex market 253.2 Procedure for Forex Market 273.3 Advantage of Forex Market 333.4 Trading In Forex market 363.5 Exchange Rate under Floating Rates 37

4.CHAPTER 4

DEALING IN CURRENCIES40

5. CHAPTER 5INDIA INFOLINE PROFILE

5.1 Introduction of Company 465.2 History of company 475.3 Vision and Mission 48

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5.4 Details of Company 495.5 Features of Company 515.6 Products and services 52

6. Literature Review 55

7. CHAPTER 7RESEARCH METHODOLOGY

7.1 Research objective 7.2 Research design7.3 Sampling plan7.4 Data collection plan7.5 Contact method

8. Recommendation to the company 9. Conclusion 10. Bibliography 11. Annexure

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1. INTRODUCTION

Forex market is the process of conversion of one currency into another

currency. For a country its currency becomes money and legal tender. For a

foreign country it becomes the value as a commodity. Since the commodity has a

value its relation with the other currency determines the exchange value of one

currency with the other. For example, the US dollar in USA is the currency in

USA but for India it is just like a commodity, which has a value which varies

according to demand and supply.

The Forex market market (forex, FX, or currency market) is a global,

worldwide decentralized over-the-counter financial market for trading currencies.

Financial centers around the world function as anchors of trading between a wide

range of different types of buyers and sellers around the clock, with the exception

of weekends. The Forex market determines the relative values of different

currencies.

The primary purpose of the Forex market is to assist international trade and

investment, by allowing businesses to convert one currency to another currency.

For example, it permits a US business to import British goods and pay Pound

Sterling, even though the business's income is in US dollars. It also supports

speculation, and facilitates the carry trade, in which investors borrow low-yielding

currencies and lend (invest in) high-yielding currencies, and which (it has been

claimed) may lead to loss of competitiveness in some countries.

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The Forex market is unique because of

Its huge trading volume, leading to high liquidity

Its geographical dispersion

Its continuous operation: 24 hours a day except weekends, i.e. Trading from

20:15 gmt on Sunday until 22:00 gmt friday

The variety of factors that affect exchange rates

The low margins of relative profit compared with other markets of fixed

income

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1.2 HISTORY OF FOREX MARKET:

The foreign exchange market as we know it today originated in 1973.

However, money has been around in one form or another since the time of

Pharaohs. The Babylonians are credited with the first use of paper bills and

receipts, but Middle Eastern moneychangers were the first currency traders who

exchanged coins from one culture to another. During the middle ages, the need for

another form of currency besides coins emerged as the method of choice. These

paper bills represented transferable third-party payments of funds, making foreign

currency exchange trading much easier for merchants and traders and causing

these regional economies to flourish.

From the infantile stages of forex during the Middle Ages to WWI, the forex

markets were relatively stable and without much speculative activity. After WWI,

the forex markets became very volatile and speculative activity increased tenfold.

Speculation in the forex market was not looked on as favorable by most

institutions and the public in general. The Great Depression and the removal of the

gold standard in 1931 created a serious lull in forex market activity. From 1931

until 1973, the forex market went through a series of changes. These changes

greatly affected the global economies at the time and speculation in the forex

markets during these times was little, if any.

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THE BRETTON WOODS ACCORD

The first major transformation, the Bretton Woods Accord, occurred toward the end of World

War II. The United States, Great Britain and France met at the United Nations Monetary and

Financial Conference in Bretton Woods, N.H. to design a new global economic order. The

location was chosen because, at the time, the U.S. was the only country unscathed by war. Most

of the major European countries were in shambles. The Bretton Woods Accord was established

to create a stable environment by which global economies could restore themselves. The Bretton

Woods Accord established the pegging of currencies and the International Monetary Fund

(IMF) in hope of stabilizing the global economic situation.

Bretton Woods System was a modified version of Gold Exchange Standard. The main

features were:

1. 1.The USA undertook to convert the US Dollar freely into gold at a fixed parity of $35 per

ounce.

2. Other countries (member countries of IMF) agreed to maintain their currencies at specific

parities with US$. 1% variation in this parity

3. (+ or -) was allowed. If the exchange rate of these member countries tended to exceed this

1% limit, then their monetary authorities shall take the necessary measures to restore it. This

was supposed to be done by buying or selling dollars.

4. In order, to follow this parity-maintaining obligation, if required, member countries may

borrow from IMF.

5. If there is a genuine problem in maintaining parity to a particular member country, then it

can change its parity itself by 10%, without consulting IMF. If it desired to exceed 10%

limit, it has to inform IMF and seek its consent. Because of this feature, this system was

often referred as Adjustable peg system.

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1.3 FOREIGN EXCHANGE MARKET OVERVIEW:

The Foreign Exchange market, also referred to as the "Forex" or "FX"

market is the largest financial market in the world, with a daily average turnover of

US$1.9 trillion — 30 times larger than the combined volume of all U.S. equity

markets. "Foreign Exchange" is the simultaneous buying of one currency and

selling of another. Currencies are traded in pairs, for example Euro/US Dollar

(EUR/USD) or US Dollar/Japanese Yen (USD/JPY).

There are two reasons to buy and sell currencies. About 5% of daily

turnover is from companies and governments that buy or sell products and services

in a foreign country or must convert profits made in foreign currencies into their

domestic currency. The other 95% is trading for profit, or speculation.

A true 24-hour market, Forex trading begins each day in Sydney, and moves

around the globe as the business day begins in each financial center, first to Tokyo,

London, and New York. Unlike any other financial market, investors can respond

to currency fluctuations caused by economic, social and political events at the time

they occur - day or night.

The FX market is considered an Over the Counter (OTC) or 'interbank'

market, due to the fact that transactions are conducted between two counterparts

over the telephone or via an electronic network. Trading is not centralized on an

exchange, as with the stock and futures markets.

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1.4 NEED FOR FOREX MARKET:

Foreign exchange markets represent by far the most important financial markets in the world. Their role is of paramount importance in the system of international payments. In order to play their role effectively, it is necessary that their operations/dealings be reliable. Reliability essentially is concerned with contractual obligations being honored. For instance, if two parties have entered into a forward sale or purchase of a currency, both of them should be willing to honor their side of contract by delivering or taking delivery of the currency, as the case may be.

If we want to buy foreign goods or a country wants to invest in other country, companies or individuals first need to buy the currency of that country with which they are going to do the business.

There comes the requirement of foreign exchange market or FX market where one can buy and sell currencies. Here, the price of one currency is determined on the price of the other currency. This rate is called exchange rate.

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1.5 BASIC CONCEPTS OF FOREX MARKET

As per Forex market Act, (Section 2), 1947.

Foreign Currency means any currency other than Indian currency. Forex market means includes any instrument drawn, accepted, made or

issued under clause (8) of section 17 of the Banking Regulation Act, 1956, all deposits, credits and balance payable in any foreign currency, and any drafts, traveler’s cheques, letters of credit and bills of exchange, expressed or drawn in Indian currency but payable in any foreign currency

Financial Markets is a place where Resources/funds are transferred from those having surplus/excess to those having a deficit/shortage.

Forex market Markets the market where the commodity traded is Currencies.Price of each currency is determined in term of other currencies.

Exchange RateExchange Rate is the price of one country's currency expressed in another country's currency. In other words, the rate at which one currency can be exchanged for another. E.g. Rs. 48.50 per one USD

Major currencies of the World USD EURO YEN POUND STERLING

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WHAT IS A FOREX MARKET TRANSACTION?

Any financial transaction that involves more than one currency is a Forex market transaction.

Most important characteristic of a Forex market transaction is that it involves Forex market Risk.

PARTICIPANTS IN THE FOREX MARKET

All Scheduled Commercial Banks (Authorized Dealers only). Reserve Bank of India (RBI). Corporate Treasuries. Public Sector/Government. Inter Bank Brokerage Houses. Resident Indians Non Residents Exchange Companies Money Changers

COMPONENTS OF A STANDARD FX TRANSACTION

Base Currency (USD/INR) ‘Dealt’ or ‘Variable’ Currency Exchange Rate Amount Deal Date Value Date Settlement Instructions

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2.1-The Organization & Structure of FOREX MARKET

Is given in figure below.

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2.2 Main Participants In Foreign Exchange Markets

There are four levels of participants in the foreign exchange market-

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Foreign Exchange Market

Wholesale

Internabank( Bank accounts

or Deposits)Central Bank

Retail

Banks Money and Charges( cheques ,

Currencies, Banknote)

Direct

SpotForward

(Outright & Swaps)

Derivatives( Future & Option )

Merchandise

Non-Merchandise(Arbitrage , Hedge,S

peculation )

Indirect ( through Brokers)

At the first level, are tourists, importers, exporters, investors, and so on.

These are the immediate users and suppliers of foreign currencies.

At the second level, are the commercial banks, which act as clearing houses

between users and earners of foreign exchange.

At the third level, are foreign exchange brokers through whom the nation’s

commercial banks even out their foreign exchange inflows and outflows

among themselves.

Finally at the fourth and the highest level is the nation’s central bank, which

acts as the lender or buyer of last resort when the nation’s total foreign

exchange earnings and expenditure are unequal. The central then either

draws down its foreign reserves or adds to them.

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Main Participants in Foreign Exchange Markets

1. CUSTOMERS

The customers who are engaged in foreign trade participate in foreign exchange

markets by availing of the services of banks. Exporters require converting the

dollars into rupee and importers require converting rupee into the dollars as they

have to pay in dollars for the goods / services they have imported. Similar types

of services may be required for setting any international obligation i.e., payment

of technical know-how fees or repayment of foreign debt, etc.

2. COMMERCIAL BANKS

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Customers

Individuals

Commercial companies

Investment management

firmsNon-bank

foreign exchange

companies

Speculators

Exchange Brokers

Commercial Banks

They are most active players in the forex market. Commercial banks dealing

with international transactions offer services for conversation of one

currency into another. These banks are specialised in international trade and

other transactions.

They have wide network of branches. Generally, commercial banks act as

intermediary between exporter and importer who are situated in different

countries. Typically banks buy foreign exchange from exporters and sells

foreign exchange to the importers of the goods. Similarly, the banks for

executing the orders of other customers, who are engaged in international

transaction, not necessarily on the account of trade alone, buy and sell

foreign exchange.

As every time the foreign exchange bought and sold may not be equal banks

are left with the overbought or oversold position. If a bank buys more

foreign exchange than what it sells, it is said to be in ‘overbought/plus/long

position’. In case bank sells more foreign exchange than what it buys, it is

said to be in ‘oversold/minus/short position’.

The bank, with open position, in order to avoid risk on account of exchange

rate movement, covers its position in the market. If the bank is having

oversold position it will buy from the market and if it has overbought

position it will sell in the market. This action of bank may trigger a spate of

buying and selling of foreign exchange in the market.

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Commercial banks have following objectives for being active in the foreign

exchange market:

They render better service by offering competitive rates to their customers

engaged in international trade.

They are in a better position to manage risks arising out of exchange rate

fluctuations.

Foreign exchange business is a profitable activity and thus such banks are in

a position to generate more profits for themselves.

They can manage their integrated treasury in a more efficient manner.

3. EXCHANGE BROKERS

Forex brokers play a very important role in the foreign exchange markets.

However the extent to which services of forex brokers are utilized depends on the

tradition and practice prevailing at a particular forex market centre. In India

dealing is done in interbank market through forex brokers. In India as per FEDAI

guidelines the AD’s are free to deal directly among themselves without going

through brokers. The forex brokers are not allowed to deal on their own account all

over the world and also in India.

How Exchange Brokers Work?

Banks seeking to trade display their bid and offer rates on their respective

pages of Reuters screen, but these prices are indicative only. On inquiry from

brokers they quote firm prices on telephone. In this way, the brokers can locate the

most competitive buying and selling prices, and these prices are immediately

broadcast to a large number of banks by means of hotlines/loudspeakers in the

banks dealing room/contacts many dealing banks through calling assistants

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employed by the broking firm. If any bank wants to respond to these prices thus

made available, the counter party bank does this by clinching the deal. Brokers do

not disclose counter party bank’s name until the buying and selling banks have

concluded the deal. Once the deal is struck the broker exchange the names of the

bank who has bought and who has sold. The brokers charge commission for the

services rendered. In India broker’s commission is fixed by FEDAI.

4. SPECULATORS

Speculators play a very active role in the foreign exchange markets. In fact

major chunk of the foreign exchange dealings in forex markets in on account of

speculators and speculative activities. The speculators are the major players in the

forex markets.

Banks dealing are the major speculators in the forex markets with a view to

make profit on account of favourable movement in exchange rate, take position

i.e., if they feel the rate of particular currency is likely to go up in short term. They

buy that currency and sell it as soon as they are able to make a quick profit.

Corporations particularly Multinational Corporations and Transnational

Corporations having business operations beyond their national frontiers and on

account of their cash flows. Being large and in multi-currencies get into foreign

exchange exposures. With a view to take advantage of foreign rate movement in

their favour they either delay covering exposures or does not cover until cash flow

materialize. Sometimes they take position so as to take advantage of the exchange

rate movement in their favour and for undertaking this activity, they have state of

the art dealing rooms. In India, some of the big corporate are as the exchange

control have been loosened, booking and cancelling forward contracts, and a times

the same borders on speculative activity.

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5. INDIVIDUALS

Individuals like share dealings also undertake the activity of buying and selling

of foreign exchange for booking short-term profits. They also buy foreign

currency stocks, bonds and other assets without covering the foreign exchange

exposure risk. This also results in speculations.

6. COMMERCIAL COMPANIES

An important part of this market comes from the financial activities of companies seeking foreign exchange to pay for goods or services. Commercial companies often trade fairly small amounts compared to those of banks or speculators, and their trades often have little short term impact on market rates. Nevertheless, trade flows are an important factor in the long-term direction of a currency's exchange rate. Some multinational companies can have an unpredictable impact when very large positions are covered due to exposures that are not widely known by other market participants.

7. INVESTMENT MANAGEMENT FIRMS

Investment management firms (who typically manage large accounts on behalf of customers such as pension funds and endowments) use the foreign exchange market to facilitate transactions in foreign securities. For example, an investment manager bearing an international equity portfolio needs to purchase and sell several pairs of foreign currencies to pay for foreign securities purchases.

Some investment management firms also have more speculative specialist currency overlay operations, which manage clients' currency exposures with the aim of generating profits as well as limiting risk. Whilst the number of this type of specialist firms is quite small, many have a large value of assets under management (AUM), and hence can generate large trades.

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8. NON-BANK FOREIGN EXCHANGE COMPANIES

Non-bank foreign exchange companies offer currency exchange and international payments to private individuals and companies. These are also known as foreign exchange brokers but are distinct in that they do not offer speculative trading but rather currency exchange with payments.

It is estimated that in the UK, 14% of currency transfers/payments are made via Foreign Exchange Companies. These companies' selling point is usually that they will offer better exchange rates or cheaper payments than the customer's bank. These companies differ from Money Transfer/Remittance Companies in that they generally offer higher-value services.

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.

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3. WORKING OF FOREX MARKET

There is no central location of this market. However, there are three major centers that handle the majority of transactions: United States, United Kingdom and Japan. The remaining transactions in the market are controlled from Singapore, Switzerland, Hong Kong, Germany, France and Australia.

3.1 Functions of Foreign Exchange Market

The foreign exchange market is a market in which foreign exchange

transactions take place. In other words, it is a market in which national

currencies are bought and sold against one another. A foreign exchange

market performs three important functions:

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Transfer of Purchasing Power:

The primary function of a foreign exchange market is the transfer of

purchasing power from one country to another and from one currency to another.

The international clearing function performed by foreign exchange markets plays a

very important role in facilitating international trade and capital movements.

Provision for Credit:

The credit function performed by foreign exchange markets also plays a

very important role in the growth of foreign trade, for international trade depends

to a great extent on credit facilities. Exporters may get pre-shipment and post-

shipment credit. Credit facilities are available also for importers. The Euro-dollar

market has emerged as a major international credit market.

Provision of Hedging Facilities:

The other important function of the foreign exchange market is to provide hedging facilities. Hedging refers to covering of export risks, and it provides a

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TRANSFER OF PURCHASING

POWER

PROVISION FOR CREDIT

PROVISION OF HEDGING

FACILITIES

mechanism to exporters and importers to guard themselves against losses arising from fluctuations in exchange rates.

3.2 How to make purchase in forex ?

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1.Choose your currency pair

2.Decide on your deal volume

3.Set your loss limits

4.Check again and place your order

5.Set your profit goals

6.Get confirmation

7.Close your position

1. Choose your currency pair

Analyze the market and select a currency pair that you want to trade. Decide

which currency you think will go up, and which one will go down.

Currency pair and indicator value

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2. Decide on your deal volume

Choose the amount of currency you want to trade. The more volume you

trade, the more you can earn or lose. If you're a beginner, it recommends

that you have to make small trades.

3. Set your profit goals

When you make a trade, you should set a profit target. When this target is

reached, your position will be closed automatically, and your profit and

original stake will be transferred to your account.

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4. Set your loss limits

Similarly, you need to decide how much you're willing to lose. Set this and

once again your position will be closed automatically once the price reaches

this limit. Your remaining stake will be transferred to your account.

Remember not to risk all your money.

5. Check again and place your order

Look at the parameters you've just selected. Make any changes that are

needed. Confirm that the price you wanted is still available; the price is only

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available for a short time and may have changed. If it has changed, decide if

you still want to trade. If you do place your orders.

6. Get confirmation

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As soon as you enter your order, the data is sent to our servers. It checks the details and executes your order right away. Once the deal is made, it sends you a confirmation, and your open position appears on your trading terminal.

Click “OK” to confirm an order

7. Close your position

Once the price reaches a point where you want to sell, close you

position and it will transfer the money to your account. Note that your

account balance does not reflect your profit or loss until you do this.

Your position will be closed automatically if the price reaches the

profit or loss limits you set.

Click on the yellow button to close the position.

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3.3 Advantages of Forex Market

Although the forex market is by far the largest and most liquid in the world,

day traders have up to now focus on seeking profits in mainly stock and futures

markets. This is mainly due to the restrictive nature of bank-offered forex trading

services. Advanced Currency Markets (ACM) offers both online and traditional

phone forex-trading services to the small investor with minimum account opening

values starting at 5000 USD.

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There are many advantages to trading spot foreign exchange as opposed to

trading stocks and futures. Below are listed those main advantages.

1. Commissions:

a. ACM offers foreign exchange trading commission free. This is in

sharp contrast to (once again) what stock and futures brokers offer. A

stock trade can cost anywhere between USD 5 and 30 per trade with

online brokers and typically up to USD 150 with full service brokers.

Futures brokers can charge commissions anywhere between USD 10

and 30 on a round turn basis.

2. Margins requirements:

a. ACM offers a foreign exchange trading with a 1% margin. In

layman's terms that means a trader can control a position of a value of

USD 1'000'000 with a mere USD 10'000 in his account. By

comparison, futures margins are not only constantly changing but are

also often quite sizeable. Stocks are generally traded on a non-

margined basis and when they are, it can be as restrictive as 50% or

so.

3. 24 Hour market:

a. Foreign exchange market trading occurs over a 24 hour period

picking up in Asia around 24:00 CET Sunday evening and coming to

an end in the United States on Friday around 23:00 CET. Although

ECNs (electronic communications networks) exist for stock markets

and futures markets (like Globex) that supply after hours trading,

liquidity is often low and prices offered can often be uncompetitive.

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4. No Limit up / limit down:

a. Futures markets contain certain constraints that limit the number and

type of transactions a trader can make under certain price conditions.

When the price of a certain currency rises or falls beyond a certain

pre-determined daily level traders are restricted from initiating new

positions and are limited only to liquidating existing positions if they

so desire.

b. This mechanism is meant to control daily price volatility but in effect

since the futures currency market follows the spot market anyway, the

following day the futures market may undergo what is called a 'gap'

or in other words the futures price will re-adjust to the spot price the

next day. In the OTC market no such trading constraints exist

permitting the trader to truly implement his trading strategy to the

fullest extent. Since a trader can protect his position from large

unexpected price movements with stop-loss orders the high volatility

in the spot market can be fully controlled.

5. Sell before you buy:

a. Equity brokers offer very restrictive short-selling margin

requirements to customers. This means that a customer does not

possess the liquidity to be able to sell stock before he buys it. Margin

wise, a trader has exactly the same capacity when initiating a selling

or buying position in the spot market. In spot trading when you're

selling one currency, you're necessarily buying another.

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3.4 Why Trade In Foreign Exchange?

Foreign Exchange is the prime market in the world. Take a look at any

market trading through the civilized world and you will see that everything is

valued in terms of money. Fast becoming recognized as the world's premier

trading venue by all styles of traders, foreign exchange (forex) is the world's

largest financial market with more than US$2 trillion traded daily. Forex is a great

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market for the trader and it's where "big boys" trade for large profit potential as

well as commensurate risk for speculators.

Forex used to be the exclusive domain of the world's largest banks and

corporate establishments. For the first time in history, it's barrier-free offering an

equal playing-field for the emerging number of traders eager to trade the world's

largest, most liquid and accessible market, 24 hours a day. Trading forex can be

done with many different methods and there are many types of traders - from

fundamental traders speculating on mid-to-long term positions to the technical

trader watching for breakout patterns in consolidating markets.

3.5 Exchange Rates under Fixed and Floating Regimes

With floating exchange rates, changes in market demand and market

supply of a currency cause a change in value. In the diagram below we see

the effects of a rise in the demand for sterling (perhaps caused by a rise in

exports or an increase in the speculative demand for sterling). This causes an

appreciation in the value of the pound.

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Changes in currency supply also have an effect. In the diagram below

there is an increase in currency supply (S1-S2) which puts downward

pressure on the market value of the exchange rate.

A currency can operate under one of four main types of exchange rate

system.

1. FREE FLOATING

Value of the currency is determined solely by market demand for and supply

of the currency in the foreign exchange market.

Trade flows and capital flows are the main factors affecting the exchange

rate In the long run it is the macro economic performance of the economy

(including trends in competitiveness) that drives the value of the currency.

No pre-determined official target for the exchange rate is set by the

Government. The government and/or monetary authorities can set interest

rates for domestic economic purposes rather than to achieve a given

exchange rate target.

It is rare for pure free floating exchange rates to exist - most governments at

one time or another seek to "manage" the value of their currency through

changes in interest rates and other controls.

2. MANAGED FLOATING EXCHANGE RATES

Value of the pound determined by market demand for and supply of the

currency with no pre-determined target for the exchange rate is set by the

Government

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Governments normally engage in managed floating if not part of a fixed

exchange rate system.

3. SEMI-FIXED EXCHANGE RATES

Exchange rate is given a specific target

Currency can move between permitted bands of fluctuation

Exchange rate is dominant target of economic policy-making (interest rates

are set to meet the target)

Bank of England may have to intervene to maintain the value of the currency

within the set targets

Re-valuations possible but seen as last resort.

4. FULLY-FIXED EXCHANGE RATES

Commitment to a single fixed exchange rate

Achieves exchange rate stability but perhaps at the expense of domestic

economic stability

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4. DEALING IN CURRENCIES

The transactions on exchange markets are carried out among banks.

Rates are quoted round the clock. Every few seconds, quotations are

updated. Quotations start in the dealing room of Australia and Japan

(Tokyo) and they pass on to the markets of Hong Kong, Singapore, Bahrain,

Frankfurt, Zurich, Paris, London, New York, San Francisco and Los

Angeles, before restarting.

In terms of convertibility, there are mainly three kinds of

currencies. The first kind is fully convertible in that it can be freely

converted into other currencies; the second kind is only partly convertible

for non-residents, while the third kind is not convertible at all. The last holds

true for currencies of a large number of developing countries.

It is the convertible currencies, which are mainly quoted on the

foreign exchange markets. The most traded currencies are US dollar,

Deutschmark, Japanese Yen, Pound Sterling, Swiss franc, French franc and

Canadian dollar. Currencies of developing countries such as India are not

yet in much demand internationally. The rates of such currencies are quoted

but their traded volumes are insignificant.

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4.1 METHODS OF QUOTING EXCHANGE RATES

There are two methods of quoting exchange rates-

7. Direct method:

For change in exchange rate, if foreign currency is kept constant and home

currency is kept variable, then the rates are stated be expressed in ‘Direct Method’

E.g. US $1 = Rs. 49.3400.

8. Indirect method:

For change in exchange rate, if home currency is kept constant and foreign

currency is kept variable, then the rates are stated be expressed in ‘Indirect

Method’. E.g. Rs. 100 = US $ 2.0268

In India, with the effect from August 2, 1993, all the exchange rates are quoted in

direct method, i.e.

US $1 = Rs. 49.3400 GBP1 = Rs. 69.8700

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4.2 THE ADVANTAGE OF TWO-WAY QUOTE:

The market continuously makes available price for buyers and sellers.

9. Two-way price limits the profit margin of the quoting bank and comparison of

one quote with another quote can be done instantaneously.

10.As it is not necessary any player in the market to indicate whether he intends to

buy of sell foreign currency, this ensures that the quoting bank cannot take

advantage by manipulating the prices.

11.It automatically ensures alignment of rates with market rates.

12.Two-way quotes lend depth and liquidity to the market, which is so very

essential for efficient.

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4.3 A PERFECT PROCEDURE FOR TRADING IN FOREX:

If you interested in learning to trade forex successfully then the most common path for an aspiring trader these days is to search the internet for information to apply immediately to their live forex trading account. The problem is that their search often leads them to destinations where there are plenty of false promises, bad ideas, negativity and an obsession with indicators.Learning How to Trade In Forex in Just Seven Simple Steps:

13. Understand Your Place In The Forex Market

This is very important you must understand that you are very small fish in a big ocean.

In the Foreign Exchange Market the majority of the liquidity is coming from big banks and experienced institutional traders. These are the big fish. The big fish will happily enjoy you as alittle snack.

You are only fooling yourself if you think it will be easy to take money off these big forex traders

You have to learn to swim alongside these big fish and catch the same currents they do. Swimming against them just marks you as prey and sooner or later you will be eaten.

14. Learn to read the Forex Charts and Understand the Foreign Exchange Market

The major forex players are using simple, but proven technical analysis techniques – most commonly horizontal support/resistance, identification of trading ranges, these are the coupled with fundamental themes.

Begin by accepting that the other major participants are highly experienced in the market and they make money because of experience and

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by a complete understanding of the core skills and not because they hold a holy grail of secret indicators.

1. Money Managementa. It is crucial that you understand as a novice forex trader the emphasis

is not on how much you can make from forex trading but on how you manage what you have.

b. This is the most common downfall of all novice traders. It is common place to see a starting trader risk the majority of their account on one or two positions.

2. Focus on the Market a. Many novice forex traders open their forex charting software and

activate their latest hot indicator or tool and proceed to place their trades as per the tools recommendations. This style of forex trading is unlikely to have much long term success.

b. When these indicators fail to generate the required profits then these traders then move rapidly on to another set of indicators.

c. You must focus on the forex market and understand what the indicators are telling you so that you can pick the forex trades which have the best probability of being winners.

3. Plan your trade and trade your plan. a. This is a common saying that seems to get lost on novice traders. It

should be every trader's goal to make pips on each forex trade as per their trading plan. Forex Traders must treat each trade as a business decision by calculating their risk and defining their entries and exits points, those that do not open themselves to big losses when a trade goes bad.

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4. Your mind is your strongest asset and weakest link.

First you must understand the role psychology plays in trading. You must learn to understand your personality traits and how they might affect your trading style.

Second you must make it your aim to never stop learning. You cannot get yourself to a certain level and then become complacent. Every day is a learning experience in some way or other and you must be prepared to learn lessons and invest time in improving your skills and experience. The day you stop learning is the day you should stop trading.

5. Understand The Forex Market is always right or Expect the

Unexpected.

The forex market is an interesting place, but there is one thing every trader needs to learn. Always expect the unexpected and do not get wrapped up in past successes. No matter what your charts or indicators tell you; sometimes the forex market will just do the opposite.

Whatever happens in the market you must maintain an objective outlook on your strategy and the forex market and ensure that bubbles and crashes do not derail you in the long term.

By following these steps and learning to become a forex trader rather than just trading the forex market, you will put you on the path to ultimate success as a profitable forex trader. This is something that 90% of all novice traders fail to achieve.

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5.1 Introduction of Indiainfoline company

The IIFL Group is a leading financial services company in India, promoted by first generation entrepreneurs. They have a diversified business model that includes credit and finance, wealth management, financial product distribution, asset management, capital market advisory and investment banking.

They have a largely retail focused model, servicing over 2 million customers, including several lakh first-time customers for mutual funds, insurance and consumer credit.

This has been achieved due to our extensive distribution reach of close to 4,000 business locations and also innovative methods like seminar sales and use of mobile vans for marketing in smaller areas.

Their evolution from an entrepreneurial start-up to a market leadership position is a story of steady growth by adapting to the changing environment, without losing the focus on our core domain of financial services.

Their NBFC and lending business accounts for 68% of our consolidated income in FY13 and has a diversified product portfolio rather than remaining a mono-line NBFC.

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They are a leader in distribution of life insurance and mutual funds among non-bank entities. Although the share of equity broking in total income was only 13% in FY13, IIFL continues to remain a leading player in both, retail and institutional space.

5.2 History of company ( Indiainfoline)

The India Infoline (IIFL) group, comprising the holding company, India Infoline and its subsidiaries, is one of the leading players in the Indian financial services space.

IIFL offers advice and execution platform for the entire range of financial services covering products ranging from Equities and derivatives, Commodities, Wealth management, Asset management, Insurance, Fixed deposits, Loans, Investment Banking, Gold bonds and other small savings instruments.

IIFL recently received an in-principle approval for Securities Trading and Clearing memberships from Singapore Exchange (SGX) paving the way for IIFL to become the first Indian brokerage to get a membership of the SGX.

IIFL also received membership of the Colombo Stock Exchange becoming the first foreign broker to enter Sri Lanka.

IIFL owns and manages the website, www.indiainfoline.com, which is one of India?óÔé¼Ôäós leading online destinations for personal finance, stock markets, economy and business. 

 The company has been awarded the ?óÔé¼?£Best Broker, India?óÔé¼Ôäó by FinanceAsia and the ?óÔé¼?£Most improved brokerage, India?óÔé¼Ôäó in the AsiaMoney polls. India Infoline was also adjudged as ?óÔé¼?£Fastest Growing Equity Broking House - Large firms?óÔé¼Ôäó by Dun & Bradstreet.  

A network of over 2,500 business locations spread over more than 500 cities and towns across India facilitates the smooth acquisition and servicing of a

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large customer base. All our offices are connected with the corporate office in Mumbai with cutting edge networking technology.

The group caters to a customer base of about a million customers, over a variety of mediums viz. online, over the phone and at our branches. 

5.3 Vision and mission of company

Vision

To become the most respected company in the financial services space in India

Values

Values are IIFL are summarized in one acronym: GIFTS Growth with focused team of dynamic professionals Integrity in all aspects of business – no compromise in any situation Fairness in all our dealings – employees, customers, vendors and

shareholders all included Transparency in what they do – and in how and why they do it Service orientation is our core value, imbibed by all sales as well as support

teams

Business strategy

Steady growth by adapting to the changing environment, without losing the focus on our core domain of financial services

De-risked business through multiple products and diversified revenue stream

Knowledge is the key to power superior financial decisions Keep costs low and continuously strive for innovation

Customer strategy

Remain largely a retail focused organization, driving stickiness through knowledge and quality service

Cater to untapped areas in semi-urban and rural areas, which is relatively safe from cut-throat competition

Target the micro, small and medium enterprises mushrooming across the country through a cluster approach for lending business

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Use wide multi-modal network serving as one-stop shop to customers

People strategy

Attract the best talent and driven people Ensure conducive merit environment Liberal ownership-sharing

5.4 Details about Indiainfoline

Location Mumbai

Corporate office IIFL Centre, Lower Parle

Registered office IIFL House, Sun InfoTech Park, Road No. 16V, Plot No. B-23, Thane Industrial Area, Waggle Estate, Thane, Maharashtra 400604

Year of incorporation 1995

Industry Financial Services

Key businesses Credit & Finance, Wealth Management, Financial Product Distribution, Capital Market Related

Employees 14,000+

Business locations Around 4,000 locations in 900 cities and towns

Global reach Sri Lanka, Singapore, Dubai, New York,Mauritius, UK, Hong Kong,

Listings NSE, BSE

Listing date 17 May, 2005

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Registrars Link Intime India Pvt. Ltd.

Short term debt rating CRISIL A1+ & ICRA (A1+)

Long term debt rating ICRA(AA-) & CRISIL AA-/Stable

Domains www.indiainfoline.com, www.iiflfinance.com,

www.ttweb.indiainfoline.com, www.flame.org.in.

ISIN code INE530B01024

Bloomberg code IIFL IN EQUITY

Reuters code IIFL.BO

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5.5 Features of indiainfoline

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RetailEquity, CommiditiesMutual fundsInsurance distribustionLoans

Corporate Investment bankingCorporate debt

Institutional Institutional equitiesDerivatives

AffluentWealth managemntFinancial advisoryFinancing

5.6 Products and Services

India Infoline provides a gamut of financial products and services. The company offers broking services in the Cash and Derivatives segments of the NSE and BSE.

India Infoline Media and Research Services- This company offers content support to India Infoline in area of broking, commodities, mutual fund and portfolio management services.

India Infoline Commodities- This company is engaged in broking services for commodities segment.

India Infoline Marketing & Services- This is holding company of India Infoline Insurance Services and India Infoline Insurance Brokers. The company is the largest Corporate Agent for ICICI Prudential Life Insurance Company. It is also engaged in insurance broking.

India Infoline Investment Services- This subsidiary is engaged in business such as loans against securities, SME financing, distribution of retail loan products, consumer finance business and housing finance business.

IIFL (Asia) Pte- This subsidiary is engaged in carrying out financial sector activities in other Asian markets.

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Awards

India Infoline has been awarded the ?óÔé¼?£Best Broker in India?óÔé¼Ôäó by Finance Asia. Company?óÔé¼Ôäós Rs. 5 billion short-term debt programme has received an A1+ rating from ICRA. This reflects highest -credit-quality of short-term debt instruments.

Milestones

1995: Commenced operations as an Equity Research firm 1997: Launched research products of leading Indian companies, key

sectors and the economy Client included leading FIIs, banks and companies. 

1999: Launched www.indiainfoline.com  2000: Launched online trading through www.5paisa.com Started

distribution of life insurance and mutual fund  2003: Launched proprietary trading platform Trader Terminal for retail

customers  2004: Acquired commodities broking license 2004: Launched Portfolio Management Service  2005: Maiden IPO and listed on NSE, BSE 2006: Acquired membership of DGCX 2006: Commenced the lendin 2007: Commenced institutional equity

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A Literature Review For forex market

A Study on foreign exchange market movements(1982):

A NEW LOOK Syed A. Hyat, Ph.D. Associate Professor of Finance Central Connecticut State University

Abstract: The literature relevant to the efficient market hypothesis in the foreign exchange market has been examined primarily from the premise that the exchange rates incorporate all available information regarding exchange rate expectations and that it should not be possible to predict one exchange rate as a function of another.

The importance of the random walk model in explaining financial asset price behavior should be noted. Because of its inherent simplicity, the random walk model has an intuitive appeal. In its simplest form, the random walk model suggests that the price of any financial asset moves through time as a random process with uncorrelated changes. Consequently, the best estimate of the one-period ahead asset price is the current asset price (Garbade, 1982).

Guest editorial A STUDY ON FOREIGN EXCHANGE MARKETS(1996):

Two decades ago exchange-rate economics seemed to be in total shambles. That, however, did not last long.

Science proceeds by successive approximations and in the intervening years the foreign exchange market became one of the most heavily researched areas in economics.

The first wave of findings to come out of this new research concerned the centuries-old theoretical construct of purchasing power parity, and elatedly, the

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behavior of real exchange rates.

Here the consensus gradually shifted from the widespread view that PPP had collapsed to the view that it was, in fact, a ‘‘useful empirical first empirical approximation’’ in the long-run, as Lothian and Taylor (1996) put it.

The study on effectiveness of foreign exchange intervention in emerging market countries (2003)

Piti Disyatat and Gabriele Galati

This paper was written while Piti Disyatat was a Visiting Fellow at the BIS. We would like to thank Marian Micu for excellent research assistance, Claudio Borio, Martin Perina, Camilo tovar and Philip Turner for helpful comments on an earlier version, and John Cairns for kindly providing us the IDEA data on intervention by Asian central banks that is perceived by market participants.

All remaining errors are our sole responsibility. The views expressed are our own and do not necessarily reflect those of the Bank of Thailand or the Bank for International Settlements.

A discussion of intervention objectives in the emerging market context can be found in the Moreno paper in this volume and in Canales-Kriljenko et al (2003). King (2003) offers a more general discussion based on experiences of advanced countries.

A survey of empirical studies on the determinants of intervention can be found in Almekinders (1995) and Sarno and Taylor (2001).

See also Ho and McCauley (2003).

Foreign Exchange Market Organization in Selected Developing and Transit Economies :( January 2004 ) Evidence from a Survey

IMF Working Paper Monetary and Financial Systems Department Prepared by Jorge Iván Canales-Kriljenko Authorized for distribution by Shogo Ishii

The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.

The foreign exchange market microstructures in developing and transition economies are characterized by the results from the IMF’s 2001 Survey on Foreign Exchange Market Organization.

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The survey found that these markets are usually unified onshore spot markets for U.S. dollars, where transactions are concentrated at the bank-customer level.

The trading mechanisms are usually dealer or mixed dealer/auction markets; the degree of transparency is often low; settlement systems remain risky; and the scope for price discovery is variable.

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7.1 RESEARCH OBJECTIVE

MAIN OBJECTIVE

To know the perception of investors towards forex market.

SUB OBJECTIVE

To know Most traded currency pair by value in different country.

To know that which currency most traded by value in different economy

To know the awareness of forex market.

To find out the No. of people investing in the market.

To know the area in which people are investing.

To understand the investment objective.

To search the effective factors for forex market.

To know the percentage of investment has been invested in the forex market.

To know the how much riskier is currency market and how much return is people expecting.

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To know people are satisfying with services of company.

To search which sources is most effective for information and guidance.

How to trade in currency with forex with company’s software learning trading different types of currency pair.

7.2. Research Design

A research design is frame work or blue print for conducting the marketing research project. It specifies the details of the procedures necessary for obtaining the information needed to structure and solve marketing research problems.

1.Deciding the subject of Research

Initially we had a lot of ideas for survey-based project.

Then it was mutually decided that the survey sample

should be huge. So we decided to take a subject in which

we can get wide range of sample size.

In order to face perception of people towards forex

market in wide range foreign exchange. In this context

resource are for forex are now a day’s easily available. So

that people are excited and encouraged to invest in forex

market.

So finally our research topic is “A perception of

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investor’s people towards Forex market.”

2. Framing appropriate Questionnaires

The initial steps of our project was to frame a less

complicated questionnaire so that our sample have a

clear idea what is being required from them and save

their precious time.

The questionnaire was constructed to mirror many of

the queries that have been asked in previous studies of

Forex market.

We have covered area which belongs to Stock market.

We have also covered all age of people who are

investing in the forex market.

We have included all type of question which covers our

research appropriately.

We have also included the question which shows the

satisfaction of investors towards company and

brokerage agents.

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3. Space boundaries

Space boundary means the area that we have covered

for the survey. In this research, the scope for the survey

was Ahmadabad and Gandhinagar.

This aspect founds that female are also interested in the

market.

Perception of people is currency investment is safe and

long time investment.

It may be riskier for short time.

Its need potential to generate more return and good

knowledge for currency.

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7.3 Sampling Plan

We have undertaken target -oriented method for sampling.

Our target research included Stock Broking Company, agents, and

High profile people.

Sample size

Our sample is 100. We surveyed 100 samples, which were

bifurcated into 73 are male and 27 are female.

In which 69 are aware about market and only 57 are investing in

the market.

Sample space

The sample space of study consisted of 100 men, women,

belonging to different occupations.

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7.4 DATA COLLECTION PLAN

Basically there are two types of data:

1) Primary data

2) Secondary data

1) Primary data:

The methodology used is to study currency trading and its usage and utility, hedging and arbitrage in currency trading. To study about factors deciding currency fluctuation. What are the instruments to project losses from currency fluctuation? How currency trading is done. Currency trading in India! What are the initiatives taken by Indian government for currency trading? Who are major participants in currency trading?

Primary data are those data which are collected for the first time, taking a

sample, representing a population. It is not a published data, it is problem

specific data collected by the researcher, and it becomes the secondary data

for everybody, other than the researcher. It can be collected in five ways:

1. Observational research

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2. Focus groups research

3. Survey research

4. Behavioral data

For this project we used primary data only. We adopted the survey

method to collect the primary data.

Once the decision of collecting primary data is taken, one has to

decide about mode of collection.

We took the help of a structure questionnaire to collect the

information from the readers.

2) Secondary data:

To keep with pace with the existing market I seek to consult various existing data also in the related company products so that a comparative study is formulated. The sources to be used includes internet, friends working in other companies, faculty members, books.

Secondary data are those data, which are already published. It may be useful for many other persons than the researcher who published it. There are various sources of secondary data collection. They are:

1. Government sources

2. Commercial sources

3. Industry sources

4. Miscellaneous sources

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As our subject is based on psychology of the people, we do not have any

secondary data.

7.5 DATA COLLECTION METHODS ( Contact method)

A market researcher has a choice of three main research instruments in

collecting data namely:

1. Questionnaires

2. Qualitative measures

Tools of techniques

Chart Capture from software mete trader We have chosen questionnaires as the research instrument.

A questionnaire consists of a set of questions presented to respondents.

Because of its flexibility, the questionnaire is by far the most common

instrument used to collect the primary data.

Questionnaires need to be carefully developed and tested before they are

administrated on a large scale.

In preparing questionnaire, a researcher carefully chooses the questions,

their formation and working sequence. The formation of questions can

influence the response.

Market researcher distinguishes between close-end and open –end

questions. Close-end questions specify all the possible answers and

provide answers that are easier to interpret. Whereas open-end questions

allow respondents to answers in their own words and often reveal more

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about how people think. They are useful in exploratory research, where

the researcher is looking into how people think rather than measuring

how many people think in a certain way.

7.6. Limitation of project

Study is limited for following factors:

Currency trading and its usage and utility.

Currency exchange and factor deciding currency

fluctuations.

Forex exchange and how forex trading is done.

Forex brokers.

Owing to the dynamic nature of the global economy in

particular, the finding of the report will not be applicable

after appoint of time.

No practical access to global market exchanges.

Time constraint.

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Analysis of Study and Interpretation of Questionnaire

Demographic questions

GenderNo. of

responds

Male 73

Female 27

MALE FEMALE0

10

20

30

40

50

60

70

8073

27

GENDER

GENDER2

Interpretation:

Form the above depicted chart we can interpret that male gender are more interested in currency market than the female.

The number of male gender is 73 which cover large market. Only 27

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numbers of women invest in currency market that is a positive sign that the women are also taking interest in the currency market.

This shows the increasing education level of female & awareness of this money market in female.

Age ( years)

No. of responds

20-30 31

30-40 43

40-50 16

Above 50 10

20-30 30-40 40-50 Above 500

5

10

15

20

25

30

35

40

45

50

31

43

16

10

Age (years)

Age (years)

Interpretation:

The chart reflects age vise division of currency investor; we can see that the number of people having between 30 to 40 years is more interested in currency market.

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The awareness of currency market is more in this age group & risk taking aptitude is more than other age group, any broking firm can target this age group and can get benefits, at second age between 20 to 30 years are invest more in currency market.

EDUCATIONAL QUALIFICATION

Education Qualification

No. of responds

H.S.C 9

Graduate 54

Post Graduate

32

Other 5

H.S.C Graduate Post Graduate Other0

10

20

30

40

50

60

9

54

32

5

Education Qualification

Interpretation:

The above graph shows the education level of investor. There is 54 of the respondent were graduate & 32 of the respondents were

post graduate. The graduates are more interested to invest in currency market.

Majority of the investor in currency market are graduates. The majority

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investors are graduate & taking much interest in currency market these education criteria investors can be targeted to get benefit to attract by broking firm.

OCCUPATION

Occupation No. of responseGovernment employees

7

Private sectors 28Professional 47

Self employed 14

House wife 4

Government employees

Private sectors Professional (Businessmen)

Self employed House wife0

5

10

15

20

25

30

35

40

45

50

7

28

47

14

4

Occupation

Occupation

Interpretation:

The First of the investors were having business & on second investors are having service awareness of currency market.

The awareness of currency market.

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The majority of the business men were having business of import & export.

The main object of their investment in currency was hedging. Monthly income (Rupees)

Monthly income(Rupees) No. of response≤10,000 8

10,000-20,000 1620,000-30,000 2330,000-40,000 27Above 50,000 26

≤10,000 10,000-20,000

20,000-30,000

30,000-40,000

Above 50,0000

5

10

15

20

25

30

8

16

23

27 26

Monthly income(Rupees)

Monthly income(Rupees)

Interpretation:

The income criteria of the investors were of the investor are having income of between 300000 to 400000 Rs. And on second position 26 of investors were having income between Above 50,000.

The income of the investor in the main influencing factor of inflow for the currency market.

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Q.1 Are you aware about forex market?

AnswerYes 69No 31

Yes No0

1020304050607080

69

31

Awarness

Awarness

Interpretation:

Awareness about forex market is increasing day to day. So gives positive responses of 69.

31 are still not interested due to less knowledge or risk factor.

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Q.2 Do you invest on Forex market?

AnswerYes 57No 43

Yes No0

10

20

30

40

50

60 57

43

Investment

Investment

Interpretation:

In forex market 57 people are investing which increases the transaction foreign currencies.

43 people are not investing due to risk factor or less knowledge about forex market.

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Q.3 what is investment an area which you are presently investing?

0

10

20

30

40

50

60

41

10 10

57

81

1410

Area to invest

Area TO invest

Interpretation:

The graph reflects the investment avenues of the respondent. This all respondents are investing in currency and also invest in several avenues. The 41 respondents are investing in equity.

On second 14 respondents are investing in commodity. The ipo, mutual fund, insurance, sip, & bonds are not so popular to invest in. the much number of equity investors also use to invest in currency market.

The awareness of currency market is very less in India but as a view of

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Equity 41Initial public offering 10

SIP 10Currency 57

Mutual fund 08Bonds 01

Commodity 14Insurance 10

future it’s a developing market.

Q.4 in which currency do you prefer to invest?

TYPE OF CURRENCYUSD 27EURO 15GBP 11JPM 03

USD EURO GBP JPM0

5

10

15

20

25

3027

15

11

3

Currency

Currency

Interpretation:

The survey I have carried out in which 27 of the respondent are invest in USD.

There is more trading volume in USD. The EURO is on second position to be traded. The 15 of the respondent prefer to invest in EURO. 11 of the respondent prefer to invest in GBP.

The more respondent prefer to invest in USD. The volume USD in currency market is

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higher than the other currencies.

Q. 5. What is the primary objective of your investment in forex (currency) markets?

Hedging 27

Volatility 18

Speculation 09

Arbitrage 03

Hedging Volatility Speculation Arbitrage0

5

10

15

20

25

3027

18

9

3

Investment objective

Investment objective

Interpretation

The table reflects that there are 27 of the respondents are investing in currency for their hedging purpose.

Main and primary object to invest in currency is hedging and on second stage speculation is also a one object to invest in currency market.

The investor of currency was having business of import & export. They get benefit from the currency by hedging.

The broking firm can target the importer or exporter for new customers.

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Q. 6. What is the time duration you invest in currency (forex) market?

Intraday 7≤ 1 month 291-2 months 152-3 months 4≥ 3 months 2

Intraday ≤ 1 month 1-2 months 2-3 months ≥ 3 months0

5

10

15

20

25

30

35

7

29

15

42

Investment duration

Investment duration

Interpretation

The time period for holding currency by the investor is less than 1 month, the 29 of the respondent hold investment f or less than 1 month and the 15 of respondent were hold for 1 to 2 months in currency.

There are only 7 of respondent do intraday trading in currency market.

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Q. 7. What factors do you determine at the time of investing in currency?

Economy 27Political 05Industrial 10

Export-import 12Infrastructure 03

Economy Political Industrial Export-import Infrastructure0

5

10

15

20

25

3027

5

1012

3

Factors

Factors

Interpretation

As pre the survey 27 of the respondent determines economic factors before investing in currency and 12 of the respondent determine the export & import position of the country before investing in currency market.

The 10 of the respondent were determining industrial factors before investing. The main factors affect the currency rates are economic factors and the export-imports of the country.

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Q. 8. How many percentage of money do you invest in currency from your income?

≤ 10 % 13

11% -20% 30

21%- 30% 09

≥ 31% 05

≤ 10 % 11% -20% 21%- 30% ≥ 31%0

5

10

15

20

25

30

35

13

30

9

5

Pecentage of investing

Pecentage of investing

Interpretation:

The criteria for investing money from the income are 30 of respondent investing 11 to 20% of money and the second position is 13 of respondent invest less than 10% of money from income in currency market.

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Q.9. which currency do you most depend (rely) on?

USD 25

EURO 16

GBP 11

JPM 05

USD EURO GBP JPM0

5

10

15

20

25

30

25

16

11

5

Currency

Currency

Interpretation

Form the above mention graph we can analyze the greater market share is covered by USD for future investment there are grater no. of investor to invest in USD, the 25 of the respondent are relay on the USD

16 of respondent are relay on EURO. 11 of the respondent think that GBP will rise in future. But as per my opinion the chances of USD & EURO are higher in future.

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Q. 10. Type of return you expect in currency market?

Low 1 2 3 4 5 High2 6 21 24 04

1 2 3 4 50

5

10

15

20

25

30

2

6

21

24

4

Return expected

Return expected

Interpretation:

In the survey I have used like r scale, a 5 point scale to measure the return from the currency market.

As per the respondents response 21 of respondent were neutral and 24 of respondent think currency market gains high return. But 4 of respond think they gain very good return in currency market.

The rates of the currency don’t vary much in a day. Currency market is future market. The investor can earn a handsome profit from this

investment with long term investment.

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Q.11. How much riskier is currency market?

Low 1 2 3 4 5 High01 03 12 16 25

1 2 3 4 50

5

10

15

20

25

30

13

12

16

25

Riskier

Riskier

Interpretation:

The risk in currency market is very low only because of the currency rates were not so volatile.

As per the respondents statement there are 12 of respondent were neutral & 16 of respondent think that currency market is less risky in nature but the 12 of respondent were answered that currency market is high risky.

As far as my opinion the currency rates were less volatile & the similarly less speculate. Currency market is a good opt ion to invest rather than investing in equity or commodity.

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Q.12. which service of broker you give highest weight age?

1 2 3 4Research and advisory based call

3 10 1 2

Less margin 1 8 4 0Law brokerage 1 5 0 3Good trading software

4 4 4 7

1 2 3 40

2

4

6

8

10

12

3

1 1

4

10

8

5

4

1

4

0

4

2

0

3

7Research and advisory based callLess marginlow brokrageGood trading software

Interpretation:

Here, in the chart less margin and good trading software are the most important factor. Less margin gets more response. While low brokerage gets law response because if bad service or risk to lose money.

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Q.13 Do you use any consistent source of information to make trade decision?

IF , yes than following option

Professional trading advisory services 8

General media 5Financial publication 24Cash commodity paper 7NO.(doesn’t use any sources 13

Profes

ional tra

ding advis

ory ser

vices

Genera

l med

ia

Finan

cial p

ublication

Cash co

mmodity pap

er NO.05

1015202530

85

24

7

13

Information sources

Information sources

Interpretation:

Most of people use financial publication because of they have knowledge of market and they are operate it 24 hrs.

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After doing Research we have found some effective way to encourage investors. We found that people avoiding currency market due to risk and high investment.

Acc. To research 69 Male and 31 Female are aware about Forex market. This shows increasing no.of female are interested in the market and also shows that women are a comparing with step by step with global world.

57 % people are properly aware about market and remaining are not interested due to risk factor.

43 % of Age group belong to 30 yrs -40 yrs is more investing in the forex market due to more knowledge and maturity level of understanding about financial management.

Most of graduate people are investing in forex market because they have knowledge of common market also. Post graduate people are less investing next to graduate people.

14 % and 47 % People having Business and professional occupation is more dealing with forex trading. So company has to target these people for investing in the company. It also happens due to import and export with foreign countries. The main object of their investment in currency was hedging.

27 % People With income of 30,000rs to 40,000rs are more investing in the forex market due to proper financial planning and awareness about forex market. Inflow from currency market is also effective factor for the investment.

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Acc to research we have found that investment area like equity, sip, and mutual fund are more convening because of small budget.

Investors are more preferring with USD currency because of more transaction and it is most used at international level. In our research 47 % people prefer USD currency. While 26 % are dealing with EURO.

48 % people are investing in the forex market due to hedging purpose. It gives benefit in import and export.

Time duration of less than 1 month is more preferable for forex market. It covers 50 % by investors.

47 % of Economic factor is most affected on investors due boom, recession, inflation, deflation. While import and export factor is also impacted on investors view.

53 % of people are investing 11%- 20 % of income. This shows people are taking more interest in international market. While 23 % people are investing 10 % of income. Currency market is future market. The investor can earn a handsome profit from this investment with long term investment.

At level of return people are going with 3rd scale of return and at the level of risk they believe that currency market is more risk market.

In case of services people believe in less margin and good trading software. While sources for information are financial publication is well known

source for investor.

Thus, our research is finally found that investors are more preferring USD currency due hedging benefit and useful in export import.

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After such observations and some conclusions made on the basis of that I

would like to recommend some important points, upon which company

should focus and try to grow its business by tapping the market through

making new customers. In this recommendation part of this project work I

am suggesting these points.

First thing which I would like to suggest is the company should focus on its

promotional forces, so that it would be able to convey the product features

to the common people. Once the features will be exposed then only it can

make new customers. Through the survey responses we knew that

advertisements are the most affective medium of creating awareness. So to

differentiate our product and to expose our exclusive benefits we need to

take it out in front of the people.

To create awareness about the product we can take several steps such as:

Arranging various kinds of activities at public gathering.

Placing the customer facilitating desks at various places.

Approach to the various offices to get new leads or customer

contacts.

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In a universe with a single currency, there would be no foreign exchange

market, no foreign exchange rates, and no foreign exchange. But in our world of

mainly national currencies, the foreign exchange market plays the indispensable

role of providing the essential machinery for making payments across borders,

transferring funds and purchasing power from one currency to another, and

determining that singularly important price, the exchange rate. Over the past

twenty-five years, the way the market has performed those tasks has changed

enormously.

Foreign exchange market plays a vital role in integrating the global

economy. It is a 24-hour in over the counter market –made up of many different

types of players each with it set of rules, practice & disciplines. Nevertheless the

market operates on professional bases & this professionalism is held together by

the integrity of the players.

The Indian foreign exchange market is no expectation to this international

market requirement. With the liberalization, privatization & globalization

instituted in India. Indian foreign exchange markets have been reasonably liberated

to play there efficiently. However much more need to be done to make over

market vibrant, deep in liquid.

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BIBILIOGRAPHY

BOOKS

Candlesticks For Support And Resistance 

The basics of trading with candlesticks charts by John H. Forman

The NYSE Tick Index And Candlesticks — by Tim Ord

The Six Forces of Forex — by Scott Owens. A small e-book covering the basic and the main problems of Forex trading.

The Way to Trade Forex — a 1st chapter of the book that will show you not only Forex basics but also some unusual techniques and strategies that can work for the newbie traders, by Jay Lakhani.

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ONLINE DATA

Introduction OF FOREX MARKET, History, Market analysis , Market tools

http://www.forex-market-history.com/calculators-in-a-forex.html

www.forex.com /introduction/593

Online trading Software process www.babypips.com

To know the competitors view www.youtradefx.com

http://www.forex-market-history.com/calculators-in-a-forex.html

TO Know the company detail

India Infoline http://www.indiainfoline.com/Aboutus/

To understand the return and risk of forex market

http://profit.ndtv.com/stock/india-infoline-ltd_indiainfo/reports

To understand the return and risk of forex market

http://profit.ndtv.com/stock/india-infoline-ltd_indiainfo/reports

ANNEXURE

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QUESTIONNAIRE

Dear sir / Madam,

We are students of Global institute of management, Gandhinagar. As part of our curriculum, we are supposed to conduct a survey. So kindly co-operate with us to fill up this questionnaire. It is a part of research study. Our project title is “A STUDY ON INVESTOR’S PERCEPTION TOWARDS FOREX MARKET.” The information provides by you, will be used for study purpose only and will be kept confidential.

PERSONAL DETAILS

NAME: _______________________________________________________________________

ADDERESS: ___________________________________________________________________

CONTACT NO. : (R) _________________________ (M) ___________________________

EMAIL ID: ___________________________________________________________________

Gender Male Female

Age 20-30 30-4040-50 Above 50

Educational Qualification

H.S.C GraduatePost graduate IF ,Other specify

Occupation Government employee

Private sector employee

Professional Self employedHouse wife IF other, please

specify...

Monthly Family income (Rs.)

Below 10,000 30,000-40,00010,000-20,000 40,000-50,00020,000-30,000 Above 50,000

(Questionnaire details)

1. Are you aware about forex (currency) market?

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Yes No

2. Do you invest in currency market? Yes No

3. What is investment an area which you are presently investing?

Equity Currency Commodity

IPO Mutual Fund Insurance

SIP Bonds

4. In which currency do you prefer to invest?

USD GBP

EURO JPM

5. What is the primary objective of your investment in forex (currency) markets?

Hedging volatilitySpeculation Arbitrage

6. What is the time duration you invest in currency (forex) market?

Intraday 2-3 month< 1-2 month > 3 month

7. What factors do you determine at the time of investing in currency?

Economy Industrial –politicalExport-import Infrastructure

8. How many percentage of money do you invest in currency from your income?

≤ 10% 11% - 20%21%- 30% 31%≥

9. Which currency do you most depend (rely) on?USD GBPEURO JPM

10. Type of return you expect in currency market?

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Low 1 2 3 4 5 High

11. How much riskier is currency market?

Low 1 2 3 4 5 High

12. Which service of broker you give highest weight age? (Rate among 1 to 4)

Particular Rank

Research and Advisory based call

Less margin

Law brokerage

Good trading soft ware

13. Do you use any consistent source of information to make trade decision?

Yes No , If yes _____________Professionally trading advisory services financial publicationGeneral media Cash commodity paper

14. Please rank the following (give rank 1 to 5 )

Company Name India Info line Angel broking SharekhanServiceCost( brokerage +Other charges)ResearchTechnologySafety

15. Any suggestion for India Info line in improvement in services.(Feedback) ______________________________________________________________________________

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