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Make Forex Trading Simple

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Information about Make Forex Trading Simple
Business-Finance

Published on March 6, 2014

Author: IFCMarkets

Source: authorstream.com

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PowerPoint Presentation: ww w .i f cmar k et s . c om PowerPoint Presentation: Chapter 1: OPENING THE G A TES OF FOREX Chapter 2: CURRENC Y , THE MAIN TRADED INSTRUMENT Chapter 3: WELCOME T O THE UNPREDIC T ABLE WORLD OF TRADING Chapter 4: T OOLS NECESSA R Y T O PREDICT THE MARKET Chapter 5: TRADING IN ACTION: 5 THINGS YOU MUST KNOW Chapter 6: READY T O S T A R T ww w .i f cmar k et s . c om C lick he r e t o sha r e PowerPoint Presentation:  CHAPTER 1 OPENING THE G A TES OF FOREX Y ou may ha v e as k ed y ourself w h y y ou a r e getting in t e r es t ed in the F o r ex mar k et, what att r a c ts y ou that m uch and w h y y ou ha v e decided t o sta r t t r adin g . A c t u all y , the r e may b e ma n y r eason s , but let us no t e that the most im p o r tant one is the inde p enden c e . T he ad v an c ement of the In t ernet made the mar k et a v ailable a r ound the glo b e and t h us p ossible for p eople t o t r ade onlin e . T he r eason of the g ro wing in t e r est is the financial inde p enden c e which is p ossible t o gain th r o u gh going deep in t o F o r ex and t r ading wisel y . No mat t er y ou a r e a d oc t o r , t eache r , manager or a journalist, still y ou may b e i n v ol v ed in this limitless mar k et. He r e y ou do not ha v e t o deal with a n y b oss and ba r e someon e ’ s ap p eal or ange r ; y ou a r e a cc ountable only t o y our p ersonali t y and t h us a r e f r ee t o ma k e y our o wn decision s . A r e y ou in t e r es t ed? L et us int r o du c e y ou some im p o r tant featu r es a b out F o r ex mar k et, which will help y ou in studying this in t e r est- ing a r ea and obtaining p r ofit f r om it. W h a t ? F o r o r dina r y perso n no t engage d i n F o r e x t r adin g , it i s v e r y eas y t o explai n th e definitio n o f F o r e x wit h an exampl e o f t r av ellin g t o dif f e r e n t c ou n t r ie s . W he n a r - r ivin g a t on e c ou n t r y , th e firs t thin g t o d o f o r a visi t or i s t o e x chang e th e mone y o f his/he r c ou n t r y wit h the cu r r en c y o f th e pa r ticula r c ou n t r y . T hi s p r o c es s i s itself pa r ticip a tio n i n F o r e x ma r ke t - e x chang e on e cu r r en c y f o r anothe r . W ho ? In gene r a l , th e F o r e x ma r ke t i s c omp r ise d o f f ou r dif f e r e n t g r oup s . T h e mos t influe n tia l pa r ticipa n t s o f th e ma r ke t a r e the majo r banks . A f e w o f th e la r ges t bank s th a t mak e u p th e in - t e r ban k ma r ke t includ e UBS , Ba r cl ay s C apita l , D eutsch e Ban k , an d C iti g r ou p . In addition , som e g o v e r nme n t s an d thei r c en - t r a l bank s , suc h a s th e E u r opea n C e n t r a l Ban k , th e Ban k o f En - glan d , an d th e F ede r a l R ese r ve , a r e c ommonl y i nv ol v e d i n this g r ou p t o o . T h e ai m o f suc h ma r ke t pl ay er s a s c e n t r a l bank s is no t gettin g a p r ofi t , bu t adjustin g th e cu r r en c y rat e s , an d thu s , th e e c ono m y o f thei r c ou n t r ie s . V e r y o f t en , c e n t r a l bank s make deal s no t di r e c tl y , bu t th r oug h on e o r mo r e c omme r cia l bank s , c on c ealin g thei r a c tivitie s . In fa c t , i t be c ome s o b viou s th a t these bank s a r e no t ‘’jus t ’ ’ ma k in g deal s , bu t als o sugges t thei r o wn p r i c e s , thu s the y a r e v e r y a c ti v e pa r ticipa n t s . A c ti v e pa r ticipa n ts o f th e ma r ke t , a s usua l , mak e deal s u p t o million s o f US D and d o no t us e ma rg i n t r adin g . In F o r e x , suc h pa r ticipa n t s a r e called mar k e t ma k ers . In additio n t o a c ti v e pa r ticipa n t s , the r e a r e pas - si v e one s , whic h al r ead y belon g t o th e se c on d l a y e r . T h e t e r m F o r e x stand s f o r th e F o r ei g n E x chang e an d can b e define d a s a n i nt e r n a tiona l cu r r en c y ma r ket . F o r e x i s v e r y uniqu e i n it s essen c e becaus e i t i s e v e r y whe r e negle c tin g th e fa c t o r o f tim e z on e an d geo gr ap h y . I n c o n t r as t t o othe r p h y sica l ma r ket s , whe r e monopol y can exist , i n F o r e x ma r ke t despi t e th e v e r y dif f e r e n t ma r ket pa r ticipa n t s , the r e i s n o a n y dominan c e , an d th e ma r ket r emain s ou t o f a n y c o n t r o l . A questio n m a y a r ise : wh a t i s e x change d o n F o r ex? T h e ans w e r m a y b e qui t e su r p r isin g f o r y ou : absolu t e - l y “ nothin g ” . Al l th e instrume n t s , includin g th e most popula r cu r r encie s a r e no t p h y sicall y e x change d o n the f o r ei g n e x chang e ma r ket . T h e p r i c e s o f al l F o r ei g n E x - chang e instrume n t s a r e calcul at e d a cc o r din g t o their ma r ke t p r i c e . T h e se c on d l a y e r belong s t o th e i n v estme n t fund s , an d la r ge c or p o r a tion s . T h e pu r pos e o f pa r ticip a tio n i s assu r edl y busi - nes s . T hes e c ompanie s , pe r f o r min g cu r r en c y specul a tion s , put thei r mone y i n secu r itie s o f g o v e r nme n t s an d c o r po ra tion s in v a r iou s c ou n t r ie s . On e o f th e la r ges t i nv estme n t fund s i n the w o r l d i s ‘ ’ Q ua n tu m ’ ’ o f G eo r g e S o r o s . F und s th a t a r e av ailable equa l t o billion s o f dollars : i n fa c t , the y ca n a tt r a c t billion s of dollar s o f bo r r o w e d mone y , s o th e fund s ca n withstan d e v en th e c e n t r a l ban k i nt e r v e n tio n i n th e f o r ei g n e x chang e ma r ke t . T h e rat e o f th e cu r r en c y i s al w a y s chan g in g , flu c tu at e s , an d thi s happen s becaus e o f dif f e r e n t fa c t or s . D u e t o thes e flu c tu a tion s i t be c ome s possibl e t o mak e a p r ofit f r o m specul a ti v e t r ade s . F o r ei g n E x chang e i s th e W o r l d ’ s la r ges t an d mos t a c ti v e ma r ket . I t ope rat e s e v e r y d a y e x c ep t th e w eekend s , an d it s v olum e r eache s u p t o $5 t r illio n a d a y an d su r el y , th e v olum e i s dif f e r e n t f o r v a r i - ou s pa r ticipa n t s . C lick he r e t o sha r e ww w .i f cmar k et s . c om PowerPoint Presentation: W hen? In gene r a l , th e F o r e x ma r ke t ope rat e s 24/ 5 (f r o m M ond a y t o F r id a y) . H o w e v e r , 4 ma r ke t session s a r e distinguished : S y dney session , th e T o k y o session , th e L ondo n session , an d , th e New Y o r k session. H o w? Y ou m a y h av e a question h o w t o be i n v ol v ed in F o r e x ma r ket? T he ans w er is qui t e simple: th r ough b r oke r - age fi r ms! B r okers a r e the ones who g i v e an oppo r - tuni t y t o small i n v es t ors t o initi at e ope ra tions on the F o r e x ma r ke t . Ne w Y o r k open s a t 8:0 0 a m t o 5:0 0 p m ES T (E D T ) T o k y o open s a t 7:0 0 p m t o 4:0 0 a m ES T (E D T ) Sy dn e y open s a t 5:0 0 p m t o 2:0 0 a m ES T (E D T ) L ondo n open s a t 3:0 0 a m t o 12:0 0 n o o n ES T (E D T ) F o r ad v a n tageou s t r adin g i t i s mo r e suitabl e t o t r ad e du r in g the hig h liquidi ty o f th e ma r ke t , whic h take s pla c e whe n se v e r al c ou n t r ie s a r e t r adin g a t th e sam e tim e . In eac h tim e z on e ac r oss th e w o r l d , F o r e x ma r ket s ope rat e i n dif f e r e n t tim e z one s . T hu s , t o tak e ad v a n tag e o f si g nifica n t t r adin g v olum e , i t i s w o r t h y t o fin d ou t whe n F o r e x ma r ke t hour s i n dif f e r e n t c ou n t r ie s o v e r la p . S o , i t be c ome s o b viou s th a t i n cas e o f l o w liquidi ty ta k in g v e r y hig h p r ofi t i s muc h mo r e difficul t , th a t i s w h y e xpe r ien c e d t r ad - er s p r e f e r t r adin g whe n the r e i s hig h liquidi ty an d mo r e chan c es f o r hig h p r ofit s . F or be c oming a clie n t of a b r oke r , one needs t o open an a cc ou n t and make a deposi t . T he deposit r equi r e - me n ts v a r y f r om b r oker t o b r oke r . F or instan c e , IFC M a r kets r equi r es a minimum of $1 per sta r ting t r ad- in g . F or the pu r pose of inc r easing the clie n t ’ s p r ofit s , e v e r y c ompa n y establishes c e r tain c r edit le v e l , which is called le v e r ag e . T he deposi t ed amou n t is multiplied with the le v e r age si z e , and the t r ader t r ades with g r e a t - er lo t , while losing only the money he has i n v es t ed on his/her o wn. T hu s , it m a y be c oncluded th a t f or t r ading with 100,000lot in case of 1:100 le v e r ag e , $1000 depos- it is r equi r e d . W h y? LIQUIDI T Y : F o r e x ma r ke t i s dif f e r e n t f r o m th e ma r kets whe re peopl e bu y o r sel l p r odu c t s, p r ope r t y , e t c. F o r in - stan c e, whe n sellin g a n apa r tme nt , h o w ma n y bu y er s can y o u fin d f o r onl y 1 se c ond ? Z e r o … H o w ma n y o f them ca n y o u fin d du r in g a d a y ? – M a yb e 3-4 . I n c o n t r as t , F o r e x ma r ke t doe s no t h ave suc h limit s, a s a t r ade r m ay open position s an d mak e deal s wit h th e ma r ke t make r onl y in 1 se c on d. H ig h liquidi t y i s highl y a tt r a c ti ve poi n t f o r e v e r y i n v es t o r becaus e i t enable s th e possibili t y o f e nt e r in g and e xitin g th e ma r ke t wit h a n y v olum e. close d, thu s hu r r y u p t o manag e y ou r t r adin g u n ti l F r id ay nig ht . C OS T S : T he clie n t sells the t r aded cu r r en c y with the Bid p r i c e and bu y s with the A sk p r i c e . T he dif f e r en c e be t w een them is called Sp r ead . Su r el y , this sp r ead is dif f e r e n t depending on the cu r r en c y pair and the clie n ts p r e f er l o w sp r ea d , becaus e , in fa c t , it is the c ost of their t r ading a c tivi t y . T he sp r ead is g r e at er f or those cu r r encies th a t a r e t r aded less f r eque n tl y , thus the sp r eads of major cu r r encies is qui t e l o w . IFC M a r kets of f ers l o w and fi x ed sp r eads t o its clie n ts which makes the c ompa n y mo r e a tt r a c ti v e f or the clie n t s . P R OMPTNES S AN D A V AI L ABILI T Y : A s F o r e x ma r ke t o p - e rat e s f o r 2 4 hour s, th e a cc es s i s possibl e a t a n y tim e in c o n t r as t t o s t oc k ma r ke t , whic h i s ope n onl y du r in g the w o r k in g hour s, whic h su r el y m ay no t c o r r espon d t o y our tim e z on e. F o r e x t r ader s d o no t nee d t o w ai t t o r ea c t o n an e v e n t a s i t happen s i n othe r ma r ket s. 2 4 hour s ope ra tion let s t r ader s t r ad e whene v e r the y like : a f t e r w o r k , a t nig h t s, du r in g thei r leisu re tim e, e t c. F o r t r adin g on e need s jus t t o h ave a lap t o p o r a mobil e an d I nt e r ne t c onne c tion . T ake i nt o c onside ra tio n th a t a t th e w eekend s F o r e x ma r ke t is L E VE R A GE : A l l t r ader s h ave a n oppo r tuni t y t o t r ad e with g r e at e r v olum e du e t o th e le v e r ag e whic h i s p r o vide d b y th e b r oke r . M o re p r ecisel y s a yin g , i t i s th e a v ailabili t y t o mak e p r ofi t f r o m a la r g e positio n i n th e ma r ke t f o r a small c os t , k n o w n a s ma r g in . Dif f e r e n t c ompanie s p r o vid e dif - f e r e n t le v e r ag e si z e s. F o r instan c e, IF C M a r ket s suggests u p t o 1:40 0 le v e r ag e. T he re a re som e le v e r ag e limit a tions dependin g o n th e a cc ou n t t ype s. ww w .i f cmar k et s . c om C lick he r e t o sha r e PowerPoint Presentation:  CHAPTER 2 CURRENC Y , THE MAIN TRADED INSTRUMENT C ur r encies: P ri c es and the P ips T h e majo r instrume n t i n th e F o r ei g n E x chang e i s th e cu r - r en c y . C u r r encie s a re w r it t e n i n IS O c ode s, whic h h ave be c om e a t r aditiona l i nt e r n a tiona l p r a c ti c e. T hes e c odes h ave onl y 3 cha r a c t ers : th e firs t t wo cha r a c t er s stan d f or th e c ou n t r y nam e an d th e las t cha r a c t e r stand s f o r the cu r r en c y nam e. sellin g on e uni t o f bas e cu r r en c y . C e r tainl y y o u buy a pai r whe n y o u p r edi c t i t wil l app r eci at e an d sel l it , whe n y o u thin k th a t i t wil l dep r eci at e . F o r exampl e , in cas e o f th e quo t e lik e USD/CH F 0.9355 , i t be c ome s o b - viou s th a t wh a t i s bein g v alue d (th e bas e cu r r en c y ) is on e US D an d th a t it s v alu e i s g i v e n i n t e r m s o f S wiss F r an c (th e quo t e cu r r en c y) . I n gene r a l , th e cu r r encies a r e quo t e d agains t th e U S dolla r . H o w e v e r , the r e a r e a f e w cu r r encie s , whe r e U S D olla r i s quo t e d agains t (B r i t - is h P ound s ( GBP) , E u r o s (EUR) , A ust r alia n dollar s ( A U D ) an d Ne w Z ealan d dollar s (NZ D )). I n F o r e x ma r ke t al l th e cu r r encie s a re quo t e d i n pairs (EUR/US D , GBP/US D ) , becaus e i n t r adin g on e need s t o sel l on e cu r r en c y f o r buyin g anothe r , o r vi c e v ersa . T he firs t cu r r en c y i s k n o w n t o b e th e bas e cu r r en c y , whe r eas th e se c on d on e i s th e quo t e cu r r en c y . T he re i s a measu r eme n t o f th e chang e i n v alu e be t w een th e t wo cu r r encie s, whic h i s calle d a P i p . T h e numbers a f t e r ‘ ’ . ’ ’ a re calle d pip s. I n fa c t , th e pip s a re th e smallest change s i n th e p r i c e o f th e cu r r en c y pair s. W he n s a ying th a t the re w a s a chang e wit h 1 pi p , i n quot a tio n i t implies t o b e a chang e o f 0 , 000 1 (th e f ou r t h symbo l a f t e r c oma). P ip s a re neede d f o r calcul a tin g p r ofit/los s an d th e dif f e r - en c e be t w ee n th e p r i c e s o f BUY/SELL. W he n openin g a BU Y position , th e t r ade r make s his/ he r decisio n base d o n th e e x chang e rat e (cu r r en c y p r i c e) , whic h p r o vide s in f o r m a tio n abou t th e number o f r equi r e d unit s o f th e quo t e cu r r en c y t o BU Y on e unit o f bas e cu r r en c y . I n SEL L position , a s w el l , th e deci - sio n i s base d o n th e e x chang e rat e , whic h sh ow s h o w ma n y unit s o f th e quo t e cu r r en c y y o u wil l ge t when T y p es of C ur r encies: M ajo r , M inor and C omm o di t y T h e lis t o f M ajo r C u r r encie s include s al l thos e cu r r encie s th a t a r e mos t a c ti v el y t r ade d i n th e ma r ke t . T h e p r i c e s o f major cu r r encie s a r e les s unstabl e tha n thos e o f othe r cu r r encie s . US D A me r ica n D ollar EU R I nt e r n a tiona l E u r opea n C u r r en c y - E u r o A U D A ussi e , A ust r alia n D ollar C A D C anadia n D ollar GB P B r itis h P oun d St e r ling CH F SWF - S wissi e , S wis s F r ank whic h a r e base d o n th e e xpo r t o f r a w m at e r ials - oi l , ga s , me t - al s , e t c . A c tuall y , the r e i s a qui t e la r g e r ang e o f suc h cu r r en - cie s , whic h m a y assu r edl y b e include d i n thi s lis t , bu t th e most impo r ta n t one s a r e A ust r alia n dolla r , C anadia n dolla r an d the Ne w Z ealan d dolla r . I t i s als o w o r t h t o k n o w th a t th e major cu r r en c y pair s al w a y s a r e thos e quo t e d wit h th e U S D olla r . I t shoul d b e no t e d th a t the r e a r e cu r r en c y pair s whic h d o not h av e US D neithe r i n bas e no r i n quo t e cu r r en c y ; suc h cu r r en - c y pair s a r e calle d c r os s pair s . In gene r a l , e xpe r ien c e d t r aders dea l wit h c r os s pair s , a s f o r ef f e c ti v e t r adin g wit h the m i t i s r e - qui r e d t o h av e goo d e c onomi c k n o wledg e o f dif f e r e n t c oun - t r ie s . He r e a r e som e e xample s o f c r os s pairs : GBP/J P Y , EUR/J P Y an d GBP/EUR. J PY Y E N Japanes e Y en T h e r es t cu r r encie s a r e c onside r e d t o b e th e M ino r C u r r encie s . A n d , finall y th e C ommodi ty cu r r encie s a r e o f thos e c ou n t r ie s , C lick he r e t o sha r e ww w .i f cmar k et s . c om PowerPoint Presentation:  CHAPTER 3 WELCOME T O THE UNPREDIC T ABLE WORLD OF TRADING Basi c all y , cur r en c y pairs a r e t r aded in 100,000 units (standa r d lots), 10,000 units (mini lots) or 1,000 units (mic r o lots). S t a nd a rd = 1 lot = 100 000 Mini = 0.1 lot =10 000 Mi c ro = 0.01 lot = 1000 Just for k eeping in mind le t ’ s bring an e x ampl e . I f y ou o p en a p osition of 1 lot for GBP/ U SD for the ask pri c e of 1.5000, y ou a r e pu r - chasing 100,000 British P ound while selling 150,000 U S D . In c ase of o p ening a mic r o p osition (0.01 lot), for GBP/ U SD for the bid pri c e of 1,5000 y ou a r e pu r chasing 1000 U S D ollar s , while selling 1,500 British P oun d . Buy/ S ell = L ong/ S ho r t B e f o r e opening a n y position, e v e r y t r ader has t o de t e r mine whether t o open a BUY or SELL position. I f y ou w a n t t o buy the base cu r r en c y and sell the quo t ed cu r r en c y , this means th a t y ou a r e e xpe c ting the base cu r r en c y t o r ise so as t o sell it back a t higher p r i c e . Such positions a r e used t o be k n o wn as L ong position s . I n c o n t r as t , if y ou w a n t t o sell the base cu r r en c y f or buying a quo t e cu r r en c y , this means th a t y ou w a n t the base cu r r en c y t o fall in p r i c e so as t o buy it a t a l o w - er p r i c e . Such positions a r e k n o wn t o be as Sho r t position s . S o , keep in min d , th a t Buy= L ong and S ell=Sho r t . has t w o p r i c es- Bid P r i c e and A sk P r i c e . T hese pairs a r e usual- ly deno t ed b y a slash “/ ” , whe r e a t f r o n t stands the rat e of Bu y , and a f t e r - the rat e of S el l , such as USD / J P Y 104.75/104.85. T he bid p r i c e is the p r i c e a t which the b r oker is r eady t o buy the base cu r r en c y f or the quo t ed on e , while the ask p r i c e is the p r i c e a t which the b r oker is selling the base cu r r en c y f or the quo t ed on e . S o it can be unders t ood th a t the c on- c epts of buying and selling in r el a tion t o y ou a r e a c tually “ r e v erse d . ” Buying and selling in this f o r mul a tion is not per- f o r med b y y o u , but b y the pa r t y of f e r ing y ou a quot a tion. M o r e p r ecisely s a yin g , if y ou need t o buy a base cu r r en c y , y ou need t o look a t A sk p r i c e , while sellin g , y ou need t o take i nt o c onside ra tion the Bid p r i c e . W hen spea k ing about the p r i c es of the cu r r encie s , w e h av e al r eady me n tioned th a t their p r i c es a r e called rat e s . A n y w a y , it is v e r y impo r ta n t t o me n tion th a t in F o r e x e v e r y quot a tion T r ading Example L e t ’ s assum e th a t th e EUR/US D e x chang e rat e i s 1.3088 / 1.3090 . Base d o n som e t echnica l anal y si s y o u h ave as - sume d th a t th e eu ro i s goin g t o fal l i n v alu e. T h a t i s w h y y o u mak e a decisio n t o bu y 10,00 0 EU R (0 , 1 lot ) a t 1.3090 (th e as k p r i c e) . S o , y o u boug h t 10,000EU R an d pai d 13,090 U S D ollar s f o r th at . nee d t o h ave 130.9 $ deposi t e d o n y ou r a cc ou n t s o a s t o mak e th a t t r ad e. I f y ou r p r edi c tion s c om e tru e, an d E u ro r ise s, y o u the n d e - cid e t o sel l a t 1.3199/1.4001 . I n thi s cas e y o u h ave t o sell y ou r E u r o s a t Bi d p r i c e (1.3199) . T hu s, we a re buyin g back th e US D , bu t sellin g a t highe r p r i c e (1 . 3199) . S o , we end u p wit h 13,19 9 US D . A s th e b r oke r take s th e 13,09 0 US D , ou r p r ofi t be c ome s 109$ . N o on e ha s t o h ave th a t 13,09 0 U S D ollar s i n o r de r t o buy E u r o . Y ou r deposi t e d mone y m ay b e muc h les s, bu t due t o th e le v e r ag e p r o vide d b y th e b r oke r y o u wil l h ave the oppo r tuni t y t o t r ad e wit h hig h v olume s. Y o u jus t nee d t o deposi t a n amou nt , whic h i s c onside r e d t o b e th e ma r g in f o r p r o vidin g y o u wit h highe r vi r tua l c r edi t amou nt . F or e xampl e, y o u m ay h ave 1:10 0 le v e r ag e. I n thi s cas e y ou ww w .i f cmar k et s . c om C lick he r e t o sha r e PowerPoint Presentation:  CHAPTER 4 T OOLS NECESSA R Y T O PREDICT THE MARKET P ri c e m o v ements de p end on v e r y ma n y f a c t ors such as e c onomic c ondition s , p oliti c al p olicie s , e c onomic announ c ements made b y influential official s , and ma n y mo r e . S o , it is still p ossible t o p r edi c t the mar k et. T he r e a r e mainly 3 analyti c al meth o ds in F o r ex mar k et : t echni c al A nalyti c s , F undamental and S entimenta l . W e will r efer t o all of them sepa r a t el y . T echni c al A nal y sis T his t ype of anal y sis is based on the assumption th a t the t r end of the e x change rat e is al r eady in c o r po rat ed in the hi s - t o r y of their past flu c tu a tion s . T he basis of such an assum p - tion is th a t the his t o r y t ends t o r epe at . A t r ade r , using t echni- cal anal y si s , builds cha r ts of cu r r en c y rat e s , finds t r end lines on those cha r t s , de t e r mines the shape of a t r end r e v ersal and calcul at es v a r ious m a them a tical indic at or s , on the basis of which makes the decision t o open a long or sho r t position. Spea k in g abou t t echnica l anal y si s i t i s highl y impo r ta n t t o me n tio n th e t ool s th a t a re use d b y th e t r ader s most o f t en : t echnica l indic at or s an d p a t t e r n s. T he re i s a qui t e la r g e r ang e o f suc h t ool s, bu t we wil l illust rat e th e most use d ones: • TREN D LINE S - lines joining higher and higher l o w poi n ts (upt r end) or l o w er and l o w er high poi n ts (d o w n t r end). P r i c - es b r ea k ing th r ough these lines can poi n t out the be g inning of a possible change in p r i c e di r e c tion. C e r tainly it is impo r ta n t t o understand th a t the c onc r e t e p r e - di c tion is impossibl e , because the fa c t ors af f e c ting the cu r - r en c y rat es a r e p h y siolo g ica l , politica l , e c onomi c , and so on. T he r e is no a n y p h y sical l a w th a t af f e c ts the ma r ke t , based on which analytics m a y make 100% p r edi c tion s . • M O VIN G A VE R A GE S - smooth out past m o v eme n ts and indic at e a possible new t r end if the p r i c e m o v es th r ough the av e r ag e . • R E VERSA L P A T TERN S - such as head-and-shoulder s , t ops and bot t om s , t r iple t ops and r ounded t op s . I n t echnical anal y sis of the F o r e x ma r ket t r ading f r ames a r e gene r ally c onside r e d . I n fa c t , the time f r ames a r e the f ol- l o wing: 1 minu t e , 5 minu t e s , 15, 30, 60, 1 d a y , 1 w eek and 1 mo n th. Nume r ical study of the time f r ames is not v e r y c om- f o r tabl e , and is almost ne v er used b y t r aders f or f o r ecastin g . M ainl y , t empo r a r y cha r ts a r e buil t . • SUPPOR T AN D RESIS T ANC E - p r i c e poi n ts th a t a ma r ket has had difficul t y m o ving th r ough in the pas t . • RE L A TIV E STRENGT H INDI C A T OR S - sh o w whether the ma r ket can be c onside r ed o v e r boug ht . B y Cha r t anal y sis it is implied th a t f or p r edi c ting the ma r ket solely gr aphical images of the ma r ket a r e used (p r i c e gr aph- ic s , v olume gr aphics) and its gr aphical model s . A c tually these a r e the simplest methods as they do not r equi r e a n y so ft w a re . S o , 5 basic t ypes of cha r ts m a y be distinguished: T ic k cha r t Lin e cha r t B a r cha r t J apanes e c andlesticks P oi n t an d figu r e cha r t • FIBON A C C I L E VEL S - le v els th a t indic at e a c o n tinued m o v e in the cu r r e n t di r e c tion is b r eache d . • M A C D - M o ving A v e r age C o n v e r gen c es/di v e r ge r en c e used t o help spot ea r ly t r ends and t r end r e v ersal s . • C Y CLICI T Y INDI C A T OR S - ma r kets go th r ough c y cles of bullish and bea r ish phases with pe r iods in which they t end t o r etu r n t o their av e r ag e . C y clici t y indic at ors help r e v eal such c y cle s . C lick he r e t o sha r e ww w .i f cmar k et s . c om PowerPoint Presentation: F undame n tal A nal y sis T his t ype of anal y sis studies the mac r oe c onomic e v e n t s , political ne w s and other e v e n ts of the w o r ld which som e - h o w af f e c t the rat es of the cu r r encie s . T he main dif f e r en c e be t w een the fundame n tal and T echnical anal y sis is th a t the F undame n tal one is based on the p r inciple th a t the p r i c es of the cu r r encies on the F o r e x ma r ket a r e the r efle c tion of su p - ply and deman d , which in their tu r ns depend on fundamen- tal fa c t ors of the e c ono m y . I n c o n t r as t , t echnical anal y sts do not c onsider the study of the r easons of p r i c e changes im- po r ta n t and put an emphasis only on the study of the p r i c es themsel v e s . change d . I n c o n t r as t , fundame n tal anal y sts p a y high a t t en- tion t o the fa c t ors af f e c ting th a t chang e . S o , wh a t fa c t ors h av e the most f ocal af f e c t on the cu r r en c y p r i c e changes? GD P ( G r os s D omesti c P r odu c t) T h e v olum e an d dynamics o f g o v ernme n t e x p enditu r e T h e v olum e an d dynamics o f in c om e t o th e st a t e budget Defici t / surplu s o f th e budget T h e agg r eg a t e c onsumption T h e agg r eg a t e pri v a t e i n v estme n t T h e l e v e l o f pri v a t e s a vings T h e v olum e o f th e e x p o r t T h e v olum e o f th e im p o r t Unempl o yme n t I nfl a tion I t should be me n tioned th a t t r aders m a y not wish t o spend their time on studying F undame n tal anal y sis and doing it themsel v e s . M ost of all they p r e f er f oll o wing the p r o f ession- al financial anal y st s . Such k ind of anal y sis is a v ailabl e , b e - cause it is published in ne w spaper s , is p r ese n t in W e b , on T V and R adi o . I n addition, the r e a r e b r okers which p r o vide their o wn analytics on their w ebsi t es which makes the p r o c ess of t r ading much mo r e easy f or the t r ader s . E v e n ts af f e c ting the ma r ket m a y be distinguished be t w een 2 g r oups: e xpe c t ed and un e xpe c t e d . T hese e v e n ts include the public a tion of v a r ious e c onomic indic at or s , which c on- t r ibu t e t o p r edi c tion of up c oming impo r ta n t e v e n t s . I n c on- t r as t , un e xpe c t ed e v e n ts m a y not be f o r ecas t ed in a n y w a y because the g r oup of such e v e n ts includes n a tu r al disas t er s , political r e v olution s , a c ts of t e r r o r ism, e t c . A cc o r ding t o F undame n tal anal y sis p r edi c ting the chang- es of the p r i c es is possible th r ough p r edi c ting the fa c t ors which af f e c t the supply and deman d . S o , the dif f e r en c e be t w een the t w o anal y sis methods is the f oll o wing: f or t echnical anal y sts if the p r i c es h av e change d , then “ som e - thin g ” has changed in supply or deman d , th a t “ somethin g ” is not impo r ta n t a n y longer because the p r i c es h av e al r eady S e n time n tal A nal y sis T he name of the anal y sis al r eady implies th a t it deals with the mood and se n time n t s , and su r ely in this c o nte x t it deals with the se n time n ts of the ma r ket pa r ticipa n ts-t r ader s . I n c o n t r ast t o t echnical anal y si s , which f ocuses on the past m o v eme n t s , se n time n tal anal y sis a t t empts t o r eali z e wh a t is d r iving t r ader decisions f or n o w and the immedi at e futu re . D u r ing the t r ad- ing p r o c ess e v e r y pa r ticipa n t has his/her opinion, and su r ely some g r oups a r e f o r me d , th a t as a r esult m a y influen c e the ou tc ome of the t r adin g . S o , they f o r m a gene r al se n time n t of the ma r ke t . Understanding and assessme n t of se n time n t is qui t e an ef f e c ti v e oppo r tuni t y t o understand h o w its pa r tici- pa n ts a r e going t o a c t in p r ese n t and near futu re . ww w .i f cmar k et s . c om C lick he r e t o sha r e PowerPoint Presentation:  CHAPTER 5 TRADING IN ACTION: 5 THINGS YOU MUST KNOW 1 e n t w a y s . S ome of them judge the ma r ket as a v e r y “ W hen y ou k n o w b et t er y ou do b et t e r . ” Dif f e r e n t people think about F o r e x ma r ket in dif f e r - thos e , who h av e e c onomic educ a tion, a r e able t o be in- v ol v ed in F o r e x. E v e r y individual m a y sta r t studying F o r e x and needs t o k n o w the basic things in o r der t o sta r t . T he most impo r ta n t things ne c essa r y t o t r aders is the analytic s , which is a p r e c ondition t o su cc es s . B esides the analytic s , the be g inners should understand th a t e v en when sta r ting t r ad- ing they m a y al w a y s de v elop their s k ill s , because F o r e x is not an a r ea with a n y limits in t e r ms of ad v an c eme nt , thus e v e r y d a y is possible t o lea r n a new thin g , which has be c ome qui t e easy with the help of I nt e r ne t . c onfusing sphe re , and think th a t t r ading in F o r e x is v e r y difficul t . I n c o n t r as t , others think th a t t r ading is v e r y easy and does not r equi r e a n y k n o wledg e . S o , who is r ig h t? A c tuall y , both vie w s a r e w r ong: F o r e x ma r ket is not a c om- plic at ed and difficult on e , but a t the same time e v e r y one who w a n ts t o sta r t t r ading needs t o h av e k n o wledge about the ma r ket so as t o be able t o make p r ofit ra ther than losses f r om i t . Su r el y , this does not mean th at , f or e xampl e , only 2 Just Do it y oursel f . T r ading plan. T r ading in F o r ei g n E x change ma r ket is a v e r y r is k y p r o c es s . M ainl y , the r eason people lose a t the be g inning is th a t they do not h av e enough • Y our obje c ti v e in t r ading – it should be y our ta r get or an e xpe c t ed r esult (in t e r ms of p r ofit) f r om y our t r adin g . • U se of t r ading st rat e g ies th a t h av e been p r o v ed t o w o r k in the pas t . k n o wledg e , h av e not e v er t r ained and studied the ma r ke t , do not k n o w h o w it w o r k s . O f c ourse in this case it is easy t o suf f er losse s . • T r ading st rat e g ie s , use of anal y sis based on which y ou will decide t o e nt er the ma r ke t . Y ou should h av e y our t r ading plan be f o r e sta r ting t r adin g . Ne v er f oll o w someon e ’ s e xpe r ien c e , because somebod y ’ s st rat egy will not ne c essa r ily w o r k f or y o u . Y ou had bet t er f ol- l o w y our o wn ma r ket vie w s , r isk t ole r an c e le v el and make y our o wn t r ading plan. Y our t r ading lan should include the f oll o wing esse n tial aspe c ts: • H o w y ou will decide when t o e xit a t r ad e . T his is also a r e - sult of y our understanding of the t r ading st rat e g ies and the p r oper use of t echnical anal y sis and cha r t p a t t e r n s . • D efinition of y our r is k -manageme n t s y s t em. 3 Kn o wledge is of no v alue unless y ou put it i n t o p r a c ti c e . N o m a t t e r h o w cu r iou s y o u a re tow a r d s the F o r e x ma r ke t , y o u shoul d understan d th a t i n o r - de r t o h ave a bet t e r understandin g o f th e ma r- ni t y t o t r y y oursel f i n D em o a cc ou n t withou t a n y deadlin e. B y thi s w ay y o u wil l stud y e v e r ythin g y o u wil l nee d i n fu - tu re r ea l t r adin g . T hu s, ope n a r ea l a cc ou n t an d i n v es t r eal mone y onl y whe n y o u f ee l su re y o u a re r ead y f o r e nt e r ing th e w o r l d o f t r adin g . ke t , an d th e w ay th e quot a tio n w o r k s, y o u nee d firs t o f all t r ad e i n D em o a cc ou nt . IF C M a r ket s g i v e s y o u a n oppo r t u - C lick he r e t o sha r e ww w .i f cmar k et s . c om PowerPoint Presentation: 4 Y o u ’ d b et t er manage y our risks! • Y ou do not need t o r isk mo r e than 1% of y our t otal capita l . T his will help y ou t o av oid suf f e r ing high losses on a n y t r ad e . • D e t e r mine y our position si z e based on h o w much y ou will lose if the s t op is t r igge r ed a t the indic at ed le v e l , and the 1 per c e n t rul e . Y ou should k n o w in ad v an c e h o w much the likely maximum loss will be on the t r ad e . • U se of s t op losse s . T hese o r ders a r e f or closing y our posi- tion a t a pa r ticular p r i c e so as t o limiting losse s . St op losses a r e esse n tial f or r isk manageme nt , and r equi r e close study so th a t y ou use them app r op r i at ely f or y our position si z e and amou n t a t r is k . • C o n t r ol y our emotion s , which m a y o v e r rule the situ a tion and make y our t r ading st r essful and ne r v ou s . D o n ’ t f o r get th a t ra tionali t y is the key t o su cc essful t r adin g . 5 C onfiden c e – half the b a ttl e . I t w as al r eady me n tioned about the r is k y cha r a c - t er of t r adin g . I n spi t e of the dif f e r e n t methods of anal y sis th a t a r e used b y the t r ader s , still ev- m a y go in another di r e c tion, thus r esulting in high losse s . A n y w a y , the most impo r ta n t think while t r ading is t o r emain ps y cholo g ically balan c ed and st r on g , because when falling i nt o dep r ession, y ou m a y not make a ra tional decision. Y ou just need t o be r ela x ed so as not a c t ne r v ously and i r ra ti o - nall y . e r y one should k n o w th a t the ma r ket cannot be p r edi c t ed b y 100%. Su r el y , people i n v est much money in F o r e x, and it sometimes tu r n t o be v e r y inef f e c ti v e because the ma r ket ww w .i f cmar k et s . c om C lick he r e t o sha r e PowerPoint Presentation:  CHAPTER 6 READY T O S T A R T C h o ose a b r o k er T h e choi c e o f b r oke r i s v e r y impo r ta n t becaus e th e t r ad - e r deal s wit h i t r ega r din g a n y m a t t e r an d su r el y i t i s v e r y impo r ta n t t o r e f e r t o a trus t e d on e, wit h whic h y o u m ay w o r k f o r a lon g tim e. He re a re th e mos t impo r ta n t f e a - tu r e s t o tak e i nt o c onside ra tion: o n c ommoditie s. On e mo re thin g t o tak e i nt o a cc ou n t is fi x e d sp r ead s. S o , p ay specia l a t t e n tio n t o th e sp r ead s t o b e fi x e d. DEPOSI T M E THOD S – th e w e b si t e shoul d als o c o n tain thos e method s th a t a re impleme nt e d f o r t r ans f e rr in g i n - v estme nt . T hes e method s a re als o specifi c f o r eac h b r oke r . A nothe r impo r ta n t poi n t i s th a t th e b r oke r ag e c ompa n y b e REGISTERE D i n a specifi c pla c e unde r a specifi c nu m - be r . T h e legali t y o f th e b r oke r se r v e s a s a stimul a tin g fac - t o r f o r t r ader s. A f t e r al l, e v e r y on e need s t o b e i n v ol v e d in lega l an d secu re ope ra tion s. FORE X EDU C A TIO N – i n thi s se c tio n on e i s abl e t o get a gene r a l notio n abou t F o r e x t r adin g , pa r ticula r l y h o w t r adin g i s r eali z e d i n F o r e x , wh a t th e F o r e x anal y si s meth - od s a re, h o w t o handl e them , wh a t ma r g i n t r ad e i s, wh a t on e need s t o k n o w abou t cu r r en c y pair s e t c .. C ON T A C T MEAN S – withou t a n y c o n ta c t mean s a b r oke r - ag e c ompa n y canno t b e c onside r e d a p r ope r l y ope ra ting on e. A mon g al l c o n ta c t mean s ( T elephon e, E- M ai l, S k yp e, C allbac k , an d Li ve Ch a t ) li ve suppo r t pl a y s a v e r y si g nif - ica n t r ol e. I t pa r tiall y r ep r ese n t s th e c ompa n y ’ s imag e, it s quali t y . T h e mo re pun c tua l, th e mo re p r ecis e i t i s, the highe r th e c ompa n y ’ s ra tin g wil l b e. P L A TFORM S – e v e r y b r oke r ag e c ompa n y suggest s a c o u - pl e o f t r adin g pl a t f o r m s, mo r e o v e r a b r oke r ag e c ompa n y p r o vidin g it s o w n pl a t f o r m i s likel y t o h ave a n ad v a n tage o v e r other s. P r o c edu r e s f o r openin g a n a cc ou n t with eac h o f the m a re t o b e desc r ibe d i n details ; othe r wis e, t r ader s wil l fa c e r ea l difficultie s. A CC OUN T T Y PE S – eac h b r oke r ag e c ompa n y ha s v a r ious a cc ou n t t ype s. T he y dif f e r f r o m eac h othe r b y minimum an d maximu m deposit s, a s w el l a s b y minimu m an d ma x - imu m le v e r ag e ra tio s. T h e ra tin g o f th e c ompa n y als o depend s o n th e abili t y t o T R ANSFE R MONE Y A S F AS T A S POSSIBLE . T h e v eloci t y o f t r ans f er s i s on e o f th e indic at or s o f a b r oke r ag e c omp a - n y t o b e highl y - qualifie d. T R ADIN G INST R UMEN TS – thi s i s a v e r y si g nifica n t poi nt , sin c e the y a re no t th e sam e f o r al l b r oker s. T hey g r e a tl y dif f e r amon g th e b r oke r ag e c ompanie s. T h a t di f - f e r en c e lie s i n th e v a r ie t y o f cu r r en c y pair s a v ailabl e f or t r adin g , a s w el l a s i n th e v a r ie t y o f C o n t r a c t f o r Dif f e r en c e t r adin g . F o r e xampl e on e b r oke r ag e c ompa n y m ay c r e - at e a n oppo r tuni t y t o t r ad e wit h CFD s o n equitie s, an - othe r on e wit h CFD s o n indi c e s, th e thi rd on e wit h CFDs H a vin g al l th e in f o r m a tio n ab o ve w r it t e n i n min d an d the f eelin g o f e n thusiasm , y o u m ay al r ead y sta r t studying thi s i nt e r estin g ma r ke t . F o r som e o f y o u i t m ay b e a new sphe re o f a c tivi t y , an d y o u wil l nee d t o b e p a tie n t and positi ve i n o r de r t o su cc ee d. Spen d y ou r tim e ef f e c ti v ely an d y o u wil l defini t el y mak e hig h p r ofit s f r o m F o r e x . B e r is k y , a s “Nothin g v e n tu r e d nothin g gaine d . ” C lick he r e t o sha r e ww w .i f cmar k et s . c om PowerPoint Presentation: F o r eign E x change B o oks F or e x for the B eginners B y V ik t or Ba r ishpolets C urren c y Op e r a tions B y S ou r en Liselott Essentials of F oreign E x ch a nge T r ading B y James Chen C urren c y T r ading for D ummies B y M a r k G ala n t and B r ian D olan A n Intr o du c tion t o E qui t y M a r k ets B y R eu t ers F und a men t al A na l y sis of In t ern a tional C urren c y m a r k ets B y Li k h o vid o v V . N. I n t ernet S ou r c es h ttp:// ww w .i f cma r ket s . c om/en/t r ading-ps y chology ww w .i f cmar k et s. c om C lick he r e t o sha r e

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