FX Primer Session.

What is A Forex Market?

This is a market in which a nations currency is traded for that of another at a mutually agreed rate.
The forex market is simply a money market, the place where speculators exchange one currency for
another.
The Forex market is operated electronically within a network of banks from Monday to Friday.
Largest Market by volume traded in the world.
Active Market Sessions
Flexible working hours. (Any place with a stable internet connection)
(Plan your daily routine around your daily job)
FOREX MARKET HOURS
AM PM
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

SYDNEY

TOKYO

LONDON

NEW YORK
Forex Pairs

Traders mainly trade the most liquid pairs. These pairs have lower costs and more movement.
◦ EURUSD - Fiber
◦ GBPUSD - Cable
◦ USDJPY - Ninja
◦ AUDUSD - Aussie
◦ NZDUSD - Kiwi
◦ USDCAD - Loonie
◦ USDCHF - Swissy
PIP (Price Interest Point)
Pip is the smallest change in value for a Forex quote.

For non-JPY Forex pairs, 1 pip represents the 4th Decimal place and 1 point
represents the 5th Decimal place.
Forex Pairs

Currencies are quoted in pairs. A rate is the value of one currency against
another and is mostly quoted in 4 decimals.

EUR / USD = 1.18463

Base Quote Pip
Currency Currency
Point
Contract Lot Sizes

A Lot is the quantity in units of a base currency. Currencies are traditionally

traded in fixed lots of 100, 1,000, 10,000, 100,000.

A Standard lot size is 100,000 units of the base currency.

1 Standard Lot = 100,000 units
Contract Lot Sizes

Lot Size Units Standard Lot

1 Standard 100,000 1

1 Mini 10,000 0.1

1 Micro 1,000 0.01

1 Nano 100 0.001

Candle sticks

Highest Highest
Price Upper Price
Closing shadow/wick Opening
Price Price
Body

Opening Closing
Price Lower Price
Highest shadow/wick Lowest Price
Price

Bullish Bearish
Candle Candle
Price Movement
Price movement is as a result of supply and demand.
If supply increases while demand remains constant, then the price reduces
If demand increases while supply remains constant the price increases
If the both change at the same time, then the overall price movement tends
towards the stronger side
Market participants demand and supply currencies for different reasons.
Not all market participants attempt to profit from a foreign exchange transaction
The Trading Road map

Technical Analysis

Trading Fundamental
Psychology Analysis

Risk Management
Technical Analysis
Traders want to know where price will go in the future.
Technical traders focus interpreting price on a chart using indicators, naked price
action or a combination of to determine the probable direction the market will go.
Over time, competent traders expect to generate a net positive return.
Support & Resistance
Trading is primarily an analysis of potential turning points or breakout points for entry.
A sweet spot on the chart is a support and resistance zone.
If you look at any chart, you will notice is that price tends to reverse at the same levels
repeatedly.
This is a distinguishing trait of zones, and you may use this characteristic to define and
discover zones on your currency charts.
Identifying Support and Resistance Zones
 Identifying Support and Resistance
Zones
Keep in mind these three tips when you are drawing your zones on the chart.
1. Start with a higher timeframe chart.
2. Use a line chart to find the zones on the chart.
3. Ignore minor zones.
Technical Analysis
Technical analysts have a wide range of tools that they can use to find trends and
patterns on charts. These include moving averages, support and resistance levels,
Bollinger bands, and more. All of the tools have the same purpose: to make
understanding chart movements and identifying trends easier for technical
traders.
Fundamental Analysis
Fundamental Analysis is a broad term that describes aspects that influence
supply and demand of currencies, commodities, and equities. Many traders will
use both fundamental and technical methods to determine when and where to
place trades.

Many of the greatest minds at the major investment banks, global macro funds
around the world use fundamental analysis to create a trading edge in the
markets. Such players tend to influence long term trends and market positioning.
Market Positioning

Inferring major
Knowing current Deducing the Aligning your
market
major macro dominant trades with
participants
drivers theme them
positioning
Interest Rates

Global money is always

An anticipated
Base Interest Rate looking to shift from Interest rate is An anticipated fall in
interest rate hike
(Nominal Rate) from countries with lower probably the biggest interest rates usually
by central banks
central banks is what rates into countries factor in determining causes the currency
usually causes the
influences currency with higher rates for the perceived value to depreciate
currency to
price fluctuations. the highest return. of a currency.
appreciate.
Inflation

One of the biggest It’s generally accepted that The dollar strengthens
Inflation is a steady against other currencies
influences on a moderate inflation comes
increase in the prices of in anticipation for hike in
central bank’s with economic growth. For
goods and services and interest rate. Should the
interest rate advanced economies, the
it is presented as readings fall short of
decision is price optimal rate of inflation is
Consumer price Index expectations, there is
stability (inflation). expected to be between 2- anticipation that rate may
(CPI) in the economic
3% be reduced.
calendar.

Trading in margined products carries high level of risk.

Monetary Policy

National governments and their

corresponding central banking authorities
formulate monetary policy to achieve certain
economic mandates or goals.

Monetary policy boils down to promoting

and maintaining price stability and
economic growth.
Risk Management in Trading

Forex trading has an element of high risk due

to frequent and continuous change in
exchange rates.

One of the fundamental rules of risk

management in the Forex market is that you
should never risk more than you can afford to
lose.

To minimize the likelihood of financial loss,

traders need to have in place some Forex risk
management actions and strategies.
Risk Management in Trading

Trading without
a stop-loss is Once you've set
similar to your stop-loss,
driving a car you should
with no brake never bring it TRADING WITH STOP LOSSES
at maximum down.
speed.

If you are a
position trader, No matter which
with plans to position you have THE TREND IS YOUR FRIEND
hold that ultimately decided
position for an to take, you
extended period shouldn't fight
of time. current market.
Q&A