“ The essential quotes to always keep in

mind before getting into Forex Trading

Business”
Join Us “ Together We Grow”
FOREX TRADING
TUTORIAL – 2021
Session : 1
BY : TEAM MASTER MANAGE
What is forex?
BENEFITS OF FOREX TRADING
Need to
know who
are involved
in Forex
Markets ?
How can we access to Forex Markets ?
• 1st we need a Forex
Broker to get an access to
Forex Markets
• A Forex broker is simply a
vehicle that gives
individuals like us access
to the markets.
• It’s an intermediary or a
middleman between you
the trader and the foreign
exchange market that
facilitates your trades,
both the buys and the
sells orders.
• Usually, they are licensed
and regulated by national
regulatory bodies.
What is the role of a Forex Broker ?
Different Types of Forex
Brokers
How Dealing Desk (DD) brokers or Market Makers
(MM) operate in Forex Markets ?
No Dealing Desk Brokers (No-DD) which can be
further divided into three separate
categories:
ECN BROKER
STP BROKER
 DMA : Direct Market Access

 Direct Market Access brokers works on NO-Dealing Desk model.

 The moment they receive an order, they send it immediately to several liquidity
providers in their list such as other brokers, banks or exchanges.
 What is Liquidity in Forex Markets ?
• Liquidity providers are often banks, financial institutions,
and brokers also known as market makers. Liquidity
providers are the market players that are making the sale
or purchase of assets.
• Liquidity provider increases the liquidity of the market by
connecting the brokers and traders for settling the trading
transactions. A higher liquid market is desirable in order to
reduce the cost of trading because the higher liquidity
causes the spread to squeeze.
• The role of the liquidity provider is very important in order
to protect the market against the volatility and support
the volume of the trading transactions.
• Generally in forex trading operations, trader’s place their
trading orders with the brokerage and the broker’s passes
these orders to the liquidity providers (banks, investment
institutions, and other market makers) for execution of
the trading transaction and charge the fee or commission
in the shape of spread. This is how transparent forex
trading should look like.
Tier -1 Liquidity providers
 What's traded in the Forex Market?
CURRENCIES COMMODITIES

CFD’S CRYPTOCURRENCIES
TYPES OF CURRENCY PAIRS IN FOREX MARKET
 The major currency pairs on the
forex market are the EUR/USD,
USD/JPY, GBP/USD, and USD/CHF.

 The four major currency pairs are

some of the most actively traded
pairs in the world, along with the so-
called commodity currency pairs:
USD/CAD, AUD/USD, and NZD/USD.

 The EUR/USD is by far the most

heavily traded currency pair in the
world and is popular among
speculators due to its large daily
volume.
Minor Currency Pairs

 When a currency pair doesn’t include the US dollar,

it’s called a minor currency pair or a cross-currency
pair.
 The most widely traded minor pairs consist of the
euro, yen or British pound.
 The spreads are often seen higher with Minor
Currency Pairs compare to Major Currency Pairs.
Exotic Currency Pairs
 An exotic currency pair includes a
major currency and the currency
of a developing economy (such as
Brazil or South Africa).

 You won’t find exotic pairs as

often as you’ll find major or
minor pairs, which means the
spreads can be higher when
trading them.

 Low Liquidity , Volatility & High

Spreads.

 Avoid Trading Exotic Pairs.

 COMMODITIES TRADED ON FOREX MARKETS

GOLD : XAU USD , XAU EUR SILVER : XAG USD NATURAL GAS:
N.GAS,NATGAS

UK OIL US OIL
 STOCK VALUE OF CERTAIN COMPANIES IN A PARTICULAR AREA ARE
CALLED CFD’S.
 BY TAKING A CFD POSITION, A TRADER IS ESSENTIALLY AGREEING TO
EXCHANGE THE DIFFERENCE IN PRICE OF AN INDEX FROM ONE TIME
PERIOD TO ANOTHER. INDEX CFDS ARE AVAILABLE TO COVER ALL THE
KEY INDICES AROUND THE WORLD, WHICH ALLOWS THE TRADER IN
ONE COUNTRY TO TAKE PART IN THE WORLD MARKETS.

U.S INDEX
 AUSTRALIAN INDEX :
AUS200 / ASX 200

JAPANESE INDEX GERMAN INDEX:DAX UK INDEX: FTSE100

 5 Major Forces That Drive the Forex Markets
• Interest rates impact the capital flow between different countries. If the interest rates in one
1.Interest country are high and are expected to increase further in the future, it makes investing in
instruments such as fixed income securities of that country more attractive. This causes
Rates % •
increased foreign investment inflow, which boosts the demand for the local currency.
With a higher demand, the value of the currency appreciates with respect to other
currencies.
• Similarly, lower interest rates can trigger an outflow of capital from the country. This can
lead to a depreciation in the value of the domestic currency. However, during the Covid-19
pandemic, central banks across the world have been keeping interest rates low to bolster
their economies, allowing businesses and individuals to access cheaper loans.

2. Inflation • Currency exchange rates are also affected by changes in inflation rate. A country with a lower
inflation rate, compared to another nation, would experience a comparative appreciation in
its currency value. Conversely, a country with a higher inflation rate is likely to witness a
depreciation in its currency value. This is because with inflation, the amount of goods and
services that can be bought with the domestic currency declines. In other words, inflation
makes your money less valuable. Stable economies, such as the US, tend to have lower
interest rates.
3. Trade Balance • Trade balance is the difference between the value of exports and imports of a
country. A positive trade balance helps the domestic currency value appreciate. This is
because positive trade balance means that there is high demand for the goods and
services of the country, which means that capital is flowing into the nation. Similarly,
if the country is importing more than it is exporting, there would be a trade deficit.
This would lead to the domestic currency’s value declining.

4. Geopolitical • The political stability of a country would have a positive impact on its currency value.
Stable nations attract more foreign investment. This increases the demand for the
local currency, helping the domestic currency’s value appreciate. On the other hand,
political instability, protests and civil wars can send the value of the domestic
Conditions currency tumbling.
• Political relations between countries also affect the forex market. For instance, the
deteriorating relations between the US and China sparked off

• Also known as public debt, sovereign debt or public interest, this is the debt owed by
5. National Debt a country’s central government. When the government collections in taxes are lower
than the spending, the government often resorts to debt to fill the gap. This creates a
perception that the government is not fiscally responsible and that the nation might
have an unstable economy. This, in turn, attracts lower foreign investment, reducing
the value of the domestic currency. Similarly, if there is low debt, the local currency
gains in value, since investors gain confidence in the government.
 FOREX MARKET TIMINGS IN INDIA
LONDON 12.30PM – 10.30PM

TOKYO 6.30AM – 2.30PM

NEW
YORK
6.30P
M–
3.30A
M

Sydney 3.30 AM – 12.30 PM

 As of now we have learnt about :

 What is Forex ?
 Who are involved ?
 How to Access Forex Markets ?
 What is the role of a Forex Broker ?
 Different types of Forex Brokers & how they operate ?
 What is Liquidity in Forex Markets ?
 What are Major Currencies & their Pairs ?
 What are Minor Currencies & their Pairs ?
 What are Exotic Currencies & their Pairs ?
 What are the Commodities traded in Forex Market ?
 What are CFD’S ?
 What are the factors driving Forex Markets ?
 What are Forex Market Timings ?
“ Lets do a quick revisal & end today’s session ”
FOREX TRADING
TUTORIAL – 2021
Session - 2
BY : TEAM MASTER MANAGE
 Currency Exchange Rates

 What is Base Currency in Forex Trading?

The Base Currency (also called the Transaction Currency) is the First Currency mentioned in a currency pair quotation.

 What is Quote Currency or Counter Currency?

It is often used as a reference to measure the value of the first currency (base currency).
 Forex trading is viewed as the simultaneous buying of one currency and selling some other Currency.
 For example, when a buyer purchases EUR/USD, it basically means that he is buying EUR and selling USD at the same time.
The Exchange Rate basically indicates how much of the quote currency is needed to be sold to buy one unit of the base
currency.

 Reference to the above image as an example:

At time of buying the base currency (here EUR), reading EUR/USD = 1.18 means that in order to purchase 1 EUR, a you
must pay 1.18 US Dollar. In the same way, at time of selling base currency if we read EUR/USD = 1.18, It means that
you will get 1.18 USD if you sells 1 EUR.
These Exchange rates are fluctuated based on which currency is stronger at the moment and creates an opportunity
for traders to gain profit.
 UNDERSTANDING BASIC TERMINOLOGIES IN FOREX

 What is a PIP ?
 A pip, short for "percentage in point" or "price interest point," represents a tiny
measure of the change in a Currency Pair. A pip is a standardized unit and is the
smallest amount by which a currency quote can change.
WHAT IS LOT SIZE IN FOREX ?
 LOT SIZE EXPLAINED

LOT PIP P&L

STANDARD LOT (1 LOT) 1 $10

$100000 10 $100

MINI LOT (0.10 LOT) 1 $1

$10000 10 $10

MICRO LOT (0.01 LOT) 1 $ 0.1

$1000 10 $1
WHAT IS SPREAD ?
 WHAT IS LEVERAGE IN FOREX ?

Leverage is the loan provided

by broker to the investor.
 WHAT IS SWAP IN FOREX ?

A foreign currency swap is an agreement

to exchange currency between two foreign
parties, in which they swap principal and
interest payments on a loan made in one
currency for a loan of equal value in
another currency.
 WHAT IS MARGIN ?

Since a trader is allowed to use more

capital than the amount he or she
deposited, the broker requires amount of
fund to cover any potential losses. This
amount is called margin. Also call it as the
minimum amount you should have in your
account to keep your positions open.
 goals
Investment

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Thank you

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