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Introduction to Forex Trading

Introduction to Forex Trading. Disclaimer

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Introduction to Forex Trading

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  1. Introduction to Forex Trading Disclaimer Any Opinions, News, Research, Analyses, Prices, or Other Information Contained on This Website Is Provided As General Market Commentary, and Does Not Constitute Investment Advice. FXCM Holdings LLC Will Not Accept Liability for Any Loss or Damage, Including Without Limitation To, Any Loss of Profit, Which May Arise Directly or Indirectly From Use of or Reliance on Such Information. The above should make you aware that there is a risk involved Hands-on Forex trading

  2. Introduction to FX trading • We will cover: • Forex Market Overview, • Trading strategies • Trading Tools • Money Management • Hands on trading using demo accounts • Any other incidentals Hands-on Forex trading

  3. Overview • We will find out what the market is • The participants and factors influencing the market • How currencies move and what influences such movements • What tools are needed • Signup for a demo account and put all that we have learnt to use • We are here to determine if we can make money on the Forex market Hands-on Forex trading

  4. Forex Market • The foreign exchange market is unique because of. • Its trading volumes, • The extreme liquidity of the market, • Its geographical dispersion, • Its long trading hours: 24 hours a day except on weekends (from 22:00 UTC on Sunday until 22:00 UTC Friday), • The variety of factors that affect exchange rates. • The low margins of profit compared with other markets of fixed income (but profits can be high due to very large trading volumes). • The use of leverage. Hands-on Forex trading

  5. Forex Market Overview • Forex Overview • What is FOREX/FX • FX/Forex is the exchange of one currency for another. The purpose of FX market is to facilitate trade and investment. The need for a foreign exchange market arises because of the presence of multifarious international currencies such as US Dollar, Pound Sterling, etc., and the need for trading in such currencies. • Receiving money from abroad in Ghana. You do not get the physical money but get a credit in you account and then you make a withdrawal from you account. • Let us do this exercise • How will you send money to your cousin in the village ( assuming they have a bank account) ? Hands-on Forex trading

  6. Market Symbols • Currency Pair • In forex one buys or sells (exchanges) one currency for another. The currencies involved in any transaction form the currency pair. Eg EUR/USD, GBP/USD , USD/CHF • Pip the smallest denomination of any currency in the FX market. This is $0.0001 • Long/Short – You are long if you are expecting a currency to go up. If you buy GBP/USD you are long GBP and automatically short USD. • Range/Ranging – difference between max and minimum values for a period. Ranging means currency rate is fluctuating between a max and a min values. • Trending – over a period the rates is increasing or decreasing steadily. • Leverage – Currencies are sold/bought in 100K lots. This is a lot of money so leverage is used. A leverage of 200:1 means you could buy 200 times the money you deposit. Sounds good but has its setback. • PnL -- Profit and Loss Hands-on Forex trading

  7. Currency Pairs & Rates • Currency Pairs • Since FX is the exchange of one currency for another, every trade involves 2 currencies. These 2 make the currency pair. The first currency in any such relationship is the base (or accounting) currency and the second the quote currency. Each currency are assigned a symbol; here are the most common: US dollar – USD Japanese Yen – JPY Swiss franc – CHF Sterling – GBP Euro – EUR Canadian Dollar -- CAD and of course Ghana Cedi - GHC • An exchange involving US Dollars and EURO would be USD/EUR or EUR/USD which is how it is commonly quoted in FX. . • Exercise : Could you guess any combination from the list ? Eg GBP/USD CAD/GBP • Currency Rates • These are expressed how many of the second currency one would get with one of the first currency e.g. GBP/USD=1.46. This means One GBP gives you 1.46 USD or 1 GBP= 1.46 USD • Exercise: Today/s rates on the web. • FXCM Bloomberg or Bank of Ghana site. Hands-on Forex trading

  8. Summary • Forex overview, what it is , the players, Terms and Jargons, Currency pairs and rates • Define ways to apply training • Request feedback of training session Hands-on Forex trading

  9. Where to Get More Information • Online courses • Babypips • List books, articles, electronic sources • Consulting services, other sources Hands-on Forex trading

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