2012 April Baomoney Singapore Seminar

FOREX MARKETThe Fastest growing investment arena and YOU

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• Eric Gao

• GM of Baomoney P/L

• Financial market analyst

• Investment analyst

•Master of Applied Finance

•Diploma of technical analysis

• 8 years FX investment experience

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Analysing FX, Stock, commodity market on daily basis

Provide clients with market analysis and investment education

Investment and projects valuation

Investment advice

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CONTENT

• 1. FX market facts

• 2. Why FX market?

• 3. FX market and your opportunities

Upcoming FX technical analysis workshop

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PART 1FX

MARKET FACT

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4.7 Trillion USD

Daily FX market turnover:

3,615

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4.7 Trillion USD

Daily FX market turnover

5.513

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0

1,250

2,500

3,750

5,000

1988 1998 2008 2012

FX Market daily turnover

2008 - 2012Daily turnover increases

+47%

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Global stock market capitalisation

-13%

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90 - 94% daily transaction are for investment and speculation

Institutional transactions counts for 90% of dailytrading

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The man broke Bank of England ...

George Soros

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Ranking Name Market share

Deutsch Bank 15.64%

Barclays 10.75%

UBS AG 10.69%

Citi 8.88%

JPMorgan 6.43%

HSBC 6.26%

RBS 6.2%

Credit Suisse 4.8%

Goldman Sachs 4.13%

Morgan Stanley 3.64%

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PART 2 WHY FX MARKET?

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WHY DO WE NEED FX MARKET?

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2

3

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Date exchange rate Receivable value

3 Jan 2012 1.2920 129,200.00

2 Feb 2012 1.2480 124,800.00

-4,400.00

Singapore exporter with 100,000SGD receivables

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Date Price ValueExchange

rate Value AUD

28 Nov 2008 262 USD

131,000 USD 0.63 207,936

3 June 2009

445 USD 222,500 USD

0.8235 270,188

Expected profit in USD: 91,500

Actual profit in AUD: 62,252

AU investor in 500 Google share

loss in profit: 36,560 AUD

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March 2009 - July 2011AUD appreciates 65%

Investor buys and holds

trader buys and sells

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WHY DO WE PREFER FX MARKET OVER THE OTHER

MARKET?

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ADVANTAGES OF FX MARKET

•Highly liquid market

•Highly flexible market

•Highly transparent market

•Highly profitable market

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Gap on illiquid market

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FX market barely has gaps.

Gaps do happen on Monday morning, and with market surprises.

Monday gap

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ADVANTAGES OF FX MARKET•Highly flexible market:

•Range of products: FX forward, FX options, FX swaps, Margin FX

•flexible investment timeframe

•trading opportunities 24/7

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Asian session: 4:00 - 17:00

Currencies to watch: NZD, AUD, JPY, SGD, HKD, CNY

European session: 14:00 - 0:00

Currencies to watch: EUR, GBP, CHF, XAU

American session: 21:00 - 5:00

Currencies to watch: CAD, OIL, GAS

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FX centres globally:UK - 40%US - 25%

Switzerland - 9%Japan - 7.8%

Singapore - 6.7%

Best FX trading session: Europe + US

Singapore time: 14:00pm - 0:00am

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ADVANTAGES OF FX MARKET

•Highly transparent market

•The FX market is theoretically perfect Efficient Market according to economists

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ADVANTAGES OF FX MARKET

•Highly profitable market

2009 - 2011:

0

8

15

23

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2009 2010 2011

10 Years bondDow Jones IndexAUD/USD

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Part 3FX market and

your opportunities

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ARE YOU READY FOR

IT?

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Investment and trading requires: Higher probability

Knowledgeable actions

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FX CHECKLIST

1. Capital to start with

Capital for risk taking

Length of using

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2. choose the currencies to trade

Currency characteristics

Active timeframe

Economic features

Daily movement

One or all?

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3. choose your broker wisely

Platforms to offer

Spread type

Products offer

Services provided

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4. analyse the market

Fundamental analysis

Technical analysis

Behavioural analysis

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Fundamental analysis: analysing the economics conditions to find the undervalued currency.

What to buy and sell

2010 FX market fact:

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Fundamental analysis: analysing the economics conditions to find the undervalued currency.

What to buy and sell

2010 FX market fact:

6 Interest rate hikes to 4.5%

and more to rise

Improving labour market

Economic growth

0.25% interest rate

QEII and QE3

Worsen labour market

Unstable economy

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Up 10%

Oct 2010AUD/USD 0.99

April 2011AUD/USD 1.08

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2011 FX market fact:

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2011 FX market fact:

Since May 2011, RBA kept i/r onhold

Worsening labour market

Economic slowdown after natural

disasters

QE3 unlikely

Improving labour market

Economy stabilising

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Down 4%

Oct 2011AUD/USD 1.07

April 2012AUD/USD 1.03

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April 2012 FX market

QE3 unlikely

Improving labour market

Economy stabilising

Debt crisis spreading

Accommodating monetary policies

Worsening economies Accommodating

monetary policies

Worsening economies

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April 2012 FX market

Inflation target at 1%

Cutting interest rate and more to cut

Unstable labour market

Worsening economies

Worsening economies

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Technical analysis: analysing the currency movement by using charting and statistical indicators.

When to buy and sell

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Down theory example

LL

LL

LL

LH

LHLH

EUR/USD 1H chart

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Technical analysis example

Bullish divergence

ADX losesmomentum

RSI oversold

Downtrend, but correction may happens soon

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Behavioural analysis: learn the repeating human behaviour in financial markets.

How the others buy and sell

Herd effect

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April 2003

July 2008

5 years from 0.6 to 0.98

4 months to give all back

AUD/USD weekly chart

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Your FX checklist

1. Prepare risk-taking capital

2. Decide the currency (currencies) to trade

3. Find a broker suits your needs

4. Analyse the market fundamentally, technically and

behaviourally 47

Trading tips

Know the direction, turn when you are wrong

Know the direction, turn when you are wrong

Buy Insurance for protection

Know when to trade more and when to break

Taking time to master

Taking time to master

Place stop loss for protection

Know when to accelerate and stop

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Upcoming Singapore FX technical analysis workshop

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Advantages of technical analysis

where the trend starts and ends

The healthiness of the trend

The best possible take profit rates

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What will be cover?

Dow theory and trend analysis

Trend following indicators and trend analysis

Trend momentum indicators and trend analysis

Range trading and how to trade break-out

Common mistakes with technical analysis

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Who should be attending?

New entrants to the FX market

FX Investors and traders willing to improve technical analysis skills

Investors and traders willing to learn technical analysis

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20 clients required

One lucky client......

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Risk Disclaimer

General advice only, doesn't take account of your financial

situation.

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Wish you all trading successfully

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