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Foreign Exchange Market
First presented In “special topics in finance“ course in economic and management faculty of Sharif universityOctober 22, 2011
Hossein Abdoh TabriziMaysam Radpour & Pedram Jahangiry
What is FOREX?
Forex – The Foreign exchange:
Market exists wherever one currency is traded for another. It is the largest and most liquid financial market in the world, and includes trading between large banks, central banks, currency speculators, multinational corporations, governments, and other financial markets and institutions.
Structure of Foreign Exchange
Core of the Foreign Exchange is the institutional Interbank Market
Retail Forex brokers bridge the interbank and retail Forex markets
Interbank Market
Retail
Forex MarketRetail Forex Brokers
BROKERS
Structure of Foreign Exchange
Central Exchanges:
Physical location Ex: New York Stock
Exchange, Chicago Board of Trade, Chicago Mercantile Exchange
Regulated by home governments
Ex: SEC in the United States
All transactions processed through the exchange
Foreign Currency Market:
Over-the-Counter market
No physical location Market participants
connected through worldwide network
No overarching regulatory body
Transactions are made through access to the OTC market
FX Features Largest Market in the world The average trade per day is more then 3-4 trillion $ No commission 24-hour market Leverage 1:50, 1:100, 1:200 Use all the same market tools (Limits, Stops and etc
) Financial Times foresees about 200% grow in next 3
years, because of arrival of investment and pension funds
Make money in both rising and falling markets Leverage 1:50, 1:100, 1:200
$ 3.5Trillones
$ 500Billones
$ 305Billones
$ 38Billones
When Do Currencies Trade?
Tokyo
LondonNew York
Sydney
Most traded currencies by
value
Experienced Dealer Say
Not easy to learn Most lose a lot of $$ at first before
learning how it works Hard to find big Long-Term trends for
the conservative & passive trader Deals with Behavioral Finance
Technical analysis: based on indicators such as moving averages, volume oversold and undersold conditions etc
Fundamental analysis: based on news and economic events,speeches by Key personalities such as fed chairman,ECB chairman etc.
Stochastic !!
Technical / Fundamental Analysis and stochastic
Questions?