Foreign Exchange Market simplified as Forex Market. (Also known as FX, Spot, Currency Market).
The Market in which participants are able to Buy, Sell, Exchange and Speculate on currencies are said to be the Forex Market.
Money is what Trades, it involves in Buying and Selling of one currency against some other currency.
For eg : if you think USD will go up, you can buy USD by selling Indian Rupee.
Example : USDINR, EURGBP, AUDJPY, etc. It represents value of one currency against value of other currency. For Instance,
USD / INR = Rs.65 / 1 US dollar equals to 65 Indian Rupees.
EURUSD , GBPUSD, AUDUSD, NZDUSD, USDJPY, USDCAD.
EUR/GBP, EUR/JPY, CAD/CHF, EUR/CAD.
GBP/JPY , EUR/JPY , EUR/CHF.
GBP/JPY = GBP/USD & USD/ JPY
EUR/JPY = EUR / USD & USD /JPY
EUR /CHF = EUR /USD & USD / CHF
The Forex Market is made up of Banks, Commercial Companies, Central Banks, Investment Management Firms, Hedge Funds, and Retail Forex Brokers and Investors.
The currency market is considered to be the largest financial market in the world, processing trillions of dollars worth of transactions each day.
As on 2013 statistics FX Markets move to 5.3 Trillion
What is Pip?
Pip stands for "percentage in point" and is the smallest increment of trade in FX. In the FX market, prices are quoted to the fourth decimal point.
Example : EURUSD market price 1.16500
What is Spread?
The difference between the bid and ask price of the currency pair.
Example : EURUSD Bid price: 1.16500 Ask price: 1.16521
Here spread of EURUSD 2.1
What is Volume (Lot)?
A lot represents the standardized quantity of a financial instrument as set out by an exchange or similar regulatory body.
In Forex lot represents by Standard lot (1.0),
Mini lot (0.10),Micro lot (0.01)
What is Leverage (Exposure)?
The use of various financial instruments or borrowed capital, such as margin, to increase the potential return of an investment.
Example: 1:100, 1:200, 1:500
|Value of Pip||1.0||10||1.0||10|
|Margin(with leverage 1:200)||50||500||58.25||582.5|
|Margin(with leverage 1:500)||20||200||23.3||233|
|SYDNEY SESSION||03:30 AM TO 11:30 AM|
|TOKYO SESSION||04:30 AM TO 12:30 PM|
|LONDON SESSION||11:30 AM TO 07:30 PM|
|NEWYORK SESSION||05:30 PM TO 01:30 AM|
It is a method where traders look at the charts to analyze the market movement based on historical charts. Candle sticks and candle stick patterns are the most important component of technical analysis.
In simple words, Fundamental Analysis is the study of economical indicators of any country. For e-g.: GDP, Inflation, Employment rate, Trade balance, Political stability, Supply and Demand etc.
Fundamental analysis will generally have medium to long term targets andthis is mostly used by investors rather than traders. Hence the analysis by itself can be time consuming.
FED [ Federal Fund Rate] - AMERICA - 2.000%
RBA [ Australian Central Bank ] - AUSTRALIA - 1.500%
BOE [ Bank of England ] - GREAT BRITAIN - 0.500%
BOC [ Bank of Canada ] - CANADA - 1.500%
ECB [ European Central Bank ] - EUROPE - 0.000%
BOJ [ Bank of Japan ] - JAPAN - -0.100%
RBNZ [ Bank of New Zealand] - NEW ZEALAND- 1.750%
US DOLLAR INDEX (USDX) IT INCLUDE STOCKS LIKE
DOW JONES, NASDAQ, RUSSELL 2000, S & P 500, NIMNUS 2001
IT AFFECTS USD , EUR , JPY, GBP, CAD, CHF.
OIL MOVES AFFECT USD/CAD
Canada one of the top oil producers in the world.
Export 3 Million Barrels of oil and Petroleum products per day to UNITED STATES.
so OIL goes up USD/CAD goes DOWN
OIL goes down USD /CAD goes UP.
NFP [Non -Farm Payroll or Non Farm Employment Change ]
GDP [ Gross Domestic Product ]
CPI [ Consumer Price Index ]
EUROPEAN UNION [EU].
ECB [ European Central Bank ]
GDP [ Gross Domestic Price ]
German IFO Business Climate Survey.
CPI [ Consumer Price Index ]