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Copy of FX seminar powerpoint

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on 17 February 2013

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Transcript of Copy of FX seminar powerpoint

What Is a Trading System?

A trading system is simply a group of specific rules, or parameters, that determine entry and exit points for your trade. These points, known as signals, are often marked on a chart in real time and will prompt you to pull the trigger.

Here are some of the most common tools used to construct a trading system-
1. Chart Patterns
1. Moving Averages
1. Stochastic Oscillators
1. Relative Strength
1. Bollinger Bands Paste chart Some of tools used for Analysing the Market :

Candle Sticks


Trading Indicators such as

Moving Average
Stochastic Oscillators Technical Analysis Average Daily Movement
The EUR/USD and some other the other 6majors moves an average of 100pips a day The PIP or (PIPS)

The JPY is different, a the pip is denoted by 2 places after the decimal

If USD/JPY = 158.57

158.57 + 3pips = 158.60 A Typical currency quote In Forex, currencies are quoted and traded in pairs A typical trade screen Information- Important information reaches everyone at the same point in time Macro Economic data – Since it can only be influenced by major economic data, You have fewer data to monitor. it is easier to monitor than the stock market where you have

Who the shareholders are
Profit and losses over a couple of years,
Insider information e.t.c ; who the CEO is , is he resigning soon etc

In Forex Market, there are just 5-6 pieces of data a month which you might need to monitor. Advantages of the Foreign exchange market

Liquidity- You will never get stuck with a currency , there is always going to be buyers and sellers

Fair Trade – There is no external control by financial entities.
The Central bnks only interfere once in decade and they can only affect a maximum of 2% of the fluctuation which can only lasts for a few hours

In the case of shares an investment firm can inject tens of millions of dollars into the market to shift the price of the stock Advantages of the Foreign exchange market

The Forex Market has two (2) Main advantages: Daily Movement -the Forex spot market has neither a physical location nor a central meeting place. Transactions are facilitated through large computer networks linked for the exchange of price data and other usefull info. There are four major FX data centers – New York, London, Tokyo & Frankfurt. The Foreign Exchange market, sometime referred to as the "FOREX" , "Retail forex“, or Spot FX .

Simply put, trading is buying and selling ‘things’ to try and make a profit. The ‘things’ may be shoes , computer , works of art or used cars. But in this case it is the buying and selling of currencies

The FOREX market is a global interbank market of currency exchange- where currencies are bought and sold.

It is the largest financial market in the world, with a volume of over $4 trillion a day.

It operates 24hrs a day, 5 days a week.

It is the Safest investment channel. What is Forex The fact is, FOREX trading is a learnable skill and when you apply yourself through a good success model , then you are more likely to succeed in the markets and generate a long term and sustainable income for yourself. Introduction This is an introductory presentation and in which we will learn about trading in the Foreign Exchange market as a consistent and long term source of income. No fanciful degree or qualifications,
Nor a fancy CV,
No MLM- or Downline
No Bargaining or Haggling
No Cold Calling
No Recruiting
Complete work from home
No boss ,
No commuting to or from work 1. Poor Skills
1. Lack of adequate capital
1. Setting unrealistic targets and goals
1. Lack of Patience
1. Lack of discipline
1. High risk aversion. What is forex======= A professional is one who does something well even when he is not in
The mood to do it. Why Do FX traders fail 2 - History Repeats itself Technical Analysis 1 - Prices move in Trends Technical analysis is based on 2 major Premises:

If you think the currency price will drop (bearish) , you sell (go short)
Technical Analysis Market Analysis

Opening Signal - Buy or Sell Signal

Trade management

Close Signal-Take Profit or stop loss Basic Trading Systems What Is a Trading System?
A trading system is simply a group of specific rules, or parameters, that determine entry and exit points for your trade. These points, known as signals, are often marked on a chart in real time and will prompt you to pull the trigger. Money management

Take Profit

Stop loss In the same way , it works the other way round.

If in the example above you lose 50 pips, that is -$500
from your original $1,000. Leaving a balance of $500..

The great thing is that you will never lose mre than you put into it. 1 pip 10,000 = $1

1 pip 100,000 = $10

1 pip 1,000,000 = $100 In Forex you can control $100,000 with $1,000 deposit. (100 : 1 leverage )

For instance :

If you have $1,000 in your account and you open a

1Lot ($100,000 position) and make a gain of 50 PIPS

(50 x $10 = $500 )

You have made $500 i.e 50% profit + the original $1,000 =
$1,500 The definition of “leverage” is having the ability to control a large amount of money using none or very little of your own money and borrowing the rest.

The broker enables you to carry out transactions which are of a larger scope than the money in your account
Leverage Example:

If EUR/USD = 1.522(4)

1.5224 + 1pip = 1.522(5)

1.5225 - 5pips = 1.522(0) The PIP or (PIPS)

In most currencies, the PIPS are denoted by 4 places after the decimal point The PIP or (PIPS)

In Forex the unit of measurment is known as PIP. The exchange rate rises or falls by PIPS For example if you want to convert EUR to USD in the bank: The Spread – it is the difference between the buying rate and the selling rate and that’s the commission you pay as currency traders. Currencies Traded?

There are as many currencies as there are countries, but not all are traded for speculative purposes - There are 6 majors, a couple of crosses and exotics
Forex currency symbols are always three letters where the first two letters
identifies the name of the country, while the third identifies the name of the
country’s currency.

USD - United States Dollar
GBP - Great Britain Pound
JPY - Japan Yen- Yen Open up trading platform

Choose which currency to trade

Click buy (or sell ) button

Make profit or loss(??)

Close the trade

Go home. How to buy and Sell A good Trading System A margin Deposit : You can Start with as little as $100,

There are several account sizes depending on your starting capital:

Micro , Mini and Standard Accounts A computer , Laptop / Desktop /IPAD / Smart phone

A reliable Internet connection What do you need to trade Trade buy and sell shares
There are over 40,000 stocks to choose from
There are stocks that are difficult to get rid of
Trading is possible only during market hours.
Commission trading
Needs huge capital to start Trade buy and Sell Currencies.
The Focus is on 6 Major currencies
Liquidity- You can buy and sell at anytime
Trading is 24hrs/5days
No commission- Fixed Spread
Can start with as little as $200 The buying of and selling of currencies is usually done by banks and large institutions for purpose of commerce & Industry, tourism, oil import and export .
But all these make up less than 5% of the Foreign exchange market

The remaining 95 % is done by speculators or for speculative purposes.
Speculators are people who buy and sell in order to profit from the daily fluctuations in currency rates..

Only about 5% of the transactions are for the real purpose of commerce such as Industries, Tourism etc . The world Economy today
Long term and sustainable income
Retirement plans The case for alternative source of income Be your own boss Completely flexible ; Full or Part time. Unlimited Income potentials Trade Anywhere , Any time Profits are Tax free Why FX “ Mr Hope is a "self-taught trader who specializes in the Foreign Exchange Market". “Revealed: The big-spending businessman who ran
up £203,948 bar bill was 23-year-old City whizkid”
(yahoo publication March 2012) alexaceofspades Name : Stanley Arubi Certificate in Financial Modeling - London School of Business and Finance Certificate in Financial Markets & Trading Analysis –London School of Business and Finance. Actively Trading the Foreign Exchange Market Since 2006 About the Presenter Risk disclosure Introduction Legal disclaimer/ Risk disclosure The contents of this presentation are for informational purposes only.
No part of this publication is a solicitation or an offer to buy or sell any financial market.

Examples are provided for illustration purposes only and should not be construed as investment advice or strategy.

All trade examples are hypothetical.
No representation is made that any account or trader will or is likely to achieve profits or losses similar to those discussed in this presentation.

The information in this presentation is not intended for distribution to, or use by any person or entity in any jurisdiction or country where such distribution or use would be contrary to the law or regulation or which would subject us to any registration requirement within such jurisdiction or country. Welcome to the world of Currency Trading Technical Analysis – It is a method of predicting price movements and future market trends; by studying what has occurred in the past with regard to market movements- ,It focuses on what has actually happened in the market rather than what should happen. Fundamental Analysis Approach - It is thr forecasting of future price movements based on political ,environmental and other relevant factors. Focuses primarily on the causes of market movement . Unemployment Report, Non Farm Payroll(NFP)

. There are two main approach to Forex Market Analysis Market research and analysis Sideways Up Down In the same way , In FOREX, it is relatively simple; Price can only move in 3 directions A trader who believes the price or value of his product will decrease ,
hurries to sell his goods and realize the money A trader who believes the price or value of his product will increase ,
will purchase additional products and wait for the price to rise before selling How to make profit

For instance :

If i trade and make a gain of 100 pips

100pips x $10 = $1,000 Trade size In forex trades are made in LOTS.

We have Micro Lots, Mini Lots , Standard Lots

They are measured in multiples of 1,000

Micro Lot = $1,000 1Pip = $0.1

Mini Lot = $10,000 1PIP = $1.

1 Lot = $100,000. 1 Pip = $10

10Lots = $1,000,000 1 Pip = $100 Trade Size. BE your own Boss
Complete Tax free
Whenever , Wherever Why FX It is a known fact that majority of the World’s Millionaires and Billionaires today made most of their money from the financial Markets . By trading financial Instruments ,Stocks FOREX commodities and indices, they were able to amass wealth for themselves. Warren Buffet Substantial wealth is being made from the FOREX Market today by ordinary individuals like you and I Why Forex What is currency Trading
What you need to trade
How to open and close a trade
How to Profit from the Foreign Exchange Market
Introduction to Basic Trading Strategies The Structure of this Presentation Contra Currency Base Currency Base currency – online
It is not an instant win or lottery ticket. This is not a "Get Rich Quick" scheme It is not a "Ponzi" scheme Until the late 1990’s, only
the “big guys” could trade
in this market.
However, because of
the rise of the Internet,
online Forex trading firms
are now able to offer
trading accounts to
'retail' traders like us. Speculators Trends- Peaks and Troughs
Break outs/ Fakeouts
Indicators Peaks and Trough Trends
Full transcript