Forex Market Basic
Introduction to Forex Market
By: Alson Chew
By: Alson Chew
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Available. Courses From other creators also Available.
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INTRODUCTION TO FOREX MARKET
Introduction to the Forex Market
✓ Forex or Currencies market is the largest market in the world and is traded 5 days a week, 24/7.
✓ When we do a forex transaction, we are in the process of exchanging one currency for another
based on the prevailing forex exchange rate of the currency pair.
✓ Therefore, a forex transaction are always traded in pairs. When we change for foreign currencies
(holiday) with the money changer, we are effectively executing a foreign exchange spot
transaction.
✓ Common Forex Terms
1) EUR as Euro
2) GBP as British Pound
3) AUD as Australian Dollar
4) JPY as Japanese Yen
5) CHF as Swiss Franc
6) CAD as Canadian Dollar
7)
8)
NZD as New Zealand Dollar
USD as US Dollar
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INTRODUCTION TO FOREX MARKET
✓ Most Traded and liquid Forex Pair
1) EUR/USD spot which is same as EUR/USD Future
2) GBP/USD spot which is same as GBP/USD Future
3) AUD/USD spot which is same as AUD/USD Future
4) USD/JPY spot which is same as 1 over JPY/USD Future
5) CHF/USD spot which is same as CHF/USD Future
6) CAD/USD spot which is same as CAD/USD Future
7) NZD/USD spot which is same as NZD/USD Future
✓ Other Cross Forex Pair (Spot)
1.) EUR/GBP
2.) EUR/JPY
3.) EUR/AUD
4.) GBP/JPY
5.) GBP/AUD
6.) AUD/NZD
7.) AUD/JPY
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INTRODUCTION TO FOREX MARKET
Non-Yen Forex Quotation
✓ The base currency is always quoted with a value of “1”
✓ In this example it means 1 EUR is equivalent to 1.15051 USD.
EUR/USD = 1.15051 Fractional Pip
Known as the Known as the Pip at 4th Decimal
Base Currency Quote Currency
Forex Quotation
✓ The base currency is always quoted with a value of “1”
✓ In this example it means 1 USD is equivalent to 111.111 JPY.
USD/JPY = 111.111 Fractional Pip
Known as the Known as the Pip at 2nd Decimal
Base Currency Quote Currency
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INTRODUCTION TO FOREX MARKET
Non-Yen Forex Quotation
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✓ The base currency is always quoted with a value of “1”.
✓ 1 pip represents the 4th decimal place of the non-yen forex quotation.
✓ For example if USD/CHF goes from $0.9945 to $0.9933. We say that it has moved 12 pips ($0.0012).
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INTRODUCTION TO FOREX MARKET
Yen Forex Quotation
✓ The base currency is always quoted with a value of “1”.
✓ 1 pip represents the 2nd decimal place of the yen forex quotation.
✓ For example if USD/JPY goes from $111.11 to $110.77. We say that it has moved 34 pips ($0.34).
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INTRODUCTION TO FOREX MARKET
Forex Time Zones
✓ SG Afternoon session is when the European market opens and as London is the largest FX trading
hub, it is the most active session of the day.
✓ Key forex trading hours is between 2pm SG to 2am SG.
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INTRODUCTION TO FOREX MARKET
Forex Contract Size
✓ In forex, the size naming convention is as follows
1 Standard lot size = 100,000 of base currency
1 Mini lot size = 10,000 of base currency
1 Micro lot size = 1,000 of base currency
1 Nano lot size = 100 of base currency
Do note however that some brokers do allow for odd lot size like 89,500. We will cover Spot FX Risk
Management at the later chapter.
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INTRODUCTION TO FOREX MARKET
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Forex Leverage
✓ Leverage given to traders vary from broker to broker. Most FX brokers however gives very high leverage
on forex trades.
✓ One can open a forex trading account with a minimum of $2,000 USD.
✓ Do check with the relevant FX brokers for the margin given for the FX pair which you wish to trade.
Example for interactive brokers forex margin is below. The margin required for the trade will usually be
shown in the confirmation window before trade execution.
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Forex Market Basic
Introduction to Forex Market
By: Alson Chew
By: Alson Chew
downloadyourcourse@gmail.com
All Adam Khoo Updated Courses, Communities and CSM
Available. Courses From other creators also Available.
© 2021 Piranha Pte Ltd. All rights reserved.
Copyright © 2020 Adam Khoo Learning Technologies Group Pte Ltd. All Rights Reserved. 10
