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FOREX OVERVIEWTRANSCRIPT
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The foreign exchange market (forex or FX for short) is one of the most exciting, fast-paced markets
around. Until recently, forex trading in the currency market had been the domain of large financial
institutions, corporations, central banks, hedge funds and extremely wealthy individuals. The
emergence of the internet has changed all of this, and now it is possible for average investors to buy
and sell currencies easily with the click of a mouse through online brokerage accounts.
Daily currency fluctuations are usually very small. Most currency pairs move less than one cent per
day, representing a less than 1% change in the value of the currency. This makes foreign exchange
one of the least volatile financial markets around. Therefore, many currency speculators rely on the
availability of enormous leverage to increase the value of potential movements. In the retail forex
market, leverage can be as much as 250:1. Higher leverage can be extremely risky, but because of
round-the-clock trading and deep liquidity, foreign exchange brokers have been able to make high
leverage an industry standard in order to make the movements meaningful for currency traders.
Extreme liquidity and the availability of high leverage have helped to spur the market’s rapid growth
and made it the ideal place for many traders. Positions can be opened and closed within minutes or
can be held for months. Currency prices are based on objective considerations of supply and demand
and cannot be manipulated easily because the size of the market does not allow even the largest
players, such as central banks, to move prices at will.
There are several avenues for retail customers to make investments. Individuals can use
investments instruments in financial markets by using long term goals or short term trading i.e.
shares, options, derivatives, swaps, commodity, real estate, gold, silver, bonds etc., some of these
instruments give an opportunity for people to make money. Indian financial market is still only 2+
decades old and requires lot of maturity.
Recently some of trading instruments are available in the market because of the online facility and
many folks are using the technology to make additional money by trading in futures or cash market
along with commodity. There are bound to be many changes going to happen in the coming years
because of the stake taken in BSE and NSE by foreign exchanges and substantial developments are
going to happen w.r.t technology and access to retail investors.
There are many new products will be launched in the financial market, which provides easy access
for retail investors to benefit from the same. One such trading activity is FOREX, which is now
accessible for many retail investors. Most of the folks are not aware of how to use this trading avenue
to make additional money and the beauty of this product is that you can trade 24hrs which provides
opportunity for folks who can do some bit of trading during later hours or after work or early in the
morning. As we all know that FOREX trading is the biggest market globally and there are so many
combinations individuals can hedge.
The project study is an attempt to delve into details of different strategies used in FOREX trading and
apply some of the commonly used strategies to profit from this new instruments which is rapidly
catching up in India.
OBJECTIVES
The project study intends to address the following objectives
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1. Study types of currencies traded and how they are traded
2. Study FOREX trading strategies and techniques
3. Apply commonly used strategies for FOREX Trading
4. Study FOREX Charts (US and UK Currencies are used for the study)
5. Create a FOREX Trading account and apply Trading Strategies
6. Conduct a survey to get retail investor perspective on FOREX