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Forex

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Forex Powered By Docstoc
					By: Benjamin Hooker
   Forex is the foreign currency market
   Forex is over-the-counter
   Markets are open around the clock
   Forex is the most liquid financial market

    Daily Voulume in Billions


                                        Forex
                            $74         NYSE
                                  $18   Tokyo Stock Exchange
                                        London Stock Exchange
$4,000

                      $25         $7
           Major Banks

                               Electronic Brokering Services

Medium and Small Sized Banks                Retail Marker Makers,
                                            Hedge Funds and
                                            Commercial
                                            Companies



                                     Retail Traders
   EUR/USD
   USD/JPY
   GBP/USD
   USD/CHF
   USD/CAD
   AUD/USD
   Base currency – the first currency listed
   Quote currency – the second currency listed
   Pip – equal to 1/100 of a cent
   Bid – price at which a currency is bought
   Ask – price at which a currency is sold
   Spread – difference between Bid and Ask
   Trades are either long or short
   Going long is buying the base currency
   Going short is selling the base currency
   There are three types of market analysis
       Technical Analysis
       Fundamental Analysis
       Sentiment Analysis
   There are three chart types
     Line chart
     Bar chart
     Candlestick chart

   Candlestick charts show the most data
   They are also the most popular
   Leverage makes trading more profitable
   Major currency pairs offer 50:1 leverage
   Minor currency pairs offer 20:1 leverage
   This allows traders to buy more lots
       Ex. To buy 100,000 of JPY/USD only $200 is needed

				
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posted:1/14/2011
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