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10 Things You Wanted To Know About The Currency Market But  Were Afraid To Ask    www.bkforexadvisors.com
*Past performance is not indicative of futureresults.Trading foreign exchange on margin carries a high level of risk, and ...
What Makes FX DifferentFrom All Other Markets? 1. FX is Truly 24 Hours/Day 2. FX Spot is Decentralized 3. FX – Pay Spread ...
Trade The World1. FX Trades Continuously From       5PM ET Sunday – 5PM ET Friday2. Session Hours (in ET)     Asia: 5PM-3A...
FX Has No Central     Market  1. Every Dealer Makes Their Own Quotes  2. Markets Are OTC Not Exchange Based  3. There is N...
Pay Spread Not   Commission1. Spread = Buy at Offer Sell on Bid2. You Cannot Join Bid or Offer3. Spreads Are Quoted to 5th...
Leverage To The      Max1. Stocks = 2:1 or 4:12. Futures = 10:13. FX? 50:1 !!!!!!!!!4. 2% Move Against You Wipes You Out
FX Trading Platforms1. Direct Dealer2. Pass Through3. ECN
5 Things To Consider In Choosing FX Platform1. Spread2. Slippage3. Ease of Order Entry4. Charting5. Reporting
NEWS Sources
2 Types of News1. Economic Calendar - Scheduled2. Headline News – Unscheduled
Economic Calendar
Economic Calendar
Headline News
Headline News Alternatives
@Fxflow/Macro-fx Subscribing to/Following Other Peoples Lists Following a list is as simple as following any other Twitter...
5 Things That Move The   Currency Market1. Central Bank Decisions2. Equity Risk On/Off3. Political Uncertainty4. Trade/Cap...
What are double Bollinger Bands? 20 Period, 2 Standard Deviation 20 Period, 1 Standard Deviation       2 BB = Outer Lines ...
1. Using BB to determine trend or              range
Source: DealBook® 360
2. Using BB to pick tops and          bottoms
Source: DealBook® 360
FX Money Management
#7 - Does Seasonality Matter?     http://contently.com/blog/wp-content/uploads/2012/01/calendar_icon3.png                 ...
Seasonality in Stocks Source: GFT                        B
Seasonality in ForexSource: GFT                       B
Does Seasonality Matter?   Source: GFT                           B
Does Seasonality Matter?   Source: GFT                           B
Does Seasonality Matter?   Source: GFT                           B
Seasonality in March  Source: GFT                       B
Election Year Price PatternsSource:GFT                                    B
#8 - How Do Carry Trades Work?      http://babypips.cachefly.net/school/images/fresman/summary-carry-trade.png            ...
How Do Carry Trades Work?   Australian Dollar             /              Japanese Yen        4.25%                        ...
3 Conditions for Carry Trades- Low Volatility- Risk Appetite- Bias to Tighten Monetary Policy                             ...
AUD/USD          B
B
#9 - Why Do We Care AboutCentral Bank Intervention?                             B
Why Do We Care AboutCentral Bank Intervention?                             B
How Does Central Bank      Intervention Work?http://cdn.physorg.com/newman/gfx/news/hires/abusinessman.jpghttp://www.artre...
How Does Central Bank      Intervention Work?SELL                                                           Buyhttp://a1.t...
Foreign Exchange Reserveshttp://cache.gawkerassets.com/assets/images/17/2010/09/500x_pile-of-cash.jpg                     ...
More Yen in Circulation                                                               Yen                                 ...
2 Choices for the Central Bank       1) Sterilize the Intervention       - Sell Bonds Domestically > Soak Up the New Cash ...
2 Choices for the Central Bank   2) Leave Intervention Unsterilized   - No Additional Action to Change Monetary Base     C...
USD/JPY Chart                B
#10 - How Does China Peg        the Yuan? http://drpinna.com/wp-content/uploads/2010/07/yuan-USdollar.jpg                 ...
Will China Ever Float the         Yuan?   Source: KAL’s cartoon From The Economist print edition - Aug 9th 2007   - Illust...
Questions
*Past performance is not indicative of futureresults.Trading foreign exchange on margin carries a high level of risk, and ...
10 thingsfx
10 thingsfx
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  1. 1. 10 Things You Wanted To Know About The Currency Market But Were Afraid To Ask www.bkforexadvisors.com
  2. 2. *Past performance is not indicative of futureresults.Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degreeof leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefullyconsider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain aloss of some or all of your initial investment and therefore you should not invest money that you cannot afford tolose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independentfinancial advisor if you have any doubts.Kathy Lien and Boris Schlossberg are employed as Director of Currency Research for Global Forex Trading, a division ofGlobal Futures & Forex, Ltd. (GFT). However, BKForex Advisor, which is a company owned and operated by Kathy andBoris separately and independently from their employment with GFT. GFT does not control the content of theBKTraderFX.com web site, and opinions expressed by Boris and Kathy on the BKTraderFX.com web site are not necessarilythe opinions of GFT. FX 360® is either a registered trademark or a trademark of Global Futures & Forex, Ltd., in the UnitedStates and/or other countries.This information should not be relied on as a substitute for extensive independent research before making your investmentdecisions. BKForexAdvisor is merely providing this for your general information. The views of this author are notnecessarily those of Global Forex Trading, its owners, officers, agents or other employees. In addition, any projections orviews of the market provided may not prove to be accurate. Global Forex Trading will not be responsible for any lossesincurred on investments made as a result of any information contained in this presentation. Global Forex Trading andBKForexAdvisor do not render investment, legal, accounting, tax, or other professional advice. If investment, legal, tax, orother expert assistance is required, the services of a competent professional should be sought.
  3. 3. What Makes FX DifferentFrom All Other Markets? 1. FX is Truly 24 Hours/Day 2. FX Spot is Decentralized 3. FX – Pay Spread Not Commission 4. FX – Highly Levered
  4. 4. Trade The World1. FX Trades Continuously From 5PM ET Sunday – 5PM ET Friday2. Session Hours (in ET) Asia: 5PM-3AM Europe: 3AM-12Noon North America: 8AM-5PM3. Most Active Time to Trade (ET) 4AM-12PM
  5. 5. FX Has No Central Market 1. Every Dealer Makes Their Own Quotes 2. Markets Are OTC Not Exchange Based 3. There is No Global Best Bid/Best Ask 4. Most Traders Have Several Accounts
  6. 6. Pay Spread Not Commission1. Spread = Buy at Offer Sell on Bid2. You Cannot Join Bid or Offer3. Spreads Are Quoted to 5th Decimal Point4. Cost of Trade ~ 1-3bp of Notional Value
  7. 7. Leverage To The Max1. Stocks = 2:1 or 4:12. Futures = 10:13. FX? 50:1 !!!!!!!!!4. 2% Move Against You Wipes You Out
  8. 8. FX Trading Platforms1. Direct Dealer2. Pass Through3. ECN
  9. 9. 5 Things To Consider In Choosing FX Platform1. Spread2. Slippage3. Ease of Order Entry4. Charting5. Reporting
  10. 10. NEWS Sources
  11. 11. 2 Types of News1. Economic Calendar - Scheduled2. Headline News – Unscheduled
  12. 12. Economic Calendar
  13. 13. Economic Calendar
  14. 14. Headline News
  15. 15. Headline News Alternatives
  16. 16. @Fxflow/Macro-fx Subscribing to/Following Other Peoples Lists Following a list is as simple as following any other Twitter user. Simply click on the Lists tab when viewing their profile, and select which list youd like to subscribe to. From the list page, click Subscribe to follow the list. You can also consequently remove yourself from a list by blocking the creator of the list. Note: If the owner of a list that youre following includes a public user that youve blocked, you will still see the updates of the blocked user. This behavior is similar to visiting the profile page of a public user that youve blocked: youre still able to read their tweets.
  17. 17. 5 Things That Move The Currency Market1. Central Bank Decisions2. Equity Risk On/Off3. Political Uncertainty4. Trade/Capital Flows5. M&A Activity
  18. 18. What are double Bollinger Bands? 20 Period, 2 Standard Deviation 20 Period, 1 Standard Deviation 2 BB = Outer Lines 1 BB = Inner Lines
  19. 19. 1. Using BB to determine trend or range
  20. 20. Source: DealBook® 360
  21. 21. 2. Using BB to pick tops and bottoms
  22. 22. Source: DealBook® 360
  23. 23. FX Money Management
  24. 24. #7 - Does Seasonality Matter? http://contently.com/blog/wp-content/uploads/2012/01/calendar_icon3.png B
  25. 25. Seasonality in Stocks Source: GFT B
  26. 26. Seasonality in ForexSource: GFT B
  27. 27. Does Seasonality Matter? Source: GFT B
  28. 28. Does Seasonality Matter? Source: GFT B
  29. 29. Does Seasonality Matter? Source: GFT B
  30. 30. Seasonality in March Source: GFT B
  31. 31. Election Year Price PatternsSource:GFT B
  32. 32. #8 - How Do Carry Trades Work? http://babypips.cachefly.net/school/images/fresman/summary-carry-trade.png B
  33. 33. How Do Carry Trades Work? Australian Dollar / Japanese Yen 4.25% 0.10% http://swap.semanticweb.org/ B
  34. 34. 3 Conditions for Carry Trades- Low Volatility- Risk Appetite- Bias to Tighten Monetary Policy B
  35. 35. AUD/USD B
  36. 36. B
  37. 37. #9 - Why Do We Care AboutCentral Bank Intervention? B
  38. 38. Why Do We Care AboutCentral Bank Intervention? B
  39. 39. How Does Central Bank Intervention Work?http://cdn.physorg.com/newman/gfx/news/hires/abusinessman.jpghttp://www.artremis.com/article/pics/ubs_trading_floor08.jpg B
  40. 40. How Does Central Bank Intervention Work?SELL Buyhttp://a1.twimg.com/profile_images/264728980/jpy_usd.png B
  41. 41. Foreign Exchange Reserveshttp://cache.gawkerassets.com/assets/images/17/2010/09/500x_pile-of-cash.jpg B
  42. 42. More Yen in Circulation Yen = Money Supply (avail of Yen) = Inflation = Interest Rates & Competitivenesshttp://cache.gawkerassets.com/assets/images/17/2010/09/500x_pile-of-cash.jpg B
  43. 43. 2 Choices for the Central Bank 1) Sterilize the Intervention - Sell Bonds Domestically > Soak Up the New Cash Pros Investor Paying -Achieves psychological for shock of intervention Japanese - Mitigates prior effects BondsGovernment Cons - Rarely Lasts http://y.e-static.net/file-pic/handing-over-cash/handing-over-cash.jpg B
  44. 44. 2 Choices for the Central Bank 2) Leave Intervention Unsterilized - No Additional Action to Change Monetary Base Can Work if Problems are Domestic in Origin and Monetary in Nature Japanese Government B
  45. 45. USD/JPY Chart B
  46. 46. #10 - How Does China Peg the Yuan? http://drpinna.com/wp-content/uploads/2010/07/yuan-USdollar.jpg B
  47. 47. Will China Ever Float the Yuan? Source: KAL’s cartoon From The Economist print edition - Aug 9th 2007 - Illustration by Kevin Kallaugher B
  48. 48. Questions
  49. 49. *Past performance is not indicative of futureresults.Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degreeof leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefullyconsider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain aloss of some or all of your initial investment and therefore you should not invest money that you cannot afford tolose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independentfinancial advisor if you have any doubts.Kathy Lien and Boris Schlossberg are employed as Director of Currency Research for Global Forex Trading, a division ofGlobal Futures & Forex, Ltd. (GFT). However, BKForex Advisor, which is a company owned and operated by Kathy andBoris separately and independently from their employment with GFT. GFT does not control the content of theBKTraderFX.com web site, and opinions expressed by Boris and Kathy on the BKTraderFX.com web site are not necessarilythe opinions of GFT. FX 360® is either a registered trademark or a trademark of Global Futures & Forex, Ltd., in the UnitedStates and/or other countries.This information should not be relied on as a substitute for extensive independent research before making your investmentdecisions. BKForexAdvisor is merely providing this for your general information. The views of this author are notnecessarily those of Global Forex Trading, its owners, officers, agents or other employees. In addition, any projections orviews of the market provided may not prove to be accurate. Global Forex Trading will not be responsible for any lossesincurred on investments made as a result of any information contained in this presentation. Global Forex Trading andBKForexAdvisor do not render investment, legal, accounting, tax, or other professional advice. If investment, legal, tax, orother expert assistance is required, the services of a competent professional should be sought.
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