• Share
  • Email
  • Embed
  • Like
  • Save
  • Private Content
Foreign exchange market-final ppt(my)
 

Foreign exchange market-final ppt(my)

on

  • 17,163 views

...


The foreign exchange market or forex market as it is often called is the market in which currencies are traded.
Currency Trading is the world’s largest market consisting of almost trillion in daily volumes
The market continues to rapidly grow. Not only is the forex market the largest market in the world, but it is also the most liquid, differentiating it from the other markets.
There is no central marketplace for the exchange of currency, but instead the trading is conducted over-the-counter.
This decentralization of the market allows traders to choose from a number of different dealers to make trades with and allows for comparison of prices. Typically, the larger a dealer is the better access they have to pricing at the largest banks in the world, and are able to pass that on to their clients.


The spot currency market is open twenty-four hours a day, five days a week, with currencies being traded around the world in all of the major financial centers.
All trades that take place in the foreign exchange market involve the buying of one currency and the selling of another currency simultaneously. This is because the value of one currency is determined by its comparison to another currency.
The first currency of a currency pair is called the “base currency,” while the second currency is called the counter currency. The currency pair shows how much of the counter currency is needed to purchase one unit of the base currency.
Currency pairs can be thought of as a single unit that can be bought or sold. When purchasing a currency pair, the base currency is being bought, while the counter currency is being sold.


Forex Capital Markets (FXCM) is an online currency trading firm that offers a free demo account to traders who are new and interested in the foreign exchange market.
It allows you to experience every step of currency trading including choosing currency pairs, deciding how much risk to take, tracking the time and dates of placed trades, deciding how long to stay in the trade, and when to exit the trade. It also allows the placing of stop and limit orders on trades.
Information about trading and specifically about how to use the online trading platform can be found on the FXCM webpage. In addition, FXCM offers FREE interactive online seminars that are extremely useful to both new and experienced currency traders.

Characteristics of foreign exchange
Its huge trading volume representing the largest asset class in the world leading to high liquidity;
Its geographical dispersion;
Its continuous operation: 24 hours a day except weekends, i.e., trading from 20:15 GMT on Sunday until 22:00 GMT Friday;
The variety of factors that affect exchange rates;
The low margins of relative profit compared with other markets of fixed income;
The use of leverage to enhance profit and loss margins and with respect to account size.


Statistics

Views

Total Views
17,163
Views on SlideShare
17,163
Embed Views
0

Actions

Likes
9
Downloads
1,189
Comments
4

0 Embeds 0

No embeds

Accessibility

Categories

Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel

14 of 4 previous next Post a comment

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
  • supporting ppt. Helps in understanding the concept of foreign exchange market............ :)
    Are you sure you want to
    Your message goes here
    Processing…
  • relevant material collected.
    Are you sure you want to
    Your message goes here
    Processing…
  • nic ppt
    Are you sure you want to
    Your message goes here
    Processing…
  • nice ppt it facilitates basic knowledge about forex mkts
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

    Foreign exchange market-final ppt(my) Foreign exchange market-final ppt(my) Presentation Transcript

    • Foreign Exchange Market KARISHMA SHARMA (2K12A27) ANUJ GARG (2K12A13) ANKIT SAPRA (2K12A55) GUNJA KUMARI (2K12A22) J PRATEEK KUNDU (2K12A26) SHRUTIKA DHAWAN (2K12A53)
    • WHAT IS FOREIGN EXCHANGEForeign exchange is the mechanism by whichthe currency of one country gets convertedinto the currency of another country.The conversion of currency is done by thebanks who deal in foreign exchange. Thesebanks maintain stocks of one currencies in theform of balances with banks
    • Cntd …. It also refers to the stock of foreign currenciesand other foreign assets. The foreign exchangemanagement ACT 1999 defines “Foreignexchange means foreign currency andincludes… (a) Deposits credits and balances payable in anyforeign currency. (b) Draft traveler’s cheques, letter or credit or billsof exchange expressed or drawn in Indiancurrency but payable in any foreign currency. (c) Drafts travelers cheques, letter of credit or billsof exchange drawn by banks, institution orpersons outside India, but payable in Indiancurrency
    • Nature of foreign exchangeVolatile, affected by hedger, arbitrager, speculator. Affected by demand and supply. Affected by rate of interest. Affected by balance of payment surplus and deficit. Affected inflation rate. Spot and forward rates are different. Affected by the economic stability of the country. Affected by the fiscal policy of the government. Affected by the political condition of the country.It can be quoted directly or indirectly
    • Operation of foreign exchange market: Foreign exchange market operates either as:- Spot Market: (Current Market) Spot market for foreign exchange is that market which handles only spot transaction or current transactions. Principle characteristics:-  Spot Market is of daily nature. It does not trade in future deliveries.  Spot rate of exchange is that rate which happens to prevail at the time when transactions are incurred.
    • Forward Market:Forward Market for foreign exchange is that market which handlessuch transaction of foreign exchange as are meant for futuredelivery.Principles Characteristics:- It only caters to forward transaction. It determines forward exchange rate at which forward transactionare to be honored.
    • Exchange Rate►Fixed Exchange Rate SystemFixed rates provide greater certainty forexporters and importers.►Flexible Exchange Rate SystemFlexible exchange rate or floating exchangerates change freely and are determined bytrading in the forex market.
    • History of Foreign exchangeForeign exchange history can be viewed as aseries of solutions that allowed countries toissue their own currency and to conduct theirown monetary policy while also allowinginternational trade to be conducted byproviding a means of exchanging onecurrency for another according to theexchange rate between them, which waseither agreed-upon or set by the market.
    • Exchange rate fluctuationsA reliable forecast or future spot rate is calledstudy of empirical patterns of exchange ratefluctuation. It provides essential informationfor an exchange rate exposure.
    • The Foreign Exchange Market for Beginners ►The foreign exchange market or forex market as it is often called is the market in which currencies are traded. ►Currency Trading is the world’s largest market consisting of almost trillion in daily volumes and as investors learn more and become more interested, market continues to rapidly grow. ►All trades that take place in the foreign exchange market involve the buying of one currency and the selling of another currency simultaneously. This is because the value of one currency is determined by its comparison to another currency. ►The first currency of a currency pair is called the “base currency,” while the second currency is called the counter currency.
    • Contd….►Foreign exchange Capital Markets (FXCM) isan online currency trading firm that offers afree demo account to traders who are newand interested in the foreign exchangemarket.►Registering for a demo account allows anew trader to download the online tradingplatform that is used by the company’s clientstrading live accounts and make trades as ifthey were doing it with real money.
    • Characteristics of foreign exchange ☻ Its huge trading volume representing the largest asset class in the world leading to high liquidity. ☻ Its geographical dispersion; ☻ Its continuous operation: 24 hours a day except weekends, i.e., trading from 20:15 GMT on Sunday until 22:00 GMT Friday. ☻The use of leverage to enhance profit and loss margins and with respect to account size.
    • Retail Exchange MarketPeoplemay need to exchange currencies ina number of situations.for Eg… Fluctuations in exchange ratesA market based exchange rate will changewhenever the values of either of the twocomponent currencies change. The higher a countrys interest rates, thegreater will be the demand for that currency.
    • Market ParticipantsCentral banks participate in the foreign exchangemarket to align currencies to their economicneeds.Commercial companies. Commercial companies often trade fairly smallamounts compared to those of banks orspeculators, and their trades often have little shortterm impact on market rate.Central bankNational central banks play an important role inthe foreign exchange markets. They try to controlthe money supply, inflation, and/or interest ratesand often have official or unofficial target ratesfor their currencies.
    • Measures Initiated to Develop the Foreign Exchange Market in IndiaInstitutional Framework Foreign Exchange Regulation Act(FERA), 1973 was replaced by the marketfriendly Foreign Exchange Management Act(FEMA), 1999. Money and Securities Markets set up by theReserve Bank in 1999 was expanded in 2004to include foreign exchange markets
    • FOREIGN EXCHANGE MARKET STRUCTURE Market Segments Foreign exchange market activity takes place onshore with Many countries prohibiting onshore entities from undertaking the operations in offshore markets for their currencies. It is the central bank, or professional dealers association, which normally issues the code of conduct (Canales-Kriljenko, 2004).In auction markets, an auctioneer or auction mechanism allocates foreign exchange by matching supply and demand orders.
    • Top 10 Currency Traders as on May 2012 are
    • CURRENCY TRADING RULES► PLAN YOUR TRADE AND TRADE YOUR PLAN.► THE TREND IS YOUR FRIEND.►FOCUS ON CAPITAL PRESERVATION.►KNOW WHEN TO CUT LOSS.►TAKE PROFIT WHEN THE TRADE IS GOOD►BE EMOTIONLESS.►NOT TRADE BASED ON A TIP FROM A FRIENDOR BROKER.
    • Mistakes of Foreign exchange Traders ►Trading Out of Boredom or Anger ►Having Unrealistic Expectations. ►Taking Highly Correlated Trades. ►Failing to Use a Stop. ►Taking Unnecessary Risks. ►Being Too Patient With Losers and Not Patient Enough With Winners. ►Being a “Possum Trader”.