The document provides an overview of foreign exchange (forex) trading, which involves the exchange of currencies and operates in a 24-hour global market. It details various trading methods such as spot markets, futures, options, and exchange-traded funds, along with the benefits and risks associated with forex trading. Key benefits include market flexibility, liquidity, and low transaction costs, while risks include exchange rate, interest rate, and country risks.

1. Forex Trading
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2. What is Foreign
Exchange (Forex)??

3. •
Foreign exchange refers to the
exchange of currencies.
•
It is trading of currencies from
different countries against each other.
•
The FX market is the place where
different currencies are traded.

4. • The foreign exchange market
(FOREX Market) is the World's
biggest O-T-C market or the
"Interbank", market due to the
fact that the entire market is run
electronically, within a network of
banks, continuously over a 24hour period.
• More than 90% of all currencies
are traded against the US Dollar
(USD).

5. Reasons of Foreign Exchange Trading
Click to edit Master textBusiness Operations
Global
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styles
Second level
Second level
Third level
Third level
Profit Speculation
Brokerage Purpose

6. Major Currencies
Symbol
Country
Currency
Nickname
USD
United States
Dollar
Buck
EUR
Euro
Fiber
JPY
Euro zone
members
Japan
Yen
Yen
GBP
Great Britain
Pound
Cable
CHF
Switzerland
Franc
Swissy
CAD
Canada
Dollar
Loonie
AUD
Australia
Dollar
Aussie
NZD
New Zealand
Dollar
Kiwi

7. Different Ways to Trade Forex
• Spot Market
In the spot market, currencies are traded immediately or "on the spot,"
using the current market price. What is important about this market is
its simplicity, liquidity, tight spreads, and round-the-clock operations.
• Futures
Futures are contracts to buy or sell a certain asset at a specified price on
some future date. It is a binding contract between the two parties (buyer
and the seller), which allows them to trade a certain amount of
currency pair at predetermined price in future time

8. Different Ways to Trade Forex
• Options
An "option" is a financial instrument that gives the buyer the right or the
option, but not the obligation, to buy or sell an asset at a specified price on
the option's expiration date. If a trader "sold" an option, then he or she
would be obliged to buy or sell an asset at a specific price at the expiration
date.
• Exchange-traded Funds
Exchange-traded funds or ETFs are an investment fund which are traded on
the stock exchanges like shares.
They are invested in a single currency or basket of currencies. The investors
who are not more inclined towards futures or forex markets uses currency
ETF's.

9. Benefits of Forex Trading
Time and place flexibility – As we know the market is open 24 hours each day,
so we don’t have to worry about the managing our own time.
Highly liquid market – The market is so huge, that it is extremely liquid.
Low transaction costs – The transaction costs are determined by the bid/ask spread,
is usually less than 0.1%, and in case of large dealers it may be even lower.
Margin Based Trading - Once you have funded a margin account with your broker,
you can engage in any trading activity you wish so long as you have sufficient margin
remaining in your account.

10. Is Forex Trading
Risk-free?
Unfortunately No!!!
There are some risks which
are associated with the
Foreign exchange trading.

11. Exchange Rate Risk
This type of risk can arise when there is an
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imbalanced supply and demand situation in
Second
the forex market. Solevel
traders have to be
Third level
careful, in terms of putting limits on trades
in the form of stop loss.
Interest Rate Risk
These are the risks which are related with
futures, swap and forward trading. This is
due to the fluctuations, maturity gaps and
amount mismatches occurred in the trade.

12. Country Risk
This risk is very crucial because of the
interference of the government involved in the
markets. Sometimes party may receive some
unexpected return due to country’s policy and
norms incorporated by government.

13. We Wish you a
Happy Currency Trading!!!

14. Knowledge is like a line
with no ends…
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