LOGO Foreign Exchange Market First presented In “special topics in finance“ course in economic and management faculty of Sharif university October 22, 2011 Hossein Abdoh Tabrizi Maysam Radpour & Pedram Jahangiry

What is FOREX? Forex – The Foreign exchange: Market exists wherever one currency is traded for another. It is the largest and most liquid financial market in the world, and includes trading between large banks, central banks, currency speculators, multinational corporations, governments, and other financial markets and institutions.

Structure of Foreign Exchange  Core of the Foreign Exchange is the institutional Interbank Market  Retail Forex brokers bridge the interbank and retail Forex markets Interbank Market Retail Forex Market Retail Forex Brokers

Structure of Foreign Exchange Central Exchanges:  Physical location  Ex: New York Stock Exchange, Chicago Board of Trade, Chicago Mercantile Exchange  Regulated by home governments  Ex: SEC in the United States  All transactions processed through the exchange Foreign Currency Market:  Over-the-Counter market  No physical location  Market participants connected through worldwide network  No overarching regulatory body  Transactions are made through access to the OTC market

FX Features  Largest Market in the world  The average trade per day is more then 3-4 trillion $  No commission  24-hour market  Leverage 1:50, 1:100, 1:200  Use all the same market tools (Limits, Stops and etc )  Financial Times foresees about 200% grow in next 3 years, because of arrival of investment and pension funds  Make money in both rising and falling markets  Leverage 1:50, 1:100, 1:200

$ 3.5 Trillones $ 500 Billones $ 305 Billones $ 38 Billones

When Do Currencies Trade? Tokyo London New York Sydney

Most traded currencies by value

Experienced Dealer Say  Not easy to learn  Most lose a lot of $$ at first before learning how it works  Hard to find big Long-Term trends for the conservative & passive trader  Deals with Behavioral Finance

Technical analysis: based on indicators such as moving averages, volume oversold and undersold conditions etc Fundamental analysis: based on news and economic events, speeches by Key personalities such as fed chairman, ECB chairman etc. Stochastic !! Technical / Fundamental Analysis and stochastic

Questions?