1. Starting to Trade FOREX

2. Risk Warning High Risk Investment Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

3. How It Works Retail: Swaps (leveraged) Large banks: Flows 1. Identify rates/risk 2. Contract written with buyer (BB) EURUSD 1.5000 Sell 10k EURUSD 3. Close contract, repay liquidity provider Re-buy 10k EURUSD at 1.4000 Profit 10k*50c = USD5k Re-buy 10k EURUSD at 1.4000 Profit 10k*50c = USD5k 1. Need to buy US T-bills for safety 2. Sell Euros to buy Dollars 3. Buy US bonds EURUSD 1.5000 Sell 10k EURUSD Wait for next selling opportunity, get some interest

4. FOREX and Equities Advantages Able to long and short market Large number of correlations Extremely liquid, good for scalping/algos RollS/RollB 5, 6 pairs Much easier to analyze Disadvantages Much higher risk Almost always wrong Easy to buy into losses

5. Important 1.Manage risk 2.Identify macroeconomic patterns 3.Check opportunities of each pair 4.Know your stops and limits

6. What Affects Exchange Rates? Risk Rate expectations Repatriation

7. RISK ON/RISK OFF

8. Risk currencies Safety Currencies USD JPY (CHF) Risk Currencies Commodities Bloc – AUD, NZD, CAD Anti-dollar – EUR, GBP

9. Greece, the Euro and the S&P500

10. Risk Correlation

12. Liquidity Flows

14. RATES AND RATE EXPECTATIONS

15. USDJPY and Yields

16. Risk-driven Interest and Exchange Rates

17. Rate Expectations

18. During Rate Decisions

19. REPATRIATION

20. Post-Sendai USDJPY

21. What to Remember Short term: Risk appetite Medium term: Rates outlook Long term: Structural changes/risk

22. LOOKING AT CHARTS