10 thingsfx

10 Things You Wanted
To Know About The
Currency Market But
Were Afraid To Ask

www.bkforexadvisors.com

*Past performance is not indicative of future
results.
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.

Kathy Lien and Boris Schlossberg are employed as Director of Currency Research for Global Forex Trading, a division of
Global Futures & Forex, Ltd. (GFT). However, BKForex Advisor, which is a company owned and operated by Kathy and
Boris separately and independently from their employment with GFT. GFT does not control the content of the
BKTraderFX.com web site, and opinions expressed by Boris and Kathy on the BKTraderFX.com web site are not necessarily
the opinions of GFT. FX 360® is either a registered trademark or a trademark of Global Futures & Forex, Ltd., in the United
States and/or other countries.

This information should not be relied on as a substitute for extensive independent research before making your investment
decisions. BKForexAdvisor is merely providing this for your general information. The views of this author are not
necessarily those of Global Forex Trading, its owners, officers, agents or other employees. In addition, any projections or
views of the market provided may not prove to be accurate. Global Forex Trading will not be responsible for any losses
incurred on investments made as a result of any information contained in this presentation. Global Forex Trading and
BKForexAdvisor do not render investment, legal, accounting, tax, or other professional advice. If investment, legal, tax, or
other expert assistance is required, the services of a competent professional should be sought.

What Makes FX Different
From 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

Trade The World
1. FX Trades Continuously From
5PM ET Sunday – 5PM ET Friday
2. Session Hours (in ET)
Asia: 5PM-3AM
Europe: 3AM-12Noon
North America: 8AM-5PM

3. Most Active Time to Trade (ET) 4AM-12PM

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

Pay Spread Not
Commission
1. Spread = Buy at Offer Sell on Bid
2. You Cannot Join Bid or Offer
3. Spreads Are Quoted to 5th Decimal Point
4. Cost of Trade ~ 1-3bp of Notional Value

Leverage To The
Max
1. Stocks = 2:1 or 4:1
2. Futures = 10:1
3. FX? 50:1 !!!!!!!!!
4. 2% Move Against You Wipes You Out

FX Trading Platforms

1. Direct Dealer
2. Pass Through
3. ECN

5 Things To Consider In
Choosing FX Platform
1. Spread
2. Slippage
3. Ease of Order Entry
4. Charting
5. Reporting

2 Types of News

1. Economic Calendar - Scheduled
2. Headline News – Unscheduled

@Fxflow/Macro-fx
Subscribing to/Following Other People's 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 you'd 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 you're
following includes a public user that you've
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 you've
blocked: you're still able to read their tweets.

5 Things That Move The
Currency Market
1. Central Bank Decisions
2. Equity Risk On/Off
3. Political Uncertainty
4. Trade/Capital Flows
5. M&A Activity

What are double Bollinger Bands?

20 Period, 2 Standard Deviation
20 Period, 1 Standard Deviation

2 BB = Outer Lines
1 BB = Inner Lines

1. Using BB to determine trend or
range

2. Using BB to pick tops and
bottoms

#7 - Does Seasonality Matter?

http://contently.com/blog/wp-content/uploads/2012/01/calendar_icon3.png
B

Seasonality in Stocks

Source: GFT
B

Seasonality in Forex

Source: GFT
B

Does Seasonality Matter?

Source: GFT
B

Seasonality in March

Source: GFT
B

Election Year Price Patterns

Source:
GFT

B

#8 - How Do Carry Trades Work?

http://babypips.cachefly.net/school/images/fresman/summary-carry-trade.png

B

How Do Carry Trades Work?
Australian Dollar / Japanese Yen
4.25% 0.10%

http://swap.semanticweb.org/

B

3 Conditions for Carry Trades

- Low Volatility
- Risk Appetite
- Bias to Tighten Monetary Policy

B

#9 - Why Do We Care About
Central Bank Intervention?

B

Why Do We Care About
Central Bank Intervention?

B

How Does Central Bank
Intervention Work?

http://cdn.physorg.com/newman/gfx/news/hires/abusinessman.jpg
http://www.artremis.com/article/pics/ubs_trading_floor08.jpg
B

How Does Central Bank
Intervention Work?
SELL

Buy
http://a1.twimg.com/profile_images/264728980/jpy_usd.png

B

Foreign Exchange Reserves

http://cache.gawkerassets.com/assets/images/17/2010/09/500x_pile-
of-cash.jpg
B

More Yen in Circulation
Yen
=
Money Supply (avail of Yen)
=
Inflation
=
Interest Rates
&
Competitiveness
http://cache.gawkerassets.com/assets/images/17/2010/09/500x_pile-
of-cash.jpg
B

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
Bonds
Government
Cons
- Rarely Lasts

http://y.e-static.net/file-pic/handing-over-cash/handing-over-cash.jpg

B

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

#10 - How Does China Peg
the Yuan?

http://drpinna.com/wp-content/uploads/2010/07/yuan-USdollar.jpg

B

Will China Ever Float the
Yuan?

Source: KAL’s cartoon From The Economist print edition - Aug 9th 2007
- Illustration by Kevin Kallaugher

B

10 thingsfx

Recommandé

Recommandé

Contenu connexe

Tendances

Tendances (19)

Similaire à 10 thingsfx

Similaire à 10 thingsfx (20)

Plus de btrader

Plus de btrader (12)

Dernier

Dernier (20)

10 thingsfx