What is Forex?

Introduction
What means FOREX?

FOREX
Foreign Exchange Market
You can shortly call FX
2
 “
FOREX market participants

•  Commercial Bank
•  Federal reverse Bank
•  Funds
•  Big Company
•  Import and Export Company
•  Retail Investor

3
 “
Mechanism of FOREX Market

Selling 1USD
earn profit
5 Baht

4
 Average Daily turnover of Forex is 5 Trillion Dollars.

How big is
FOREX
market?

5
• It has 11 times the daily volume of
all other global exchanges combined

• Its daily turnover is 40 times the

New York Stock Exchange (NYSE)

• $300 are traded every day for every

person on the planet

• A week's worth of Forex trading is

more than the annual United States
GDP

6
 “
Currency Symbol

It consists of 3 letters, usually the first two

are the country name and the last is the
name of the currency. However, there are
as well other examples, like EUR

Example: NZD
NZ = New Zeland
D = Dollar

7
When does
FOREX
market open?
London
New York EUR, GBP, CHF
Tokyo
USD, EUR, GBP JPY, AUD, NZD

Sidney
AUD, NZD, JPY

8
 Major Currencies

Rank Currency Symbol Nickname

1 U.S. Dollar USD Greenback

2 Euro EUR Euro

3 Japanese Yen JPY Yen

4 Pound sterling GBP Cable

5 Australian Dollar AUD Aussie

6 Swiss Franc CHF Swissy

7 Canadian Dollar CAD Loonie

9
 “
BID and ASK price

10
 “
How to read a FOREX Quote?

11
 What is spread?
“
Difference between bid and ask price

Symbol Bid Ask Spread

EURUSD 1.17104 1.17124 2

12
 What is lot?
“
Size or quantity of investment to open order

1 Standard Lot = Investment value is 100,000 base currency units

For example: 1 lot of USDCHF = 100 000 USD
Minimum order size is 0.01 Lot

Lot : 1 = +/- 1 pip = 10 USD

Lot : 0.1 = +/- 1 pip = 1 USD
Lot : 0.01 = +/- 1 pip = 0.1 USD

13
 What is pips?
“
The unit of price change in currency pair

14
 What is pips?
“
The unit of price change in currency pair

1.18270 – 1.17900 = 37 pips

Decimal position 4 is called Pips

15
 “
How to calculate Profit & Loss

Example: BUY order with up movement of 20 pips.

Cost of pips = base currency units * minimal decimal.
Lot Size X Pips X Cost of pips = +- $

1 lot X 20 Pips X 10 = 200 USD

16
 “
What is leverage?
Borrowed money from Broker

1 Standard Lot = Investment value is 100,000 units

Example:
EUR/USD – 1.1241 / 1.1243 (1 lot)
Leverage 1:10 – Margin – 11242
Leverage 1:100 – Margin – 1124.2
Leverage 1:1000 – Margin – 112.42

17
 How to trade?
▪  To start trading, trader needs
an access to the market.

▪  Usually it is done through

trading account.

▪  Trading account shall be linked

to the trading platform or
terminal, where trading will be
performed by trader.

18
 Gets access
TRADER to the Market through
platform, terminal, trading app etc.
TRADER

19
 MARKET
TRADER

TRADER BROKER or DEALER

20
21
DIFFERENCE
BETWEEN Dealer – executes orders by
his own. Dealer able not to
disclose the actual final
BROKER contragents (actually being
AND the contragent of the deal).
Broker – is an intermediary
between client and external
contragent which executes
clients orders on buying or
selling financial instruments.

DEALER

22
 DDE NDDE

DEALING Dealing Desk Execution – The No Dealing Desk Execution -

technology of processing of the technology of processing
DESK orders involving dealer that orders without the dealer.
EXECUTION provides quotes.

You send a request for order You have direct access to the
VS and will get in the line of order market, where, thanks to the
process. Dealer compares the largest liquidity providers, we
quote of your request and quote strive to give you the best price.
NO of the liquidity provider, and
then executes the order
DEALING
DESK
EXECUTION

23
 “
Execution types

INSTANT MARKET
Execution by a requested price, Execution by a current market
in case of price change, client prices, even it was changed
receive a Requote. during the order processing.

24
EURUSD

BUY
25
SELL USDCAD

26
THANK YOU!