FOREIGN EXCHANGEMARKET (FOREX)

FOREIGN EXCHANGEMARKET (FOREX)

WHAT IS FOREX????WHAT IS FOREX????

• Is a market consisting of large international banks that purchase and sell currencies to facilitate international purchases of products, services and securities.

HISTORYHISTORY

• All banks in Malaysia trade forex

• History of FOREX in Malaysia – 1998 Bank Negara involves Forex to settle the debts of Malaysia.

• Malaysia loss 20 Billion

• JOSS SOROS – 1 second 1 Million

2 MARKET IN FOREX2 MARKET IN FOREX

• SPOT MARKET- makes possible the immediate exchange of one currency for another at the prevailing exchange rate.

• FORWARD MARKET- allows for negotiation of contracts that specify the exchange of an amount of one currency for another at a particular future date and a particular exchange rate.

ContCont

• The forex market is ALMOST 24/5 -hour market.• In trading forex, Pay No Commissions- no commission or

additional transaction fees, and its customers trade on spreads provided.

No Uptick Rule - Unlike the equity market, there is no restriction on short selling in the forex currency market, no matter which way the market is moving. Since currency trading involves buying one currency and selling another, a trader has the same ability to trade in a rising market as in a falling one.

Cont.Cont.

Forex Market Information Easily Accessible

- virtually all of the news that bears on the forex market is in publicly disseminated reports from governments or research institutions, and released to everybody at the same time

Cont.Cont.High Risk Investment Trading - foreign exchange on margin carries a high

level of risk, and may not be suitable for all investors.

- Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk

- 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

2 ways in trading forex2 ways in trading forex

• TECHNICAL ANALYSIS – analysis the graph

• FUNDAMENTAL ANALYSIS- news