Your Introduction to FX
Welcome to the world of FX.
Each day over 5 trillion USD gets traded, which makes this asset class the absolute biggest on the planet!Â
Banks, hedge funds, prop desks, corporations of all sizes and some of the biggest asset managers all trade EURUSD, GBPUSD, USDJPY and many more – along with central banks and governments.
So with that in mind you are in good company.
Much of what you learn will enable you to meet your agreed objectives.
If it helps, I was not maths-oriented or very quick on my reactions when I started trading. I also started late in my life (late 30’s), yet I made a successful and profitable career in fx.
You can too but there are many things you need to know. It will be difficult and I will test you. Many times you will feel like the world is against you, and other days you might feel like walking on water.
Welcome to my world so get used to it. You need patience, resilience and a strong will to pick yourself up when the going gets tough.
So, back to the objectives.
The below are some of what my previous students have agreed with me. We will go through yours and agree on your plan in the first session.Â
đź’˛You will understand the key currency pairs and how to correctly read the market.
đź’˛You will be able to trade consistently.
đź’˛You will stand tall and talk with confidence about broad USD terms.
💲 You’ll engage with social media and your FX peers. (Mainly through LinkedIn)
đź’˛You will learn basic macro and
technical terms just enough to make a decent start.
💲You’ll be able to produce a market view and draw technical indicators.
đź’˛You will have a working but basic knowledge of squawk, charts, banks, risk
management and ultimately a market view.
Lastly, objectives change and that’s ok. Just let me know and we can tweak around a solution for you.
LETS GET STARTED ON THE INTRO
FX is pretty much an amalgamation of every asset class in the world. Every single USD spent in some way helps to move the price of the currency.
Let’s look at a basic example.
If Apple want to launch a new store in London they need GBP. Apple is a US company so they need to convert USD into GBP.
And there you have it.
FX is so much more than that because of speculation. Every bank (and big corporate) speculates in FX.
That basically means they buy or sell the currency pair with the hope that it moves so they can buy or sell at a profit – at a later point in time.
Each pair is the conversion rate. EURUSD is the most traded pair in the world. At the moment it sits at 1.1070.
What that means is for ONE EURO you will get 1.1070 USD.
10 or so major banks in the world are responsible for the majority of trading and each bank has a number of venues. A venue is a place where the price is shown.
The aggregate of that is collated to
Reuters and EBS. Each price has a bid and offer which is the difference between you wanting to buy it and sell it. A bit like the local currency exchange on Oxford Street.
Speculating – this is what I will teach you
The main currency pairs are EURUSD, GBPUSD (commonly known as CABLE), USDJPY, AUDUSD, NZDUSD, USCAD, and EURGBP but we will talk about cross currencies another time.
Each ccy has a unique personality – a bit like us! Sometimes we are complacent and can’t be bothered in doing anything, sometimes we feel great and other times we are in a really bad mood. Currencies are
EXACTLY the same. Remember ccys are a representation of the value of two countries.
Counties are people and we are currencies. Hence the personality analogy.
You will base most of your work on EURUSD so please do not worry about anything else.
EURUSD
The most traded pair and often the slowest moving.
Inexperienced traders normally start with this
pair as it’s a great way to learn the ropes. I know I did.
Like with everything there are two sides to the coin. The price has many things affecting the movement but in simple terms there are two
things. EUR and USD. What that means is anything going on in EUROPE. Employment, wages, inflation, monetary policy, positioning, flows, the Greek crisis, The Italian debt troubles… all of this moves the EURO side. The same applies to The US side.
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*****Adamis Principle Ltd Disclaimer*****
The information provided herein is being supplied in good faith based on information which we believe, but do not guarantee, to be accurate or complete. Adamis Principle is
not liable for any losses which are incurred from acting or not acting as a result of reading any of its publications. You acknowledge that you use the information provided at your own risk.
