Speculation in the Foreign Exchange Market
Added on 2023-06-13
13 Pages4160 Words301 Views
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Running Head: Forex Trading
SPECULATION IN THE FOREIGN EXCHANGE MARKET
TRIMESTER 1, 2018
STUDENT DETAILS:
Last Name First Name Student ID
ACCOUNT DETAILS:
Username Current Password
IBF- d4xFQun6
ACCOUNT BALANCE (provide the final balance after you have closed all positions and cancelled all pending orders):
AUD Balance 41,973.99
MY CLOSED TRADES (provide the number of completed trades in each of the boxes below – except for the last box where you should provide the
names of currencies, commodities and indices if any):
Day Trading 23
Forwards 0
Pending Orders (note this will not count
toward the 12 required trades)
0
Vanilla Options (note this is not required
but you must report if you have traded.
Options can be counted toward the 12
required trades)
0
Names of currencies, commodities and
indices traded (such as AUD, USD...) (note
commodities and indices are not required
but you must report if you have traded)
EUR, GBP, USD, AUD, NZD, CAD, JPY
WORD COUNT (excluding executive summary, footnotes and appendices to the report):
Word count 2000
SPECULATION IN THE FOREIGN EXCHANGE MARKET
TRIMESTER 1, 2018
STUDENT DETAILS:
Last Name First Name Student ID
ACCOUNT DETAILS:
Username Current Password
IBF- d4xFQun6
ACCOUNT BALANCE (provide the final balance after you have closed all positions and cancelled all pending orders):
AUD Balance 41,973.99
MY CLOSED TRADES (provide the number of completed trades in each of the boxes below – except for the last box where you should provide the
names of currencies, commodities and indices if any):
Day Trading 23
Forwards 0
Pending Orders (note this will not count
toward the 12 required trades)
0
Vanilla Options (note this is not required
but you must report if you have traded.
Options can be counted toward the 12
required trades)
0
Names of currencies, commodities and
indices traded (such as AUD, USD...) (note
commodities and indices are not required
but you must report if you have traded)
EUR, GBP, USD, AUD, NZD, CAD, JPY
WORD COUNT (excluding executive summary, footnotes and appendices to the report):
Word count 2000
Forex Trading 2
Executive Summary
I entered the market hoping to make huge profits given the fact that my capital was
leveraged. I opened 23 trades during the whole period, traded 7 currencies, gained in 16 trades,
lost in 6 and cancelled one using deal cancellation. However, I ended up at a losing position, I
closed many trades at a gain and fewer at a loss. The amount I lost at the losing trades was bigger
that all the gains. Even though I ended up in a loss my percentage of success was 69.6%
regardless on the gain size, and 26.1% was failure. On 27th April 2018, I traded some new and
gained significantly. I had however used the deal cancellation if the trade moved in opposite
direction.
During the entire trading period, I used some risk management tools such as stop losses.
Since I was taking long positions, I always fixed the stop losses far away from the market price
such that it was hard to be triggered even if the market moved in the opposite direction.
However, I fixed the stop loss closer to the market price during new period as there is high
potential of the market moving very fast either in my favor or to the opposite direction. This
market is risky but there is high potential of profit making
Executive Summary
I entered the market hoping to make huge profits given the fact that my capital was
leveraged. I opened 23 trades during the whole period, traded 7 currencies, gained in 16 trades,
lost in 6 and cancelled one using deal cancellation. However, I ended up at a losing position, I
closed many trades at a gain and fewer at a loss. The amount I lost at the losing trades was bigger
that all the gains. Even though I ended up in a loss my percentage of success was 69.6%
regardless on the gain size, and 26.1% was failure. On 27th April 2018, I traded some new and
gained significantly. I had however used the deal cancellation if the trade moved in opposite
direction.
During the entire trading period, I used some risk management tools such as stop losses.
Since I was taking long positions, I always fixed the stop losses far away from the market price
such that it was hard to be triggered even if the market moved in the opposite direction.
However, I fixed the stop loss closer to the market price during new period as there is high
potential of the market moving very fast either in my favor or to the opposite direction. This
market is risky but there is high potential of profit making
Forex Trading 3
Table of Contents
Executive Summary........................................................................................................................2
Introduction....................................................................................................................................4
My Risk Management Strategies....................................................................................................5
My Weaknesses..............................................................................................................................6
Lessons...........................................................................................................................................6
Conclusion......................................................................................................................................7
Bibliography....................................................................................................................................8
Appendices.....................................................................................................................................9
My Statement.............................................................................................................................9
My Closed Trades.....................................................................................................................12
Table of Contents
Executive Summary........................................................................................................................2
Introduction....................................................................................................................................4
My Risk Management Strategies....................................................................................................5
My Weaknesses..............................................................................................................................6
Lessons...........................................................................................................................................6
Conclusion......................................................................................................................................7
Bibliography....................................................................................................................................8
Appendices.....................................................................................................................................9
My Statement.............................................................................................................................9
My Closed Trades.....................................................................................................................12
Forex Trading 4
The Challenges and Secrets of Forex Trading
Introduction
Forex market is the market where currencies are traded with each other. Trading involves
the buying and selling of currencies. Currencies are traded in pairs e.g. EUR/USD
When you predict that the EUR currency will rise against the USD, the next step is to buy the
EUR. If the EUR actually gains value, you end up making some profit. On the contrary, if the
EUR loses value and you had bought the currency pair, you end up at a loss. Similarly, if with
the same currency pair EUR/USD you predict that the value of the USD is going to rise, the next
step is to sell the currency pair. If the USD actually gains value, you end up making some gains,
but if it losses value, you end up in losses. This two situations explains the concept of making a
profit whether a currency is gaining or losing value. I was faced by both situations and I
confirmed it to be true. This makes the forex market to be considered the most profitable market
in the whole world; with proper trading strategy, there is high potential of making huge profits.
FXB Trading (2017)noted that there are over 3 trillion USD traded daily on the forex
market, and that one has to deal with risks to make some profit; no trader can make profit on all
the trades entered, sometimes losses will be part of the trading. As I enter in forex trading, am
quite aware that forex trading is associated with great risks. The first thing I will do is to
familiarize myself with various risk management techniques that will help me in maximizing my
gains while minimizing my losses. For the entrance, I will start by trading small lots where I will
be risking small amounts of my virtual capital. I understand that the demo account operates in a
similar way to the live account, thus I will take it seriously not to exhaust my virtual capital.
One of the most important drivers for market movement according to many analysts is
that of economic news. The news have been argued by make the market move very fast within
some seconds. A single movement during the news period can result in making huge gains or
huge losses as well. For a start, I will first avoid trading currency pairs when the market news are
set to be announced on a sooner time (say like, I avoid taking long positions for a currency pair
with news expected to be announced either on the same day or the following day). In case I’ll
have such a long term trade, I will always close it some hours before whether it will be at a gain
or a loss. Later, as I familiarize myself with the easyMarkets platform and how it operates, I shall
The Challenges and Secrets of Forex Trading
Introduction
Forex market is the market where currencies are traded with each other. Trading involves
the buying and selling of currencies. Currencies are traded in pairs e.g. EUR/USD
When you predict that the EUR currency will rise against the USD, the next step is to buy the
EUR. If the EUR actually gains value, you end up making some profit. On the contrary, if the
EUR loses value and you had bought the currency pair, you end up at a loss. Similarly, if with
the same currency pair EUR/USD you predict that the value of the USD is going to rise, the next
step is to sell the currency pair. If the USD actually gains value, you end up making some gains,
but if it losses value, you end up in losses. This two situations explains the concept of making a
profit whether a currency is gaining or losing value. I was faced by both situations and I
confirmed it to be true. This makes the forex market to be considered the most profitable market
in the whole world; with proper trading strategy, there is high potential of making huge profits.
FXB Trading (2017)noted that there are over 3 trillion USD traded daily on the forex
market, and that one has to deal with risks to make some profit; no trader can make profit on all
the trades entered, sometimes losses will be part of the trading. As I enter in forex trading, am
quite aware that forex trading is associated with great risks. The first thing I will do is to
familiarize myself with various risk management techniques that will help me in maximizing my
gains while minimizing my losses. For the entrance, I will start by trading small lots where I will
be risking small amounts of my virtual capital. I understand that the demo account operates in a
similar way to the live account, thus I will take it seriously not to exhaust my virtual capital.
One of the most important drivers for market movement according to many analysts is
that of economic news. The news have been argued by make the market move very fast within
some seconds. A single movement during the news period can result in making huge gains or
huge losses as well. For a start, I will first avoid trading currency pairs when the market news are
set to be announced on a sooner time (say like, I avoid taking long positions for a currency pair
with news expected to be announced either on the same day or the following day). In case I’ll
have such a long term trade, I will always close it some hours before whether it will be at a gain
or a loss. Later, as I familiarize myself with the easyMarkets platform and how it operates, I shall
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