1 : Whats Forex Flashcards
What was the gold standard?
An attempt to peg currencies to gold, using an artificial model based on the price of gold, set at a fixed price per ounce within agreement
Who are the main participants in Forex?
Market makers Multinationals Speculators Central banks Retail traders
Which 3 main banks make up the market movers?
Deutsche Bank (20%)
UBS (12%)
Citigroup (11%)
How do multinationals play a part in Forex
They require currency exchange for real business purposes, such as paying for imports and receiving payments for exports.
Who are speculators?
Proprietary traders (banks trading their own money), hedge funds, commodity trading advisers, currency overlay managers.
Speculators trade…
Intraday
What part do central banks play in Forex?
They manipulate their own currency to reduce harmful volatility, which in turn could damage the reputation or economic stability of the country as a result.
Which central bank frequently involves itself in the Forex market?
The Bank of Japan
How can a central bank interfering with Forex help their own country’s currency?
If they export goods and their currency is doing well then goods will cost more, therefore less people will buy, banks weaken currency to keep export prices competitive.
How do we keep tabs on what the market makers are doing?
Use volume in price charts. Volume reveals activity.
If we see a price move where the market movers are NOT joining in then we….
Stay out of the market
If we see a price move where the market movers ARE joining in then we….
Jump into the market
What public holidays is he forex closed on?
Christmas Day and New Years Day
The Forex market opens on …. and closes on …..
Sunday evening and Friday night
What is the order of countries joining the market as time goes on?
NZD, AUD, JPY, EUR/CHF, GBP, USD/CAD
