Professional Documents
Culture Documents
Deakin University
- TRIMESTER 1, 2014
Assignment
SPECULATION IN THE FOREIGN EXCHANGE MARKET
Due date:
Represents:
Format:
Grading:
Nature:
Word length:
Submission:
MPE 707 AS S I G N M E N T
Deakin University
- TRIMESTER 1, 2014
Disclaimer: Deakin University is not responsible for the content that appears on Easy Forex. The
use of Easy Forex in this unit is for educational purposes only. Easy Forex is one of many firms
providing services for transacting in the foreign exchange market, and students who wish to invest in
the foreign exchange market are advised to research the market thoroughly to find a suitable firm for
their purpose. Successful speculation in this assignment does not guarantee success in actual
speculative trading.
Please note: The demo accounts function in exactly the same way as a normal account, so if your
funds run low you may receive a default email from Easy Forex reminding you that your account
needs to be replenished using funds on a credit card. This may be a default setting on normal Easy
Forex accounts, but as demo account holders you do not have to, and should not, provide any
information of a personal nature to Easy Forex. So if you do receive any such email, please ignore it.
Before completing your assignment and turning it in, please ensure that all open positions are
closed.
Assessment:
The speculative component of this assignment is marked out of 15. Grades are based on
performance in trading, that is, the amount of money (denominated in AUD) in the account when the
assignment is submitted.
There is a hurdle requirement to pass this component of the assignment: you must undertake at
least 15 transactions (or deals) by the due date of the assignment (i.e. 15 May 2014) using the demo
account provided. For the purpose of this assignment, a transaction is defined as entering into an
open position and eventually closing it before submitting the assignment. So, for example, if you buy
USD 100,000 on 15 April 2014 and close this position on 18 April 2014, you would have completed 1
transaction. Any student who undertakes between 1 and 14 transactions during the trimester will
receive a score of 4.5 out of 15. A student who does not conduct any transaction will receive 0 out of
15. In order to calculate the scores, accounts will be ranked on performance. The distribution of
scores for those who satisfy the hurdle requirement (15 transactions or higher) is shown in the table
below:
Ranking of student
Score
15.0
Next 5%
13.5
Next 15%
12.0
Next 15%
11.0
Next 15%
10.0
Next 15%
9.5
Next 15%
9.0
Next 10%
8.5
Remainder
8.0
Deakin University
MPE 707 AS S I G N M E N T
- TRIMESTER 1, 2014
You will realize as you commence trading that the foreign exchange market is extremely volatile.
Trading in this market is, therefore, a very risky proposition. The purpose of this trading game is not
to make you a forex trader (though some of you may find that you have a talent for it). Rather, it is
meant to provide you with insights into the functioning of the foreign exchange market, which is best
achieved by participating in it.
(B) Report (25 points)
The report must start with a cover sheet (using the template posted on CloudDeakin). On the cover
sheet of your report, please provide the information as requested (your last name, first name, and
student ID; username and password for your trading account; the account balance and the number of
transactions undertaken; and the word count). Your assignment will only be graded when all
information required in the assignment cover sheet are provided.
The 1-page executive summary of the report should provide a brief account of your overall strategy,
the financial instruments you used, and justify the number of transactions and the total balance
(denominated in AUD) in your account.
In an Appendix to the report, please include the information below. First, click on the My Account tab
located on the top right of the trading platform when you log-in, and then:
(1) Click on My Summary and print the screen.
(2) Click on My Closed Positions, set the date from when you commenced trading to when
you stopped, and print the position data (you can use the print icon on the webpage). Please
note that there are different tabs for Day Trading, Limit Orders, and Forwards.
(3) Click on My Statement, set the date from when you commenced trading to when you
stopped, and print your statement (you can use the print icon on the webpage).
Your report should provide a detailed description of the trading strategy you employed. You do not
need to explain every transaction; this would be virtually impossible given the word limit. Rather,
your report should attempt to highlight how you used the theoretical tools developed in this unit, any
research you conducted on the foreign exchange market, and the manner in which you approached
your trading activity, using specific transactions as examples. Any news item or report that helped
you make your decisions should be carefully referenced, and if possible, included in the Appendix.
Please note that even if you lose money while speculating, it is quite possible for you to do well in this
component of the assignment if you are able to provide a clear and logical account of your strategy,
and possibly some insight into why it led to losses. Similarly, students that make money must also
substantiate their strategy in the report in order to do well in the assignment.
Assessment criteria (see the attached rubrics):
Your report should follow the Guide to assignment writing and referencing, available at this link:
http://www.deakin.edu.au/students/study-support/referencing
(the Harvard style is preferred).
Notes: GLO stands for Deakin Graduate Learning Outcomes (see the Unit Guide).
Meets
standard
(pass)
Exceeds
standard
(credit)
(high distinction)
0
to
2.5
point
Poor/lack
of
management
of
trading
volumes/funds.
Poor/lack
of
time
planning
on
trading
activities.
Poor/too
risky
strategy
overall.
Only
spot
transactions
conducted.
3
points
Limited
management
of
trading
volumes/funds.
Limited
time
planning
on
trading
activities.
Limited
strategy
overall.
Only
spot
transactions
conducted.
0
to
2
point
Lack
of
use
of
theory
in
real
world
context.
Lack
of
justification
of
how
theory
has
been
used
for
trading
activities.
3
points
2.5
points
Adequate
use
of
theory
in
real
world
Limited
use
of
theory
in
real
world
context.
context.
Limited
justification
of
how
theory
has
been
Adequate
justification
of
how
theory
has
used
for
trading
activities.
been
used
for
trading
activities.
3.5
points
Good
use
of
theory
in
real
world
context.
Good
justification
of
how
theory
has
been
used
for
trading
activities.
0
to
2
point
Lack
of
evidence
on
keeping
track
of
policy
announcements.
Lack
of
evidence
on
keeping
track
of
news.
Lack
of
justification
of
trading
activities
based
on
policy
announcments/news.
2.5
points
3
points
Limited
evidence
on
keeping
track
of
policy
Some
evidence
on
keeping
track
of
policy
announcements.
announcements.
Limited
evidence
on
keeping
track
of
news. Some
evidence
on
keeping
track
of
news.
Limited
justification
of
trading
activities
based
Adequate
justification
of
trading
activities
on
policy
announcments/news.
based
on
policy
announcments/news.
3.5
points
4
to
5
points
Good
keeping
track
of
policy
Excellent
keeping
track
of
policy
announcements.
announcements.
Good
keeping
track
of
news.
Excellent
keeping
track
of
news.
Good
justification
of
trading
activities
based
Excellent
justification
of
trading
activities
on
policy
announcments/news.
based
on
policy
announcments/news.
0
to
2
point
Lack
of
use
of
rick
management
tools.
Lack
of
justtification
of
how
risk
management
tools
have
been
used
in
trading
activities.
3
points
2.5
points
Adequate
use
of
rick
management
tools.
Limited
use
of
rick
management
tools.
Adequate
justtification
of
how
risk
Limited
justtification
of
how
risk
management
management
tools
have
been
used
in
tools
have
been
used
in
trading
activities.
trading
activities.
4
to
5
points
3.5
points
Excellent
use
of
rick
management
tools.
Good
use
of
rick
management
tools.
Excellent
justtification
of
how
risk
Good
justtification
of
how
risk
management
management
tools
have
been
used
in
trading
tools
have
been
used
in
trading
activities.
activities.
0
to
1.5
point
Poor/lack
of
executive
summary
and/or
appendix.
Poor
report
structure.
Poor
statements/terminologies
and
descriptions
of
the
trading
strategy.
Citations/references
are
missing
and/or
contain
too
many
errors.
2.5
points
2
points
Adequate
executive
summary
and
appendix.
Limited
attempt
on
executive
summary
and
Adequate
report
structure.
appendix.
Statements/terminologies
and
descriptions
Weak
report
structure.
of
the
trading
strategy
contain
some
minor
Statements/terminologies
and
descriptions
of
problems.
the
trading
strategy
contain
some
problems.
Citations/references
contain
some
minor
Citations/references
contain
some
errors.
errors.
3
points
Good
executive
summary
and
appendix.
Good
report
structure.
Good
statements/terminologies
and
descriptions
of
the
trading
strategy.
Citations/references
contain
few
minor
errors.
Overall score
[4 points]
(fail)
0
to
12
points
(pass)
12.5
to
14.5
points
3.5
points
Adequate
management
of
trading
volumes/funds.
Adequate
time
planning
on
trading
activities.
Adequate
strategy
overall.
Only
spot
transactions
conducted.
(distinction)
(credit)
15
to
17
points
4
points
Good
management
of
trading
volumes/funds.
Good
time
planning
on
trading
activities.
Good
strategy
overall.
Evidence
on
use
of
instruments.
(distinction)
17.5
to
19.5
points
5
to
6
points
Excellent
management
of
trading
volumes/funds.
Excellent
time
planning
on
trading
activities.
Excellent
strategy
overall.
Excellent
use
of
instruments.
4
to
5
points
Excellent
use
of
theory
in
real
world
context.
Excellent
justification
of
how
theory
has
been
used
for
trading
activities.
3.5
to
4
points
Excellent
executive
summary
and
appendix.
Excellent
report
structure.
Excellent
statements/terminologies
and
descriptions
of
the
trading
strategy.
Correct
citations/references.
(high
distinction)
20
to
25
points