Introduction to FOREX

ASSET CLASSES

What are the types of ASSET?

• An acronym short for “FOREIGN EXHANGE”

• Trading or exchanging of different countries currencies.
 ASSET CLASSES

MARKET OVERVIEW
Major Banks

EBS
Small & Medium Sized
Banks
Corporations
Retails
Trades
 ASSET CLASSES

MARKET HOURS
Days of the WEEK TIME
Opens 4 PM CST (Central Time) /
SUNDAY
+13hours to MNL Time
MONDAY 24 Hours
TUESDAY 24 Hours
WEDNESDAY 24 Hours
THURSDAY 24 Hours
Closed 4 PM CST (Central Time) /
FRIDAY
+13hours to MNL Time
SATURDAY Market Closed
 ASSET CLASSES

TRADE SESSIONS
EUROPEAN (London): 2AM CST – 11AM CST

UNITED STATES (New York): 7AM – 4PM CST

AUSTRALIA (Sydney): 3PM CST – 12AM CST

ASIA (Tokyo): 5PM CST – 2AM CST

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CURRENCY ABBREVIATIONS
• USD – U.S. Dollar
• EUR – Euro
• CAD – Canadian Dollar
• JPY – Japanese Yen
• GBP – Great British Pound
• AUD – Australian Dollar
• CHF – Swiss Franc
• NZD – New Zealand Dollar
• MXN – Mexican Peso
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CURRENCY MAJOR PAIRS

• EUR/USD
• GBP/USD
• AUD/USD
• NZD/USD
• USD/CHF
• USD/JPY
• USD/CAD
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CURRENCY MINOR PAIRS

• These are pairs that make up an additional 15% of the
trade volume in the market.
• These “cross-pairs” DOES NOT include the central US
Dollar.
• For example, EUR/JPY is a “minor” or “cross” currency
pair because it includes significant currencies, but not
the U.S. Dollar.
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PIPS
• PIP is an acronym for “percentage in point”.
• In practical terms, a pip is one-hundredth of one
percent, or the fourth decimal place (0.0001).
• The last decimal position of price is the fraction of a
pip, or a “pipette”.
• Remember, pips are usually calculated without using
the last decimal point.
 TERMINOLOGIES

PIPS
EX:
EUR/NZD current exchange rate is 120.325
We believe that the price will RISE to 120.789
120.789 PIPETTE 120.789
PIP
120.325
464 TOTAL PIPS caught is 46.

PIPS
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SPREAD
• Price difference between the bid (sell) price and the
ask (buy) price of a currency pair.
• BID PRICE - highest price that a buyer will purchase a
given asset from you.

• ASK PRICE - lowest price that a seller will sell a given

asset to you.
 TERMINOLOGIES

BUYING & SELLING

• You may hear the terminology “long” and “short” used
in trading when discussing trade positions.
• “Long” means your trade makes profit when the price
rises, or you are in a “Buy” position.
• “Short” means your trade makes profit when the price
falls, or you are in a “Sell” position.
 TERMINOLOGIES

MARKET CONDITIONS
BULLISH MARKET
• Refers to a market that is rising or increasing in price.
BEARISH MARKET
• Refers to a market that is falling or decreasing in price.
VOLATILITY
• Rapid change in currency pair over a period of time.
 TERMINOLOGIES

MARKET CONDITIONS
LIQUIDITY
• Enemy of volatility.
• It refers to how active a market is. It is determined by
how many traders are actively trading and the total
volume they’re trading.
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TRADING POSITIONS
LOT SIZE
• Describes how much of an asset you are trading at a
given time.
100,000 Units of
STANDARD (1.0) 1 PIP = 10$ of Currency
Currency
10,000 Units of
MINI (0.1) 1 PIP = 1$ of Currency
Currency

MICRO (0.01) 1,000 Units of Currency 1 PIP = 0.1$ of Currency

 TERMINOLOGIES

TRADING POSITIONS
MARGIN
• It refers to the amount of money that is available in
your trading account.
LEVERAGE
• Is simply the amount that you are borrowing from your
broker to participate in the financial markets.
Commonly called as “Capital”.
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