My Report

HARVEST FUTURES CONSULTANTS.
TABLE OF CONTENTS
S.NO 01 CHAPTERS CHAPTER-1: INTRODUCTION
PAGE NO.
02
CHAPTER-2: STATEMENT OF PROBLEM TITLE OF THE STUDY OBJECTIVES OF THE STUDY METHODOLOGY LIMITATIONS OF THE STUDY CHAPTER-3: INDUSTRY PROFILE
03
04
CHAPTER-4: CORPORATE PROFILE PROMOTERS PROFILE MISSION VISSION OBJECTIVES ORGANIZATION STRUCTURE MANAGEMENT OF THE COMPANY
05
CHAPTER-5: THEORATICAL BACKDROP OF RATIO ANALYSIS, ANALYSIS & INTERPRETATION
06
CHAPTER-6: FINDINGS SUGGESTIONS CONCLUSION
07
CHAPTER-7: ANNEXURE BIBLIOGRAPHY
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CHAPTER 1
Introduction
1. CURRENCY TRADING IN GLOBAL MARKET 1.1 Introduction to forex The foreign exchange market, which is usually known as "forex" or "FX," is the largest financial market in the world. Compared to $74 billion a day volume of the New York Stock Exchange, the foreign exchange market looks extremely large with its $4 TRILLION a day trade volume, Forex, unlike other financial markets, is not tied to an actual stock exchange. Forex is an overthe-counter (OTC) or off-exchange market. 1.2 Purpose: The foreign exchange market is the mechanism by which currencies are valued relative to one another, and exchanged. An individual or institution buys one currency and sells another in a simultaneous transaction. Currency trading always occurs in pairs where one currency is sold for another and is represented in the following notation: EUR/USD or CHF/YEN. The exchange rate is determined through the interaction of market forces dealing with supply and demand. Foreign Exchange Traders generate profits, or losses, by speculating whether a currency will rise or fall in value in comparison to another currency. A trader would buy the currency which is anticipated to gain in value, or sell the currency which is anticipated to lose value against another currency. The value of a currency, in the simplest explanation, is a reflection of the condition of that country's economy with respect to other major economies. The Forex market does not rely on any one particular economy. Whether or not an economy is flourishing or falling into a recession, a trader can earn money by either buying or selling the currency. Reactive trading is the buying or selling of currencies in response to economic or political events, while speculative trading is based on a trader anticipating events.
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1.3. Background Historically, Forex has been dominated by inter-world investment and commercial banks, money portfolio managers, money brokers, large corporations, and very few private traders. Lately this trend has changed. With the advances in internet technology, plus the industry's unique leveraging options, more and more individual traders are getting involved in the market for the purposes of speculation. While other reasons for participating in the market include facilitating commercial transactions (whether it is an international corporation converting its profits, or hedging against future price drops), speculation for profit has become the most popular motive for Forex trading for both big and small participants.
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CHAPTER. 2
RESEARCH PROBLEM
2.1. STATEMENT OF THE PROBLEM In this study the research problem is acquiring a new investor many of the investor lack of the knowledge about the forex market hence they know degree of risk and return our responsibility to educate the investors. 2.2. OBJECTIVES OF STUDY: To gain insight about forex currency market. To study on currency trading risk management in forex market To identify the investors preference towards forex currency market. To understand the degree of awareness among the investors towards currency market in Bangalore. To offer suggestions for better business of currency trading to investor
2.3. METHODOLOGY: Methodology is the technique how the data is collected which requires for the study. There are two types of data a) Primary Data: Which is original in character, the data is collected by asking questions directly to the Investors in the organization with prepared set of questionnaire. The research design adopted in this study is descriptive research. b) Secondary Data: Secondary data is the data which is already collected for some other purpose, other than to solve problem at hand. This is not original in character. The main sources of secondary data are books, magazines, Internet and other material given by the company.
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2.4. RESEARCH DESIGN: A research design is a framework or blueprint for conducting the marketing research project. It details the procedure necessary for obtaining the information needed to solve the research problem. In this case, descriptive research is undertaken which answers who, what, when, where, why, and how questions. Research Design Exploratory Research & Descriptive Research Research Instrument Sample Size Sample Scope Sampling Method Sampling Tool Survey Method 30 Banglore Non Probability Sample (Convenience sampling) Percentage
2.5. LIMITATIONS OF THE STUDY: The trader has to learn various things in market to trade currency. The time span for my study was very short. Respondents bias was another limiting factor
HYPOTHESIS FORMULATION. Hypothesis is any assumption for the research effectively and efficiently. The hypothesis of my research is that:
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HARVEST FUTURES CONSULTANTS. Forex market is very volatile in nature. Forex changing day by day in economy growth. Different factors like speculation, hedging forces different people to enter indifferent market, Risk is there in forex market and various risk management strategies are there to manage it.
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HARVEST FUTURES CONSULTANTS. CHAPTER.3
Industry profile
Foreign exchange market (Forex, FX, or currency market) is a global, worldwide decentralized financial market for trading currencies. Financial centers around the world function as anchors of trading between a wide range of different type of buyers and sellers around the clock, with the exception of weekends. The foreign exchange market determines the relative values of different currencies. The primary purpose of foreign exchange is to assist international trade and investment, by allowing business to convert one currency to another currency. For example, it permits a US business to import British goods and pay pound sterling, even though business income is in US dollars. It also supports direct speculation in the value of currencies, and the carry trade, speculation on the change in interest rates in two currencies. In a typical foreign exchange transaction, a party purchases a quantity of one currency by paying a quantity of another currency. The modern foreign exchange market began forming during the 1970s after the decades of government restrictions on foreign exchange transaction (the Bretton Wood s system of monetary management established the rules of commercial and financial relations among the worlds major industrial states after World War II), when countries gradually switched to floating exchange rates from the previous exchange rate regime, which remained fixed as per the Bretton Woods system.
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3.1. Market participants 3.1.1. Banks:

The interbank market caters for both the majority of commercial turnover and large amounts of speculative trading every day. Many large banks may trade billions of dollars, daily. Some of this trading is undertaken on behalf of customers. But much is conducted by propriety desks, which are the trading desks for banks account. Until recently, foreign exchange brokers did large amount of business, facilitating interbank trading and matching anonymous counterparts for large fees. Today, however, much of this business moved on to more efficient electronic systems. The broker squawk box lets traders listen in on ongoing interbank trading and is heard is most trading rooms, but turnover is noticeably smaller than just a few years ago.
3.1.2. Commercial companies:

An important part of this market comes from the financial activities of companies seeking foreign exchange to pay goods or services. Commercial companies often trade fairly small amounts compare to those of banks or speculators, and their trades often have little short term impact on market rates. Nevertheless, trades flows are an important factor in the long-term direction of a currencys exchange rate. Some multinational companies can have an unpredictable impact when very large positions are uncovered due to exposures that are not widely known by other market participants.
3.1.3. Central banks:

Forex is fixing is the daily monetary exchange rate fixed by the national bank of each country. The idea is that central banks use the fixing time and exchange rate to evaluate behavior of their currency. Fixing exchange rates reflects the real value of equilibrium in the forex market. Banks, dealers and online foreign exchange traders use fixing rates as a trend indicator. The mere expectation or rumor of central bank intervention might be enough to stabilize a currency, but aggressive intervention might be used several times each year in the countries with a dirty float currency regime. Central banks do not always achieve their objectives. The
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HARVEST FUTURES CONSULTANTS. combined sources of the market can easily overwhelm any central bank. Several scenarios of this nature were seen in the 1992-93 ERM collapse, and in more recent times in southeast Asia.
3.1.4.Hedge funds as speculators:

About 70% to 90% of the foreign exchange transactions are speculative. In other words, the person or institution that bought or sold the currency has no plan to actually take delivery in the end; rather, they were solely speculating on the movement of that particular currency. Hedge funds have gained a reputation for aggressive currency speculation since 1996. They control billions of dollars of equity and may borrow billions more, and thus may overwhelm intervention by central bank to support almost any currency, if the economic fundamentals are in the hedge funds favor.
3.1.5.Investment management firms

Investment management firms (who typically manage large accounts on behalf of customers such as pension funds and endowments) use the foreign exchange market to facilitate transactions in foreign securities. For example an investment manager bearing an international equity portfolio needs to purchase and sell several pairs of foreign currencies to pay for foreign securities purchases. Some investment management firms also have more speculative specialist currency overlay operations, which manage clients currency exposure with the aim of generating profits as well as limiting risk. Whilst the number of this type of specialist firms is quite small, many have a large value of assets under management (AUM), and hence can generate large trades.
3.1.6. Retail foreign exchange traders:

Individual retail speculative traders constitute a growing segment of this market with the advent of retail forex platforms, both in size and importance. Currently, they participate indirectly through brokers or banks. Retail brokers, while largely controlled and regulated in USA by CFTC and NFA have in the past been subjected to periodic foreign exchange scams. To deal with the issue, the NFA and CFTC began (2009) imposing stricter requirements, particularly in relation to the amount of Net Capitalization required of its members. As a result many of the
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HARVEST FUTURES CONSULTANTS. smaller and perhaps questionable brokers are now gone or have moved to countries outside the US. A number of the forex brokers operate from the UK under FSA regulations where forex trading using margin is part of the wider over-the-counter derivatives trading industry that includes CFDs and financial spread betting. There are two main types of retail FX brokers offering the opportunity for speculative currency trading: brokers and dealers or market makers. Brokers serve s an agent of the customer in the broader FX market, by seeking the best price in the market for a retail order and dealing on behalf of the retail customer. They charge a commission or mark-up in addition to the price obtained in the market. Dealers or market makers, by contrast typically act as principal in the transaction versus the retail customer, and quote price they are willing to deal at.
3.1.7. Non-bank foreign exchange companies:

Non-bank foreign exchange companies offer currency exchange and international payments to private individuals and companies. These are also known as foreign exchange brokers but are distinct in that they do not offer speculative trading but rather currency exchange with payments ( i.e., there is usually a physical delivery of currency to a bank account). It is estimated that in the UK, 14% of the currency transfers /payments are made via foreign exchange companies. These companies selling point is usually that they will offer better exchange rates or cheaper payments than the customers bank. These companies differ from money transfer/remittance Companies in that they generally offer higher-value services.
3.1.8. Money transfer/remittance companies and bureau de changes

Money transfer companies/remittance companies perform high-value low-value transfers generally by economic migrants back to their home country. In 2007, the Aite Group estimated that there were $369 billion of remittances (an increase of 8%compared to 2006).the four largest markets (India, China. Mexico and the Philippines) receive $95 billion. The largest and best known provider is Western Union with 345,000 agents globally followed by UAE exchange. Bureau de change or currency transfer companies provide low value foreign exchange services for travelers. These are typically located at airports and stations or at tourist
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HARVEST FUTURES CONSULTANTS. locations and allow physical notes to be exchanged from one currency to other. They access the foreign exchange markets via banks or non bank foreign exchange companies. 3.2. ABOUT FOREX FOREX, FOREIGN EXCHANGE, foreign exchange market is a cash interbank market established in1971. The FOREX is a group of approximately 4500currency trading institutions including international banks, government central banks and commercial companies. FOREX is a true 24hrs market and trading begins each day in Sydney and moves around globe as the business day begins in each financial centre, first in Tokyo, then in London and then New York.(Timings New Zealand &Australia 02:30-12:30, Japan and Singapore :06:30 -14:30, Germany and England :14:30-21:30, America :18:30-02:30). The forex market is larger than all other financial markets combined. It is two ways market were both buying and selling can be done. FOREX market is the largest financial market in the world with a daily average turnover of $4 trillion it is 30 times larger than the combined volume of all us equity market. The most traded currencies in forex market are US dollars, Euro, Japanese Yen, Pound sterling, Australian Dollar, Swiss franc, Canadian Dollar, Hong Kong Dollar, Swedish Koran, and New Zealand Dollar,, FOREX is the most liquefied market in the world.
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HARVEST FUTURES CONSULTANTS. CHAPTER.4
Company profile
4.1.Background and Inception:
Harvest group was founded to provide the best possible, indices and stock trading experience for online trade. Harvest group is backed by a large financial group of companies with over US $ 16 billion in assets under management. Harvest group is takes pride in its stringent management control as far as its business infrastructure goes. Utilizing its subsidiary companies or strategic alliances of Harvest International Consortium Ltd. in Hong Kong and in Indonesia and Harvest Futures Consultants India Pvt. Ltd, to provide paramount global financial advice network to our clients. Harvest group was established in 2003. Harvest Group has a worldwide operation network reaching 8 countries and 40 regions. USA Indonesia ,INDIA, Hong Kong , china, Vietnam, Brunei, Malaysia, Philippines, Singapore, Taiwan, Laos and Thailand employing more than
1300 staffs to serve the global demanding market in financial services. Harvest Group has built a strong team in the area of marketing in order to provide our clients professional services as well as customer support. From senior management, seasonal financial consultants, state of art trading platform as well as professional customer services team. Harvest Group is dedicated in providing our clients the fastest, best possible financial service. Harvest offer the long range of trading technology, featuring the powerful, MT4 (Meta Trading 4) station for individual traders and multi account platforms for asset, and PDA and Smartphone solutions for trading on the move.
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4.2. Nature of business carried:

Harvest is a financial service providing company it operates globally. Harvest group has various business activities like 1. Information & Training Centre 2. Futures Contract Transactions 3. Foreign Exchange Trading 4. Index Trading 5. Commodity Bullion Trading
4.3. VISION AND MISSION: Vision:

To become most credible Future broker globally with the widest portfolio of financial products that serves the clients globally, investing and transacting in Futures Exchange, especially with major commodity products and Foreign Exchange.
Mission:
To give most credible advice to individual investors, on potential investment opportunities in Future Exchange, balancing risk and profitability.
To educate the investing public on Futures Exchange and provide the complete understanding so that they may exploit the maximum benefits.
To engage with all the stakeholders and help create an organized Futures Exchange that is credible and transparent while promoting healthy and fair competition.
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4.4. Service profile:

The Harvest group is basically a financial service provider. It provides the various services as follows. 1. Information & Training Centre 2. Futures Contract Transactions 3. Foreign Exchange Trading 4. Index Trading 5. Commodity Bullion Trading
4.5. Area of operation

Harvest group was established in 2003. Harvest Group has a worldwide operation network reaching 8 countries and 40 regions. USA Indonesia ,INDIA, Hong Kong , china, Vietnam, Brunei, Malaysia, Philippines, Singapore, Taiwan, Laos and Thailand employing more than
1300 staffs to serve the global demanding market in financial services. In India harvest group operates mainly in Bangalore, Delhi, and Chennai. Harvest group has channel partners in India at various places i.e. New Delhi, Mangalore (Karnataka), Vijayawada (Andhra Pradesh), Chandigarh
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4.6. Ownership pattern:

The Company shall mean HARVEST FUTURES CONSULTANTS INDIA PVT. LTD Board shall mean the Board of Directors of the Company. Board Members shall mean the Members on the Board of Directors of the Company. Executive Directors shall mean the Board Members who are in whole-time employment of the company.
4.7. CORPORATE INFORMATION
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HARVEST FUTURES CONSULTANTS. DATE OF INCORPORATION : 18th November 2009 REGD.OFF : Harvest Futures Consultants India Pvt.Ltd #17 "Park View", Curve Road, Tasker Town Bangalore-560051 Karnataka, India BUSINESS ACTIVITIES EXECUTIVE DIRECTOR BUSINESS DIRECTOR DIRECTOR ADVOCATE : Advisory Consultancy Analysis CFD : Mr. Richard Tai Swee Keong (Malaysia) : Mr.Rajendran Pillai (Singapore) : Mr.Naveen Kumar H.M (India) : Chambers of Jayashri Mural 303,3rd Floor, Commerce House, Millers Road, Bangalore-560052 AUDITOR : C.P Ethirajan #38,1st Floor, Nehru Circle, Sheshadripuram Bangalore-560020 COMPANY SECRETARY : S.P NagarajanS-818,8th Floor, South Block-Manipal centre 47, Dickenson Road, Bangalore-560042
4.8. Infrastructure facilities.
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HARVEST FUTURES CONSULTANTS. The branches of the Harvest company are computerized and all transactions of trading done with ease of operation Telephone Intranet and internet Conference room Training room Help line : knowledge about trading and marketing. Company e-mail For each and every employee and advisors of the company will get their personal I D where in they are recognized as the part of the Harvest and update things , Like perk, commission account, keep in track of target.
4.9. Achievements and Awards:
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4.9. End to end process:
Data gatthering
trading the clients account
tele calling
following interested investors explaining about currency trading and forex
fixing appointment
4.9.1. End to end process involves various steps: Data gathering: This is the first step which involves collection of data pertaining to the telephones numbers. Tele calling: Tele calling involves picking the numbers and making the calls with proper communication skills.
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HARVEST FUTURES CONSULTANTS. Fixing appointments: Through proper communications, the employee will convince the person on telephone and convince the people who are interested and fixing the appointment for the interested people. Explanation about currency trading and forex. The employee (business consultant) will communicate with customer and explain about rules and regulation of the trading and also about the company. Following interested people: The company will follow the interested people for few days. Try to open the account as soon as possible. Opening the open: When the person is ready to invest the money in the forex, the account is opened in the bank. Trading are carried down. Trading the account: Once the account has been opened the client or the portfolio manager of the company will trade the account with proper knowledge about the market. The all transactions are done through the account. If the client is unable to trade, then behalf of the client the portfolio manager will trade the account.
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4.10. Mc Kenseys 7 S Frame Work

The McKinsey 7S model involves seven interdependent factors which are categorized as either "hard" or "soft" elements:
Hard Elements Strategy Structure Systems
Soft Elements Shared Values Skills Style Staff
"Hard" elements are easier to define or identify and management can directly influence them: These are strategy statements; organization charts and reporting lines; and formal processes. "Soft" elements, on the other hand, can be more difficult to describe, and are less tangible and more influenced by culture. However, these soft elements are as important as the hard elements if the organization is going to be successful.
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Strategy:
Strategy refers to the determination of the purpose and the basis long term objective of an enterprise and the adoption of course of action and allocation of resources necessary to achieve these aims. Harvest aims at higher profitability through customer satisfaction and bringing awareness about the forex market. Maximizing the investors wealth in short duration of time.
Structure:
It represents the way the organization is structured and who reports to whom. Business needs to be organized in a specific form of shape that is generally referred to as organizational structure. Organizations are structured in a variety of ways, dependent on their objectives and culture. The structure of the company often dictates the way it operates and performs. Harvest has a well-build organization structure as:
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HARVEST FUTURES CONSULTANTS. Corporate office Regional office Branches
The head of the branch (Director) come down and assist the portfolio manager to perform well various activities of the company and managers assist assistant portfolio managers and last stage in the structure is business consultants. SYSTEMS: Systems define the flow of activities involved in the daily operation of business, including its core processes and its support systems. They refer to the procedures, processes and routines that are used to manage the organization and characterize how important work is to be done. Harvest groups systematic framework stands for rules and regulations, procedure and practices that must followed to carry out tasks in the organization. These include the formal system procedure of using intranet facility being the whole organization is computerized. The flow of decision is from the top level directors through managers to business consultants.
STYLE: Cultural style, distinct management and how key managers behave in achieving the organizational goal. It includes the dominant values, beliefs and norms which norms which develop over time and become relatively enduring the features of the organizational life. Harvest follows participative style. Harvest take collective decision at all levels of the management. Leadership style: participative or democratic
STAFF:
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HARVEST FUTURES CONSULTANTS. Organization are made up of humans and its people who make the real difference to the success of the organization in the increasingly knowledge based society The harvest has very efficient and multi skilled employees who has the strength and complete knowledge about banking activities and flexibility to work in different departments. SKILLS: Distinct capabilities of personnel and organizations as a whole Managerial skill Computer skill Inter personal skill Creative and innovative skill.
SHARED VALUES: Shared values are the core values of the company that are evidenced in the corporate culture and the general work ethic. All members of the organization share some common fundamental ideas or guiding concepts around which the business is built. The shared value or super ordinate goal of the company is to achieve excellence in a particular field. These values and common goals keep the employees working towards a common destination as a coherent team and are important to keep the team spirit alive. Consider the employees as the key recourses of the organization and provide
assistance. Customer satisfaction rather than profit maximization.
4.11. SWOT ANALYSIS OF HARVEST FUTURES CONSULTANTS PVT. LTD.
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SWOT analysis is an acronym for the internal strengths and weaknesses of a firm and the external
opportunities and threads facing that firm. SWOT analysis helps managers to have quick overview of the firms strategic situation and assess whether there is a sound fit between internal resources, values and external environment.
STRENGTHS: 1. Good working Environment 2. No competition. 3. Skillful employees. 4. Led by the dedicated and expertise focused professional. 5. Efficient trading with live, executable prices with instant trade confirmation 6. High liquidity. 7. Advanced analysis tools. 8. Real-time account risk management. 9. Metatrader4based platform.
WEAKNESSESS:
1. Lack of expertise in trading 2. Inaccessibility to innovative product or services that can assist you. 3. Emotional instability
OPPORTUNITIES:
1. A developing market such as the Internet. 2. Competitive market full of brokers 3.Moving into new trading strategies that offer increased profits with less cost and time saver e.g. auto pilots or robots THREATS: 1. The ever emerging Internet market. 2. Lack of guidance on choice of broker.
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HARVEST FUTURES CONSULTANTS. 3. Accessibility to tested and trusted forex auto trader (robot) 4. Emotional instability. 5. Constancy of power supply- this is a serious threat because to auto trade your PC must be on 24/7. The application of the SWOT analysis is however subjective, that is, results cannot be generalized because individual differences has a role to play in the final result.
4.12. LEARNING EXPERIENCE:
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HARVEST FUTURES CONSULTANTS. Learning is a continuous process by which we acquire the knowledge that we apply to our future endeavor. The university has given me an opportunity to learn many aspects pertaining to the working of the organization. The objective of the project is to study the structure, style, system, skills, strategy, staff, shared values and functioning of the organization. The theoretical study of the management practices will not offer a useful insight if not supplemented by practical exposure. The Project work at Harvest Futures Consultants Private Limited exposed me to the management practices. The strategy studied in theory in a controlled environment will fail to deliver in the actual business scenario. Hence this study taught me that firms have to thrive iin harsh market realities and even the best of the strategies may be ineffective.
It was an enriching experience to work in Futures Consultants Private Limited. It gave me an good exposure where I acquired the practical knowledge about the overall functioning of the organization. The project work has given me an opportunity to study the currency trading in the global market and also how to manage the risk while trading. The project provided an opportunity to relate theoretical aspects in working environment concepts such as delegation of authority, reporting, services etc. Constant growth and innovation trading and customer satisfaction has made Harvest group what it is today. It helped me realize that any organization cannot be complacent with its current position. It has to continuously innovate and come out with new ideas. The interaction with the employees and customers gave me an insight and a firsthand experience of the organizational scenario and has indeed widened my horizon of knowledge. The disciplined friendly and supportive working environment leads to higher productivity, all the staff works in a highly disciplined atmosphere.
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CHAPTER 5
5a. Trading Operation of the forex market:

Whereas there are thousands of securities on the stock market, in the FOREX market most trading takes place in only a few currencies. These major currencies are most often traded because they represent countries with esteemed central banks, stable governments, and relatively low inflation rates. The 8 most widely traded major currencies are as follows.
Symbol USD EUR JPY GBP CHF CAD AUD NZD Country United States Euro zone members Japan Great Britain Switzerland Canada Australia New Zealand Currency Dollar Euro Yen Pound Franc Dollar Dollar Dollar Nickname Buck Fiber Yen Cable Swissy Loonie Aussie Kiwi
Currency symbols always have three letters, where the first two letters identify the name of the country and the third letter identifies the name of that country's currency.
5.1. Major Currency Pairs

The currency pairs listed below are considered the "majors". These pairs all contain the U.S. dollar (USD) on one side and are the most frequently traded. The majors are the most liquid and widely traded currency pairs in the world.
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HARVEST FUTURES CONSULTANTS. Pairs EUR/USD USD/JPY GBP/USD USD/CHF USD/CAD AUD/USD NZD/USD Countries Euro zone / United States United States / Japan United Kingdom / United States United States/ Switzerland United States / Canada Australia / United States New Zealand / United States FX Geek Speak "euro dollar" "dollar yen" "pound dollar" "dollar swissy" "dollar loonie" "aussie dollar" "kiwi dollar"
The chart below shows the ten most actively traded currencies in forex market.
The dollar is the most traded currency, taking up 84.9% of all transactions. The euro's share is second at 39.1%, while that of the yen is third at 19.0%. Because two currencies are involved in each transaction, the sum of the percentage shares of individual currencies totals 200% instead of 100%.
5.2. Timing of various markets:
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HARVEST FUTURES CONSULTANTS. Summer

TIME ZONE Sydney Sydney Close Tokyo Tokyo Close London London Close New New York Close York Open Open Open Open 6:00 3:00 AM 7:00 4:00 AM 3:00 12:00 PM 8:00 5:00 PM AM AM PM EDT PM GMT 10:00 7:00 AM 11:00 8:00 AM 7:00 4:00 PM 12:00 9:00 PM PM AM PM PM
Winter Zone Sydney Sydney Close Tokyo Tokyo Close London London Close New New York Close York Open Open Open T ITIME ZONE Open EST 4:00 1:00 AM 6:00 3:00 AM 3:00 12:00 PM 8:00 5:00 PM AM AM PM PM GMT 9:00 6:00 AM 11:00 8:00 AM 8:00 5:00 PM 1:00 10:00 PM PM AM PM PM
The foreign exchange market operates 24 hours a day, and, unlike the stock market, have no official openings or closings. It moves in response to geopolitical events, press releases from key central banks, and reports on the economy from government statistical bureaus, among many other factors. When traders are inactive in one part of the world due to nightfall, there are traders elsewhere who are actively engaging in trades as it is daytime in their locations.
5.3. How Trading Works

Currencies are always quoted in pairs, such as GBP/USD or USD/JPY. The reason they are quoted in pairs is because in every foreign exchange transaction, this is simultaneously buying
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HARVEST FUTURES CONSULTANTS. one currency and selling another. Here is an example of a foreign exchange rate for the British pound versus the U.S. dollar:
The first listed currency to the left of the slash ("/") is known as the base currency (in this example, the British pound), while the second one on the right is called the counter or quote currency (in this example, the U.S. dollar). When buying, the exchange rate tells how much has to pay in units of the quote currency to buy one unit of the base currency. In the example above 1.51258 U.S. dollars has to pay to buy 1 British pound. When selling, the exchange rate will tell how many units of the quote currency available for selling one unit of the base currency. In the example above, to sell 1 British pound, 1.51258 U.S. dollars are required. The base currency is the "basis" for the buy or the sell. In the pair EUR/USD buying this pair means, buying the base currency and simultaneously selling the quote currency i.e. "buy EUR, sell USD." While buying the pair the trader has believed that EURO will appreciate and USD will depreciate.
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Going Long or Short

A long position is a situation in which one purchases a currency pair at a certain price and hopes to sell it later at a higher price. This is also referred to as the notion of "buy low, sell high" in other trading markets. In Forex, when one currency in a pair is rising in value, the other currency is declining, and vice versa. If a trader thinks a currency pair will fall he will sell it and hope to buy it back later at a lower price. This is considered a short position, which is the opposite of a long position.
On every exchange, a trader has a long position on one currency of the pair and a short position on the other currency. A trader defines his or her position as an expression of the first currency of the traded pair. The first currency in a pair is known as the base currency. The second currency in the pair is called the counter currency. When a trader buys the base currency he or she takes a long position on a pair, if a trader sells the base currency he or she shorts the pair.
5.4. How to Read a Forex Chart
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The Trader would select the specific currency pair (example like, the Euro versus the Dollar and the desired time period or timeframe for each bar of the FX Chart. The example below shows a snapshot of a real time one day candlestick Chart of the Euro versus the U.S The Forex Chart shows a strong day move to the upside in the Euro versus the dollar, from a high of 1.3368 (bar on 23rd February 2012) to 1.3456 on the 24th February 2012). This is a difference of 0.0088 or 88 pips (in Forex trading, a "pip" is the smallest tick in the price of a currency, which is similar to a "tick" in Stocks). In dollars, this move is equivalent to an amount of US$ 880 per lot for a standard lot
5.5. Margin and Leverage
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HARVEST FUTURES CONSULTANTS. 5.5.1. Margin The real meaning of margin is actually good faith deposit.
a.Initial Margin The amount of money required to open a trading account.
b.Required Margin The amount of money required to trade one particular instrument. For example, GBPUSD, required margin is US$1000. It means that you need to have more than US$1000 in your trading account to initiate a trade.
c.Call Margin. If the trader has a losing position with a floating loss, then broker might issue a call margin on trader account. A call margin is an amount of money required to maintain traders losing position. If the call margin is not fulfilled, the losing position might suffer an automatic liquidation.
5.5.2. Leverage. The phenomenon of moving a larger object with lesser effort with the use of fulcrum is known as leverage.
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HARVEST FUTURES CONSULTANTS. Trading futures allows the use of smaller amount of money to trade a bigger amount by giving a leverage of 100:1. The actual amount of money per forex contract is US$100,000.00. But, by using leverage, you need only US1, 000.00 margin to trade 1 forex contract.
5.6. Meaning of a pip. The unit of measurement to express the change in value between two currencies is called a "Pip". If EUR/USD moves from 1.2250 to 1.2251, that is ONE PIP. A pip is the last decimal place of a quotation, given that four decimal places are used for pairs without the Japanese yen. If a pair does include the Japanese yen, then the currency quote goes out two decimal places
5.7. Bid price, Ask price and the Spread A bid price is the rate at which the market is prepared to buy a specific currency pair in the Forex trading market. This is the price that a trader will receive when selling (shorting) a currency pair. An ask price is the rate at which the market is ready to sell a particular currency pair. This is the price that a trader will have to pay in order to buy (long) the currency pair. The bid/ask combination comprises a quotation, which is based on a floating exchange rate. The disparity between the bid and ask is known as the spread, which reflects the difference between the rate offered by a market maker such as CMS to sell a currency pair and the rate at which the market maker will buy the pair. The value of the spread is greater for currencies that are traded less frequently on the market than for the cluster of the major trading currencies. Contrary to stock market firms, Forex market makers generally do not charge a commission for every transaction, and instead obtain their compensation from the spread.
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On the EUR/USD quote above, the bid price is 1.3456 and the ask price is 1.3459. If trader wants to sell EUR, he has to click "Sell" and he will sell EUR at 1.3456. If he wants to buy EUR, he has to click "Buy" and you will buy euro at 1.3459.
5.8. Aspects of Trading:

Most trades on the forex market are a result of traders speculating on price movements. Although good instincts and speculatory skills are invaluable to any trader, there are also other, more scientific indicators that traders use to decide whether they will buy or sell a certain currency. These are found by fundamental technical and sentimental analysis. A trader may utilize both technical and fundamental analysis before making any forex trades.
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5.9. Market Analysis
5.9.1. FUNDAMENTAL ANALYSIS. According to this method, the analysis of economic indicators, social factors and government policy of a business cycle can forecast price movement and trends of the market. The fundamentals of any country, multinational industry, or trading bloc lie in the combination of factors like social, political, and economic influences. However, it is rather hard to stay aside from all these variable factors. Therefore, the sphere of complicated and subtle market fundamental lets the explorer know and understand more details of a dynamic global market during the analyzing. It is possible to predict the conditions of the economy but unlikely the market prices by using the fundamental analysis. The trader should have a certain plan of action concerning the ways of using the information as entry and exit spots in a certain strategy of trading. Forex fundamental
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HARVEST FUTURES CONSULTANTS. analysis is a fundamental strategy of trading widely used by online trader of forex. This strategy contains some estimation where the different basic criteria, except for the price movement, are taken into consideration during currency trading. The economic conditions in the currency native country along with a number of other factors are the obligatory elements of these criteria. Any fundamental part of the economy is included into the fundamental analysis. A decent forex fundamental analysis includes a number of macroeconomic factors like economic growth rates, interest rates, inflation, unemployment level and others. The market supply and demand coming from political and social powers is the aim of fundamental analysis. The market supply and demand balance forms the currencies prices. The interest rates and the overall economy strength are the two key factors that influence the supply-demand balance. The overall health of the economy can be understood through a number of economic indicators like GDP. The frequent inability of online forex fundamental analyses to find the entry and exit points is forex fundamental analysis key problem. Due to this factor, the risk control, especially provided with the leverage, gets quite complicated. Only a piece of an enormous amount of information coming every day is considerable. The interest rates and international trade are the factors analyzed the most carefully. In order to create the forex trading strategy fundamentalist traders create models. The empirical data is gathered in these models for further forecasting the possible price trends and market behavior basing on the key economic indicators. Sometimes it happens that two analysts possessing the same data come to different conclusions about the market behavior. Still you should research the fundamental data and find out their best fitting to the style of trading and expectations before getting down to any analysis. Any data making the country tick is considered as fundamental by forex traders. The fundamentals are the combination of certain plans, unpredictable behaviors, and unforeseen events found out from the factors like interest rates and the policy of central bank and even natural disasters. That is why it is better to be aware of the affective contributors of all these factors than to all the fundamentals listed.
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Fundamental elements of the economy: 1. The Basic Concept The economy will be affected by the investment performance. The expected returns may change due to inflation or deflation influence. That is why it is important to take the economy trends into consideration, while planning the strategies of investment. A. Business Cycle The activity of the economy is generally shown by the business cycle. The business cycle consists of four stages: recovery (also known as expansion), peak, contraction (also called recession), and trough.
The growth of business activity, the increase of demand and production, as well as the expansion of employment can be seen. The interest rates generally rise during this phase due to money borrowing by businesses and consumers for their expansion. B. Inflation At the moment of business cycle peak the amount of goods on demand gets higher than the one offer, which is followed by the price increase and inflation. At the inflationary environment, the amount of money offered for the goods is too high and it makes the conditions for the prices to rise. This lowers the customer's ability for purchasing.
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HARVEST FUTURES CONSULTANTS. The demand declines lowering the economic activity due to the prices increase. The recessionary phase follows this process. C. Deflation During deflation the economical activity lowers making the employers fire the workers and lowering the demand. This is generally followed by the prices lowering that turn into deflation. The trough phase comes after that. Deflation is characterized as a process of strong and prolonged prices reduction. The following demand rise is caused by low prices. It creates the conditions for the economy to come into the expansion phase. 2. Gross National Product (GNP) Gross National Product is one of the key indicators of the economic activity. All the services provided and the goods produced within the US economy form the GNP. There are 4 components included in the GNP. They are consumer spending, government spending, investments, and net exports. Gross National Product adjusted for inflation (Real GNP) being in decline during two successive quarters is a sign of recession.
3. Indicators of the Business Cycle There are three types of indicators describing the economy movements during its entering into a certain phase of the business cycle. The ones generally used by the economists are leading, coincident, and lagging indicators. 4. The business cycle's effect in Forex Forex market There are three types of indicators describing the economy movements during its entering into a certain phase of the business cycle. The ones generally used by the economists are leading, coincident, and lagging indicators.
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HARVEST FUTURES CONSULTANTS. The US dollar movements in the Forex market are usually trending the opposite direction to the interest rates. For instance, the increase of incomes caused by the interest rates uptrend declines the US dollar index accordingly. 5. Monetary Policy The control of money and credit supply within the economy is the general aim on the monetary policy. The interest rates are affected by these processes, which cause the economic activity decline. The monetary policy is mainly interested in the inflation control. 6. The activity of the Federal Reserve System (FRS) The US monetary policy is directed by the Federal Reserve System. The nation's central bank is the Federal Reserve System. It was established in 1913 by the Act of Congress and created 12 Federal Reserve districts within the country. The Federal Reserve Board of Governors located in Washington D.C. is responsible for district banks activity coordination. The seven members of the board are appointed by the President and the nominees require the confirmation of the Senate later.
5.9.2. TECHNICAL ANALYSIS:

Traders have a second tool to use in trading. Technical analysis, which has become extremely popular in the last two decades, consists of using charts, trend lines, support and resistance levels, technical indicators, and pattern identification to study the market's behavior. Traders use these technical factors to identify buying and selling opportunities. Over long historical periods, currency behavior has produced trends and patterns that are identifiable. Technical analysis is a method used by currency traders to predict price movements and future market trends by studying what has occurred in the past using charts. Technical analysis is concerned with what has actually happened in the market, rather than what should happen, and takes into account the price of instruments and the volume of trading, and creates charts from that data as a primary tool. One major advantage of technical analysis is that experienced analysts can follow many markets and market instruments simultaneously.
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HARVEST FUTURES CONSULTANTS. Technical analysis is built on three essential principles:
1. Market action discounts everything! This means that the actual price is a reflection of everything that is known to the market that could affect it. Some of these factors are: fundamentals (inflation, interest rates, etc.), supply and demand, political factors and market sentiment. However, the pure technical analyst is only concerned with price movements, not with the reasons for any changes.
2. Prices move in trends. Technical analysis is used to identify patterns of market behavior that have long been recognized as significant. For many given patterns there is a high probability that they will produce the expected results. There are also recognized patterns that repeat themselves on a consistent basis. 3. History repeats itself. Forex chart patterns have been recognized and categorized for over 100 years, and the manner in which many patterns are repeated leads to the conclusion that human psychology changes little over time. Since patterns have worked well in the past, it is assumed that they will continue to work well into the future.
Candlesticks Charts
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HARVEST FUTURES CONSULTANTS. Candlestick charts have been developed in the 18th century by Munehisa Homma, Japanese rice trader of financial instruments and they were introduced to the Western world by Steve Nison in his book, "Japanese Candlestick Charting Techniques. Candlesticks are usually composed of the body (black or white), and an upper and a lower shadow (wick): the area between the open and the close is called the real body, price excursions above and below the real body are called shadows. The wick illustrates the highest and lowest traded prices of a currency during the time interval represented. The body illustrates the opening and closing trades. If the currency price closed higher than it opened, the body is white or unfilled (bullish), with the opening price at the bottom of the body and the closing price at the top. If the currency price closed lower than it opened, the body is black (bearish), with the opening price at the top and the closing price at the bottom. A candlestick need not have either a body or a wick.
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HARVEST FUTURES CONSULTANTS. Here is an example of a candlestick chart for GBP/USD.
The purpose of candlestick charting is strictly to serve as a visual aid. Candlestick charts have various advantages like: Candlesticks are easy to interpret, and are a good place for beginners to start figuring out chart analysis. Candlesticks are easy to use. Candlesticks studying may help trading well. Candlesticks and candlestick patterns have cool names such as the shooting star, which helps you to remember what the pattern means. Candlesticks are good at identifying marketing turning points - reversals from an uptrend to a downtrend or a downtrend to an uptrend.
Technical analysis of candlestick patterns. Japanese candlesticks cheat sheet.

From the single, dual, and triple candlestick formations the trader can easily identify what kind of pattern candlestick he is looking while whenever you are trading.
Number of Bars
Name Spinning Top
Bullish or Bearish? Neutral
What It Looks Like?
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HARVEST FUTURES CONSULTANTS. Doji White Marubozu Black Marubozu Single Hammer Hanging Man Bullish Bearish Neutral Bullish Bearish
Inverted Hammer Shooting Star
Bullish Bearish
Number of Bars
Name Bullish Engulfing Bearish Engulfing
Bullish or Bearish? Bullish Bearish
What it Looks Like?
Double
Tweezer Tops
Bearish
Tweezer Bottoms Morning Star
Bullish Bullish
Evening Star
Bearish
Three White Soldiers Triple
Bullish
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HARVEST FUTURES CONSULTANTS. Three Black Crows Bearish
Three Inside Up
Bullish
Three Inside Down
Bearish
Support and Resistance Support and resistance is one of the most widely used concepts in trading. Strangely enough, everyone seems to have their own idea on measuring of support and resistance.
From the diagram above diagram we can see that, the zigzag pattern is making its way up (bull market). When the market moves up and then pulls back, the highest point reached before it pulled back is now resistance. As the market continues up again, the lowest point reached before it started back is now support. In this way resistance and support are continually formed as the market oscillates over time. The reverse is true for the downtrend.
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HARVEST FUTURES CONSULTANTS. Plotting Support and Resistance One thing to remember is that support and resistance levels are not exact numbers. Often time trader can see a support or resistance level that appears broken, but soon after find out that the market was just testing it. With candlestick charts, these "tests" of support and resistance are usually represented by the candlestick shadows.
Notice how the shadows of the candles tested the 1.4700 support level. At those times it seemed like the market was "breaking" support. In hindsight we can see that the market was merely testing that level. The various levels of support and resistance:
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Support and resistance are levels where the price will potentially stall and even sometimes reverse. Fibonacci retrenchment Traders use the Fibonacci retracement levels as potential support and resistance. Since plenty of traders watch these same levels and place buy and sell orders on them to enter trades or place stops, the support and resistance levels may become a self-fulfilling prophecy.
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HARVEST FUTURES CONSULTANTS. They key Fibonacci extension levels are the 23.6, 38.2%, 50.0%, 61.8%, 100%, 138.2% and 161.8%.
Traders use the Fibonacci extension levels as potential support and resistance areas to set profit targets. Again, since so many traders are watching these levels and placing buy and sell orders to take profits, this tool tends to work due self-fulfilling expectations. In order to apply Fibonacci levels to charts, trader needs to identify Swing High and Swing Low points. A Swing High is a candlestick with at least two lower highs on both the left and right of itself. A Swing Low is a candlestick with at least two higher lows on both the left and right of itself. Because many traders use the Fibonacci tool, those levels tend to become self-fulfilling support and resistance levels or areas of interest.
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HARVEST FUTURES CONSULTANTS. When using the Fibonacci tool, probability of success could increase when using the Fib tool with other support and resistance levels, trend lines, and candlestick patterns for spotting entry and stop loss points.
Moving Averages A moving average is simply a way to smooth out price action over time. By "moving average", it is mean of average closing price of a currency pair for the last 'X' number of periods. The simple moving average of 14 days period can be shown as below.
A moving average indicator is used to help us forecast future prices. By looking at the slope of the moving average, trader can determine the potential direction of market prices. Moving averages smooth out price action.
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HARVEST FUTURES CONSULTANTS. There are different types of moving averages and each of them has their own level of "smoothness". Generally, the smoother the moving average, the slower it is to react to the price movement.
Calculation: Simple Moving Average (SMA) Simple, in other words, arithmetical moving average is calculated by summing up the prices of instrument closure over a certain number of single periods (for instance, 12 hours). This value is then divided by the number of such periods.
SMA = SUM (CLOSE, N)/N
Where: N is the number of calculation periods.
Bollinger Bands
Bollinger bands are used to measure a market's volatility. Basically, this little tool tells us whether the market is quiet or whether the market is LOUD! When the market is quiet, the bands contract and when the market is LOUD, the bands expand.
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HARVEST FUTURES CONSULTANTS. Notice on the chart below that when price is quiet, the bands are close together. When price moves up, the bands spread apart.
The Bollinger Bounce One thing the trader should know about Bollinger bands is that price tends to return to the middle of the bands. That is the whole idea behind the Bollinger bounce. By looking at the chart below we can tell by next period market will fall as upper Bollinger band acting as a resistance.
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As per the trader predictions now market price settled back down towards the middle area of the bands. This shows the Bollinger bands act as resistance. Similarly lower band will act as support.
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This is a classic Bollinger bounce. The reason these bounces occur is because Bollinger bands act like dynamic support and resistance levels. The longer the time frame you are in, the stronger these bands tend to be. Many traders have developed systems that thrive on these bounces and this strategy is best used when the market is ranging and there is no clear trend
Calculation:
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HARVEST FUTURES CONSULTANTS. Bollinger bands are formed by three lines. The middle line (ML) is a usual Moving Average. ML = SUM [CLOSE, N]/N The top line, TL, is the same as the middle line a certain number of standard deviations (D) higher than the ML. TL = ML + (D*StdDev) The bottom line (BL) is the middle line shifted down by the same number of standard deviations. BL = ML (D*StdDev) Where: N is the number of periods used in calculation; SMA Simple Moving Average; StdDev means Standard Deviation. StdDev = SQRT (SUM [(CLOSE SMA (CLOSE, N)) ^2, N]/N)
Stochastic Oscillator The Stochastic Oscillator Technical Indicator compares where a securitys price closed relative to its price range over a given time period. The Stochastic Oscillator is displayed as two lines. The main line is called %K. The second line, called %D, is a Moving Average of %K. The %K line is usually displayed as a solid line and the %D line is usually displayed as a dotted line. There are several ways to interpret a Stochastic Oscillator. Three popular methods include:
Buy when the Oscillator (either %K or %D) falls below a specific level (e.g., 20) and then rises above that level. Sell when the Oscillator rises above a specific level (e.g., 80) and then falls below that level;
Buy when the %K line rises above the %D line and sell when the %K line falls below the %D line;
Look for divergences. For instance: where prices are making a series of new highs and the Stochastic Oscillator is failing to surpass its previous highs.
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Calculation: The Stochastic Oscillator has four variables:

%K periods. This is the number of time periods used in the stochastic calculation; %K Slowing Periods. This value controls the internal smoothing of %K. A value of 1 is considered a fast stochastic; a value of 3 is considered a slow stochastic;
%D periods. his is the number of time periods used when calculating a moving average of %K;
%D method. The method (i.e., Exponential, Simple, Smoothed, or Weighted) that is used to calculate %D.
The formula for %K is: %K = (CLOSE-LOW (%K))/(HIGH(%K)-LOW(%K))*100 Where: CLOSE is todays closing price; LOW(%K) is the lowest low in %K periods; HIGH(%K) is the highest high in %K periods. The %D moving average is calculated according to the formula:
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HARVEST FUTURES CONSULTANTS. %D = SMA (%K, N) Where: N is the smoothing period; SMA is the Simple Moving Average.
Pivot Points Support and Resistance Lines (PP)

Pivot Points Support and Resistance Lines, PP indicate the average price and potential lines of support and resistance in a certain time space. We get current values of the indicator from data received at the previous period. Very often PP is based on day, week and month periods. The plot period must differ from the indicator period by one time at least. Otherwise, if they coincide, the indicator line will look like a dot and will carry no information. For example, if a PP indicator is laid on a day plot, then by each trade day bar you will see dots instead of lines. And if the indicator period is less than the plot period, you will not see the values at all. When you analyze the market situation, it is recommended to use several PP indicators based on week, month and year periods. If two or more levels coincide, they intensity each other. Before taking a long or a short position, you should wait until the price crosses all coinciding levels. Before this, you should not open any positions. Support and resistance levels, received with the help of the indicator, allow predicting possible levels of Stop Loss and Take Profit with high precision. The following rules are also just:
If the PP is next to the opening price of the current bar, the probability of getting profit is higher;
On a growing market, when a price drops below the central axis, you should not open a short position immediately as a side trend as possible. Most probably, the price will retest the level. If the market will not be able to overcome, the turning point, we may speak about a market turn. This thesis is right for the "bear" trend.
To hold long-term trade, you must know the location of week, month and year timeframe central axis. It is obvious that if the price is lower than those turn lines, we may speak about a strong
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HARVEST FUTURES CONSULTANTS. descending trend. On the other hand, if the price is higher than the week, month and year central axes, it is a glaring example of a bullish trend.
Calculation:
PP = (HIGH + LOW + CLOSE) / 3
R1 = 2 * PP - LOW
R2 = PP + HIGH - LOW
R3 = 2 * PP + HIGH - 2 * LOW
S1 = 2 * PP - HIGH
S2 = PP + LOW - HIGH
S3 = 2 * PP + LOW - 2 * HIGH
Where: PP the central axis (any price can perform as it); R1, R2, R3 the 1st, 2nd and 3rd levels of resistance; S1, S2, S3 the 1st, 2nd and 3rd levels of support; HIGH the max price in the previous period of the indicator; LOW the min price in the previous period of indicator; CLOSE the closing price in the previous period of indicator.
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5b.RISK MANAGEMENT IN CURRENCY TRADING. 5b.1. Steps in the risk management:

1. Establish context 2. Identify the risks 3. Analyse and evaluation of risks 4. Treatment of risks
1. Establish context: Risk management is done in order to minimize the adverse effects of potential losses at least possible cost. Managing of risk depends upon his needs and perception. Foreign market plays an important role in economy of any country and risk is managed by different strategies in foreign market to maximize profit in long run and give a boost to economy.
2. Risks involved in currency trading Forex Currency trading is quite a lucrative option to gain huge profits but there are risks involved too, which a trader needs to understand well before jumping into forex trading. While trading in forex, investors come across various types of risks in foreign exchange trading. The five main types of risks involved in foreign exchange trading are defined below. Exchange Rate Risk Interest Rate Risk Credit Risk Country Risk Operational risk
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3. Analyzing and evaluating the risks
a.Exchange Rate Risk: The value at which the currency is traded is the exchange rate. It is always defined in terms of another currency. The forex trade shows how much one currency is worth in terms of the other. The trader has to deal with risk when the price changes suddenly. This commonly happens as a result of changes in demand for one of the currencies. Changes in demand are often caused by changes in basic economic events such as taxations, employment rate and other factors. Political volatility can change the forex rate considerably in a few seconds A position is a subject of all the price changes as long as it is outstanding. In order to cut short these exchange rate risks and to have profitable positions, the trading should be done within manageable limits. The common steps are the position limit and the loss limit. The limits are a function of the policy of the banks along with the skills of the traders and their specific areas of expertise. There are two types of position limits daylight and overnight. The daylight position limit establishes the maximum amount of a certain currency which a trader is allowed to carry at any single time during. The limit should reflect both the trader's level of trading skills and the amount at which a trader peaks. Whereas, the overnight position limit which should be smaller than daylight limits refers to any outstanding position kept overnight by traders. te position and loss limits can now be implemented more conveniently with the help of computerized systems which enable the treasurer and the chief trader to have continuous, instantaneous, and comprehensive access to accurate figures for all the positions and the profit and loss.
b. Interest Rate Risk: The interest rate risks in foreign exchange trading are related to the currency swaps, futures, forward out rights and options in foreign currency exchange trading. The interest rate risks are those foreign exchange trading risks which refer to the profit and loss generated by both the fluctuations occurred in the forward spreads and by forward amount mismatches and maturity gaps among various transactions in the forex book. The mismatch amount is the difference between the spot and the forward amounts. On a daily basis, traders balance the net payments
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HARVEST FUTURES CONSULTANTS. and receipts for each currency through a special type of swap, called tomorrow or rollover. Limits of the total size of mismatches are set up by the management to minimize interest rate risks in forex trading. However, different banks have different policies to cut back the losses. However, the most common approach is to separate the mismatches, based on their maturity dates, into up to six months and past six months. Then all the transactions are put into computerized systems to calculate the positions for all the delivery dates and the profit and loss. There is a continuous analysis of the interest rate environment necessary to forecast any changes that may affect the outstanding gaps.
c. Credit Risk: Other kinds of risks involved in foreign exchange trading are credit risks. These are associated with the probability that an outstanding currency position might not be repaid as agreed upon because of a voluntary or involuntary action by the other party. In such a case, the forex trading occurs on regulated exchanges, where all trades are settled by the learning house. In these types of forex exchanges, the investors of all sizes can deal without any credit concern. The following forms of credit risk are known. There are two types of credit risks in foreign exchange trading, the Replacement risk and the settlement risk.
d. Country Risk: The country risks in forex trading are arise in case of there are a party is unable to receive an expected amount of payment because of the government interference in the matters of insolvency of an individual bank or institution. The country foreign exchange trading risks are linked to the interference of government in forex markets. It falls under the joint responsibility of the treasurer and the credit department. The government control on foreign exchange activities is still present and implemented actively. For the investors, it is important to know or how to be able to anticipate any restrictive changes concerning the free flow of currencies
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HARVEST FUTURES CONSULTANTS. e. Operational Risk This type of risk comes from companys business functions. It is a wide-ranging type of risk. It comes from the risk related to people, processes and systems through which the company works. There are also other risks involved in forex trading. Here I consider these ones to be the most important for highlighting. Electronic trading with customers forex trading activity is mainly focused on remote electronic workstations. It demands more attention regarding specific precautions as for system access and passwords. Off-site Trading Forex trading takes place on an hourly basis. Mis-trades This can happen for many various reasons. Disputes Commonly there are many misunderstandings between brokers and traders. Due to troubles in the world economy Foreign Exchange market is a very popular way of making money. Those who are looking for effective strategy might be interested but unmanaged. But please make sure to read about scams before dealing with forex trading.
4.Treatment of risks in forex:

5b.4.Risk management tools
Both new and experienced traders make good and bad trades over a long period of time. The difference between them is that the more experienced trader has a grasp of the importance of risk management as an integral part of a successful Forex trading strategy. Proper risk management can maximize the positive and minimize the negative aspects of the regular ups and downs of trading. In addition to basic limit and stop orders, Forex offers a range of risk management tools that can give trader an edge over the market. a. Limit and stop orders When placing a market order, many experienced traders already know the levels at which they will want to exit the trade. The 24 hour nature of the Forex market makes it difficult for a trader to make timely trading decisions. This is even more important since large market moves may happen while trader is away.
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b. Trader's Guardian Trader's Guardian provides a number of tools to help analyze and assess traders risk exposure in the market. The Margin Use Level(s) feature displays your used and usable account margin for each account on bar graphs. To help prevent trader from falling below trader usable margin, a Warning Level is displayed at all times. Keep track of traders exposure in opened positions as well as his exposure in different currencies, with the Instruments Exposure and Currency Portfolio tools.
c. Trailing stop trading system This feature is an invaluable way to simplify traders trading and help protect traders positions. The trailing stop works like a regular stop order that moves up or down if your original position is moving in a favorable direction, while not moving if your position is moving in an unfavorable direction. If trader has a long position, for example, and set up a trailing stop, it will move up as the position's price rises. When the price begins to fall, the trailing stop stays in place until it is triggered. It is up to you, the trader, to set the number of pips the stop will trail the market price. The trailing stop trading system helps clients lock in potential profits while controlling for possible market reversals.
d. Trader's Range The Trader's Range feature is a handy way to minimize the costs associated with missing an entry or exit on a position, during an extremely fast moving market. Traders Range lets a trader choose a certain amount of pips in either direction from the current market price that he or she is willing to accept. Utilizing Trader's Range takes the place of entering an order, getting re-quoted and then having to manually accept a new price. Proper use of Traders Range eliminates the hassle of approving a re-quote when trying to enter orders and helps traders orders get filled even in volatile markets.
e. Bundled Entry Orders
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HARVEST FUTURES CONSULTANTS. Bundled entry orders allow a user to set limits and stops for the pending position when creating a new entry order. This ensures that even if the order is executed while trader is away from the computer, the order is completely covered by associated limits and stops. If your position reaches your desired profit target, the limit order will close your trade with a profit. If the trade goes against, the stop order will close out position at preset level, limiting losses. Once a bundled Entry order is placed it does not require any direct supervision, as its execution and the levels at which it will close have already been predefined by the trader.
f. Forex Autopilot The Forex Autopilot technology helps users design and run automated Forex trading systems. The Autopilot effectively automates clients trading strategies by allowing them to setup Forex trading systems and automatically generating trades based on these systems. Trading systems can operate on countless of factors such as market conditions and multiple technical indicators. Forex Autopilot not only generates signals based on traders custom trading systems but can also be set to automatically create orders and execute trades whenever a buy or sell signal is generated. Forex Autopilot also allows you to verify the effectiveness of trading strategies by visually back testing trading systems on historical chart data. By default VT Trader includes a number of automated tradin g systems. Though fully functional these systems are provided as samples and are by no means to be considered trading recommendations. Nevertheless these Forex trading systems can provide buy and sell signals as well as generate orders. These systems can be used to help guide trader in creating his own personalized trading system. trader can either adjust the included systems and use them as a basis for his automated trading systems or easily develop new trading systems from scratch. Forex Autopilot's intuitive Trading System Builder allows clients to easily create and configure new systems. Once a trading system is configured, VT Trader will automatically open and close positions at specified parameters. These parameters can include price levels, moving average crossovers, and even technical indicator levels. When certain conditions are met, as defined by the user in his or her trading system, orders are triggered. Forex Autopilot will manage your account even while trader is away as long as VT Trader is running. This way, the
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HARVEST FUTURES CONSULTANTS. trader can implement his Forex trading strategies without having a watch on the market all day long.
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CHAPTER.6 OBSERVATUONS AND FINDINGS

How to avoid typical pitfalls and start making more money in forex trading 1. Trade pairs, not currencies. - Like any relationship, the trade has to know both sides. Successful or failure in forex trading depends upon being right about the both currencies and
how they impact one another, not just one. 2. Knowledge is power when starting out trading forex online, it is essential that the trader understand the basis of this market, if he want to make the most of his money. 3. Independence if trader is new to market, trader will either decide to trade his own money or give his money to broker to trade it behalf of him. 4. Tiny margins Margin trading is one of the biggest advantages in trading forex as it allows trader to trade amounts for larger than the total of his deposits. However, it can also be dangerous to novice traders as it can appeal to the greed factor that destroys many forex traders. The best guideline is to increase leverage in line with experience and success. 5. No strategy The aim of making money is not a trading strategy. A strategy traders map for how he plans to make money. Trader strategy details the approach he is going to take, which currencies he is going to trade and how he will manage risk. Without a strategy, he may become one of the 90% of new traders that lose their money. 6. The only way is up/down - when the market is on its way up, the market is on its way up. When the market is going down, the market is going down. Thats it. There are many systems which analyses past trends, but none that can accurately predict the future. But if the trader acknowledges himself that all that is happening at any time is that market is simply moving. Trader will be amazed at how hard it is to blame anyone else. 7. Trade on the news most of the really big market moves occur around news time. Trading volume is high and moves are significant. This means there is no better time to trade than when
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HARVEST FUTURES CONSULTANTS. news is released. This is when the big players adjust their positions and prices change resulting in a serious currency flow. 8. Exiting trades if the trader places a trade and it is not working for him, he has to get out. There is no use of staying in trade and hoping for reversal. If the trader is in a winning trade, he should not talk himself out of his position because he is bored or want to take stress: stress is a natural part of trading; he gets used to it. 9. Dont trade too short-term if you are aiming to make less than 20 points profit, dont undertake the trade. The spread, the trader is trading on will make the odds against trader far too high. 10. Dont be smart the most successful traders I know keep their trading simple. They dont analyse all day or research historical trends and track web logs and their results are excellent. 11. Ignoring technicals understanding whether the market is over extended long or short is a key indicator of price action. Spikes occur in market when it is moving all one way. 12. Emotional trading without that all important strategy, the trader trades essentially are thoughts only and thoughts are emotions and a very poor foundation for trading. When the traders are upset and emotional, the trader doesnt tend to make the wisest decisions. So the trader should sway away is emotions. 13. Confidence confidence comes from successful trading. If trader lose money early in stage of his trading career its very difficult to regain it; the trick is not to go off half cooked; the trader has to learn the business before he stat trading and he should always remember that knowledge is power.
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RECOMMENDATIONS/ SUGGESTIONS 1. Trade defensively: The best offense is a good defense. The trader has to be thinking what he could can lose as opposed to what he could gain. 2. Adhere to own trading strategy: Every trader needs a clear personal trading strategy. An important part of traders trading plan is to set a limit on what trader willing to lose. Set stop losses based on that limit. Stick to own trading plan and avoid impulse trades. If the trader did not understand what the market is doing or if the traders emotional equilibrium is severely disturbed, then he has to close out all his positions and take a break. Trader should not trade on market rumors or tips, trade based on his strategy. 3. Controlling emotions: Recognize that all traders sometimes experience high levels of stress and suffer losses from time to time. Anxiety, frustration, depression and at times desperation, are all part of the trading game. Trader has to stay focused on what he is doing. Trading is should be on the basis of informed, rational, decisions, not emotions and wishful thinking. 4. Isolation of trading from the desired profits: The trader should not hope for a move so much that his trade is based on HOPE. Although hope is a great virtue in other area of life, It can be great hindrance to a trader. 5. The trader should not form new opinions during trading hours: The trader has to decide on a basic course of action, should not let the ups and downs during the day upset his trading.
6. The trader has to take a trading break: One successful trader commented. When I fall to 90% of mental efficiency, I began to break even. Anything below that I begin to lose. Trading is hard work and it is often very smart to quit while trader is ahead and give himself a small vacation. Most traders dont do this for themselves and they burn out.
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HARVEST FUTURES CONSULTANTS. 7. Avoiding trading of too many currencies at once: Once the account grows to a sizable amount, the trader will be able to trade many currencies at a time and still be sticking to the rules of money management. This is not always be an best idea. 8. Monitoring a position properly: Moving the stop losses up to insure profit, and cancelling orders that were not filled even on one trading position requires much concentration and mental alertness. 9. Stop losses do their job and protect trader: Dont ever cancel a stop loss to let incur a loss of more than stop order because the trader is hoping the market will turn around. Always let stop losses will be the maximum the trader will lose. 10. Be patient with a position: Not every signal trader will take will immediately take into profit. It sometimes takes several hours or more to be in profit on apposition when day trading and sometimes weeks on a long term trade. When the position is at loss and trader decide to get out, the should not make a 180 degree turn. The trader has to wait for the next good signal in the right direction. 11. Learn to comfortably deal with losses. Traders must learn to accept losses because they are part of business. When trader gain emotional stability to accept a loss without hurting pride or outlook on his trading, he is on his way to becoming a successful trader. 12. Let profit run: Successful traders should never take a profit just for the sake of taking a profit. They have reason to close out a profitable position. It is good to have an approximate profit target in mind. 13. Act promptly: The forex market is not kind to those who procrastinate. Therefore, the rule of thumb is act promptly. This doesnt mean that the trader should be impulsive, and get in trades hastily but if trader see a good signal it is better to place a trade. The key is not to be hasty and not to hesitate, but to find a balance between the two.
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HARVEST FUTURES CONSULTANTS. 14. Know the price trend: Whatever time frame of the market trader is trading in, it is helpful to know the trend. 15. The trader should be honest with himself: If the trader is breaking his own rules of trading or if he is not putting stop losses on correctly or not disciplining himself to have a non-emotional, levelheaded attitude about trading, then trader should be honest with him about the things he could correct so that he can move through those obstacles.
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CONCLUSION:
1. The forex market is flexible; feasible because of it is a 24HR market. 2. It has features like 24 hour liquidity, 100 percent leverage, professional management of funds, higher risk to earn more, availability of many markets, opportunity to earn profits in either direction. 3. The trader has to take risk based upon the size of his investment account and his strategies. Higher the risk, higher is the profits. 4. The trader should study the market carefully and make decisions based on his positions i.e., buy or sell. 5. The trader (other than investor) has to trade safely thinking its his own investment. 6. The trader should not trader during the period of fundamental news. 7. Technicals can judge the market and the trader can catch the trend in a better way.
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HARVEST FUTURES CONSULTANTS.

CHAPTER-5: THEORATICAL BACKDROP OF RATIO ANALYSIS, ANALYSIS & INTERPRETATION

CHAPTER-6: FINDINGS SUGGESTIONS CONCLUSION

CHAPTER-7: ANNEXURE BIBLIOGRAPHY

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HARVEST FUTURES CONSULTANTS. CHAPTER.3

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3.1. Market participants 3.1.1. Banks:

3.1.2. Commercial companies:

3.1.3. Central banks:

3.1.4.Hedge funds as speculators:

3.1.5.Investment management firms

3.1.6. Retail foreign exchange traders:

3.1.7. Non-bank foreign exchange companies:

3.1.8. Money transfer/remittance companies and bureau de changes

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4.2. Nature of business carried:

4.3. VISION AND MISSION: Vision:

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4.4. Service profile:

4.5. Area of operation

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4.6. Ownership pattern:

4.7. CORPORATE INFORMATION

4.8. Infrastructure facilities.

4.9. Achievements and Awards:

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4.9. End to end process:

trading the clients account

following interested investors explaining about currency trading and forex

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4.10. Mc Kenseys 7 S Frame Work

Hard Elements Strategy Structure Systems

Soft Elements Shared Values Skills Style Staff

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HARVEST FUTURES CONSULTANTS. Corporate office Regional office Branches

assistance. Customer satisfaction rather than profit maximization.

4.11. SWOT ANALYSIS OF HARVEST FUTURES CONSULTANTS PVT. LTD.

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4.12. LEARNING EXPERIENCE:

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5a. Trading Operation of the forex market:

5.1. Major Currency Pairs

5.2. Timing of various markets:

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5.3. How Trading Works

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Going Long or Short

5.4. How to Read a Forex Chart

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5.5. Margin and Leverage

a.Initial Margin The amount of money required to open a trading account.

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5.8. Aspects of Trading:

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