The Art of Decision-Making: Navigating Complexity and Uncertainty
10 thingsfx
1. 10 Things You Wanted
To Know About The
Currency Market But
Were Afraid To Ask
www.bkforexadvisors.com
2. *Past performance is not indicative of future
results.
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree
of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully
consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a
loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to
lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent
financial advisor if you have any doubts.
Kathy Lien and Boris Schlossberg are employed as Director of Currency Research for Global Forex Trading, a division of
Global Futures & Forex, Ltd. (GFT). However, BKForex Advisor, which is a company owned and operated by Kathy and
Boris separately and independently from their employment with GFT. GFT does not control the content of the
BKTraderFX.com web site, and opinions expressed by Boris and Kathy on the BKTraderFX.com web site are not necessarily
the opinions of GFT. FX 360® is either a registered trademark or a trademark of Global Futures & Forex, Ltd., in the United
States and/or other countries.
This information should not be relied on as a substitute for extensive independent research before making your investment
decisions. BKForexAdvisor is merely providing this for your general information. The views of this author are not
necessarily those of Global Forex Trading, its owners, officers, agents or other employees. In addition, any projections or
views of the market provided may not prove to be accurate. Global Forex Trading will not be responsible for any losses
incurred on investments made as a result of any information contained in this presentation. Global Forex Trading and
BKForexAdvisor do not render investment, legal, accounting, tax, or other professional advice. If investment, legal, tax, or
other expert assistance is required, the services of a competent professional should be sought.
3. What Makes FX Different
From All Other Markets?
1. FX is Truly 24 Hours/Day
2. FX Spot is Decentralized
3. FX – Pay Spread Not Commission
4. FX – Highly Levered
4. Trade The World
1. FX Trades Continuously From
5PM ET Sunday – 5PM ET Friday
2. Session Hours (in ET)
Asia: 5PM-3AM
Europe: 3AM-12Noon
North America: 8AM-5PM
3. Most Active Time to Trade (ET) 4AM-12PM
5. FX Has No Central
Market
1. Every Dealer Makes Their Own Quotes
2. Markets Are OTC Not Exchange Based
3. There is No Global Best Bid/Best Ask
4. Most Traders Have Several Accounts
6. Pay Spread Not
Commission
1. Spread = Buy at Offer Sell on Bid
2. You Cannot Join Bid or Offer
3. Spreads Are Quoted to 5th Decimal Point
4. Cost of Trade ~ 1-3bp of Notional Value
7. Leverage To The
Max
1. Stocks = 2:1 or 4:1
2. Futures = 10:1
3. FX? 50:1 !!!!!!!!!
4. 2% Move Against You Wipes You Out
16. @Fxflow/Macro-fx
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17. 5 Things That Move The
Currency Market
1. Central Bank Decisions
2. Equity Risk On/Off
3. Political Uncertainty
4. Trade/Capital Flows
5. M&A Activity
18. What are double Bollinger Bands?
20 Period, 2 Standard Deviation
20 Period, 1 Standard Deviation
2 BB = Outer Lines
1 BB = Inner Lines
37. #9 - Why Do We Care About
Central Bank Intervention?
B
38. Why Do We Care About
Central Bank Intervention?
B
39. How Does Central Bank
Intervention Work?
http://cdn.physorg.com/newman/gfx/news/hires/abusinessman.jpg
http://www.artremis.com/article/pics/ubs_trading_floor08.jpg
B
40. How Does Central Bank
Intervention Work?
SELL
Buy
http://a1.twimg.com/profile_images/264728980/jpy_usd.png
B
42. More Yen in Circulation
Yen
=
Money Supply (avail of Yen)
=
Inflation
=
Interest Rates
&
Competitiveness
http://cache.gawkerassets.com/assets/images/17/2010/09/500x_pile-
of-cash.jpg
B
43. 2 Choices for the Central Bank
1) Sterilize the Intervention
- Sell Bonds Domestically > Soak Up the New Cash
Pros
Investor
Paying -Achieves psychological
for shock of intervention
Japanese - Mitigates prior effects
Bonds
Government
Cons
- Rarely Lasts
http://y.e-static.net/file-pic/handing-over-cash/handing-over-cash.jpg
B
44. 2 Choices for the Central Bank
2) Leave Intervention Unsterilized
- No Additional Action to Change Monetary Base
Can Work if Problems are Domestic in Origin and
Monetary in Nature
Japanese
Government
B
51. *Past performance is not indicative of future
results.
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree
of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully
consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a
loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to
lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent
financial advisor if you have any doubts.
Kathy Lien and Boris Schlossberg are employed as Director of Currency Research for Global Forex Trading, a division of
Global Futures & Forex, Ltd. (GFT). However, BKForex Advisor, which is a company owned and operated by Kathy and
Boris separately and independently from their employment with GFT. GFT does not control the content of the
BKTraderFX.com web site, and opinions expressed by Boris and Kathy on the BKTraderFX.com web site are not necessarily
the opinions of GFT. FX 360® is either a registered trademark or a trademark of Global Futures & Forex, Ltd., in the United
States and/or other countries.
This information should not be relied on as a substitute for extensive independent research before making your investment
decisions. BKForexAdvisor is merely providing this for your general information. The views of this author are not
necessarily those of Global Forex Trading, its owners, officers, agents or other employees. In addition, any projections or
views of the market provided may not prove to be accurate. Global Forex Trading will not be responsible for any losses
incurred on investments made as a result of any information contained in this presentation. Global Forex Trading and
BKForexAdvisor do not render investment, legal, accounting, tax, or other professional advice. If investment, legal, tax, or
other expert assistance is required, the services of a competent professional should be sought.
