TECHNICAL & FUNDAMENTAL ANALYSIS IN FOREIGN

CURRENCY EXCHANGE

A REPORT ON

TECHNICAL & FUNDAMENTAL ANALYSIS IN FOREIGN CURRENCY EXCHANGE

BY

ALUMANLA SARIKA REDDY

Enrollment No: 17BSP0281

Training Stock Market Health Insurance

Advisory Services Investment Planning

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TECHNICAL & FUNDAMENTAL ANALYSIS IN FOREIGN
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REPORT ON

“TECHNICAL & FUNDAMENTAL ANALYSIS IN FOREIGN CURRENCY EXCHANGE”

By

ALUMANLA SARIKA REDDY

Enrollment No: 17BSP0281

J wings

A report submitted in partial fulfillment of the requirements of PGPM Program of IBS Bangalore

Distribution list:

• J wings
• S. Ravindra Babu
• IBS library

Date of Submission: 20.05.2018

SUBMITTED TO:

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FACULTY GUIDE COMPANY GUIDE

Mr. S. Ravindra Babu Mr. Megesh. M

ABSTRACT

Foreign exchange market or FOREX is the biggest and the most liquid financial market in the world.
Volatility dominated in this market made it a complicated business for policy makers and consequently
caused investors and speculators to be very cautious in their trading strategies.

The project investigates the reliability of technical analysis and fundamental analysis for forecasting
the accurate price and trend direction in the FOREX market.

In order to carry out the analysis, the research employs some of the common indicators and tools
provided by brokerage companies in the transactional platform of Meta Trader 4. These indicators are
examined together in order to send different types of signals to traders to identify the price reversal
pattern configuration. Technical analysis and fundamental analysis test confirms to be a reliable
instrument for forecasting the market trend.

Spot foreign exchange market today is the most volatile and liquid of all financial markets in the world.

Fundamental analysis proves to be one of the major driving forces for prices. They have huge
volatility.

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AUTHORISATION

This is to certify that “The report submitted as partial fulfillment of the requirement of PGPM program
of IBS Bangalore”.

I hereby declare that the project entitled “TECHNICAL & FUNDAMENTAL ANALYSIS IN
FOREIGN CURRENCY EXCHANGE” is written and submitted by me under the guidance of Prof Mr.
S. Ravindra Babu (IBS Bangalore) and Mr. Megesh (Manager at JWINGS) during the academic year
2018-19.

I authorize that this project is the result of my effort and has not been submitted to any other university
or institution for the award of any degree or personal favor whatsoever.

Details and analysis provided in the report hold true to the best of my knowledge.

Thanking you,
A. Sarika Reddy

DATE: 20-05-2018

PLACE: Bangalore

SUBMITTED TO:
FACULTY GUIDE COMPANY GUIDE

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ACKNOWLEDGEMENT

This is to acknowledge the persons who gave me their valuable guidance and support in completing this
report successfully and shared their innovative ideas with me to enhance my internship.

First and foremost I am thankful to my company guide “Mr. Megesh. G Manager at JWINGS” for
giving me such an opportunity to experience corporate exposure.

I would like to mention the unconditional and spontaneous help put forth by Mr. Gopal Krishna (Fund
manager & Trainer)

I also like to express my gratitude to my faculty guide “Professor, of IBS Bangalore Mr. S. Ravindra
Babu” for his support and guidance which is one of the best inputs for me in successful completion of
this project.

I would also like to thank all my friends and colleagues who supported me.

Thanking you,
A.SarikaReddy

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TABLE OF CONTENTS

Abstract ……………………………….…… 03
Authorization ……………………………… 04
Acknowledgement …………………………..... 05
Executive Summary ……………………………. 07
Introduction to markets ……………………………… 08-09
About the company ………………..... 10-12
Objectives, Methodology, Limitations ….………………........... 13
EIC - Analysis … …………..... 14-15
Industry – Analysis ……….....………..... 15 - 16
Pestel – Analysis ………..... 16 – 17
Poster’s Five Force Analysis ……………………... 18-19
SWOT Analysis ………………………. 20
Analysis & Interpretation ………………………. 21-27
Example of Technical Analysis of Gold & Silver ………..... 28-33
Example of Fundamental Analysis …………..... 34
Practice with DEMO Trading Account with Meta Trader-4 …..... 35

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METATRADER 4 ………………..... 36 -37

Different Currencies Traded in the Market …………………… 38
How order is placed …………………… 39
Approaches to bring client ………………..... 40
Suggestions ………………..... 40
Learning outcomes from the Sip …………… 41
Conclusion …… ………………..... 42
References ………………..... 43

EXECUTIVE SUMMARY

The foreign exchange market is the buying, selling and exchanging of currencies at the current price or
the determined price, it is also called as OTC (over the counter). And the international commodity
market deal with Gold, Silver, Crude oil, Natural Gas etc.

This market is open 24/5 throughout the year except for particular country holidays, the market opens on
early morning Monday 2:30 am and the market closes on early morning Saturday 2:30 am.

This is a spot market so it does not have any expiry but the Indian market has expiry date. It is a two way
market where we can both buy and sell.

As an investment firm I had to deal with different clients, setting of appointments and making sure the
deal goes through and managing their portfolio’s once their account is opened.

I have successfully managed to bring in clients to the company’s network, this in turn achieved my target
of client acquisition. As far as the training which was given to me for the first 15 days helped me
confidently talk to the clients and make them invest and also the training helped me in managing the
portfolios of the client effectively and the training helped me get the first-hand knowledge about the
forex and commodity market.

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I am fully satisfied with the work I have done at JWINGS MANIFIEST Bangalore. My internship report
is ‘’ TECHNICAL & FUNDAMENTAL ANALYSIS IN FOREIGN CURRENCY EXCHANGE.” My
work was based on the Technical & Fundamental analysis on Foreign Currency Exchange

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CHAPTER-1 INTRODUCTION

Financial services are the economic services provided by the finance industry, which
encompasses a broad range of businesses that manage money, including credit unions, banks, credit card
companies, insurance companies, accountancy companies, consumer finance companies, stock
brokerages, investment funds and some government –sponsored enterprises.

Foreign exchange services are provided by many banks and specialist foreign exchange brokers around
the world. Foreign exchange services include:

• Currency exchange - where clients can purchase and sell foreign currency banknotes.

• Wire transfer - where clients can send funds to international banks abroad.

• Remittance - where clients that are migrant workers send money back to their home country.

ANALYSIS

An examination of the changes in the market that are used by a trader to determine whether to buy or
sell a currency pair or commodity at any one time. Forex analysis could be technical in nature, using
charting tools, or fundamental, using economic indicators and/or news-based events.

Three types of Analysis:

Trying to predict a market is a complex exercise and requires the use a scientific basis rather than
guesswork to predict Forex market behavior. Primarily, there are three methods for predicting Forex
market trends: • Technical Analysis
• Fundamental Analysis

• Sentimental Analysis

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TECHNICAL ANALYSIS:

Technical analysis mainly involves statistical analysis of the currency or commodity by evaluating
the past trend of price or volume. It is based on the notion that the past price trend tends to repeat
itself and would go in the same direction. Also, price tend to move within a range.

There are several technical indicators that can be used to analyze the trend, but we are using the
following for our analysis-

• Candlestick
• Pivot Point
• Fibonacci Retracement
• Moving Average
• Bollinger Bands
• Relative Strength Index
• Stochastic Oscillator

FUNDAMENTAL ANALYSIS:

Fundamental analysis is used to measure the real value of nation’s currency by evaluating different
economic indicators. Government or private organizations measure the economic indicators and present
the data to public. Economic indicators directly help in analyzing the economic growth of the nation.

Some of the economic indicators are-

• GDP
• Retail Sales Industrial Production
• Interest Rates etc.

SENTIMENTAL ANALYSIS:

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Each trader has his or her own opinion of why the market is acting the way it does.

CONCEPT OF FOREX MARKET

The Forex market is the market in which participants are able to buy, sell, exchange and speculate on
currencies. The forex markets is made up of banks, commercial companies, central banks, investment
management firms, hedge funds, and retail forex brokers and investors. The currency market is
considered to be the largest financial market in the world, processing trillions of dollars worth of
transactions each day.

ABOUT THE COMPANY:

J Wings Company was registered in 2015 in India. J wings focuses in training and educating
individuals about global market and to sharpen their skills to participate in the financial world. J wings
came alive with the intention to provide support and guidance to new comers to the trading world.

With our knowledge and years of experience in trading we have customized the training
programmed and made it simple for a layman to understand the financial market. Our courses are
targeted for individual investors or traders, novice or experienced, who want to learn how to use the
same tools and techniques as the professional traders. These courses offer a complete education and
training experience focusing on trading fundamentals, technical analysis, risk management, and highly-
developed skills of execution for virtually any trading instrument.

What the company does

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Nature of business carried:

J wings is a financial service providing company it operates globally. It has various business activities
like

1. Training
2. Stock Market
3. Health Insurance
4. Advisory Services
5. Investment Planning

Companies Portfolio:

1. Equity
2. Commodity Trading
3. Currency Trading
4. Health Insurance
5. Mutual Fund
6. Credit Card
7. Loan
8. Stock sip
9. Wealth Management

Company’s Mission:

To develop meaningful and life long relationship with the clients by providing the highest quality
services and address every aspect of their financial related issues.

Company’s Vision:

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To be the most trusted & respected professional services firm recognized by our clients delivering
excellent services, which is value for money & more than their expectations.

TECHNICAL & FUNDAMENTAL ANALYSIS IN FOREIGN

CURRENCY EXCHANGE

Company’s Values:

Integrity, accountability, collaboration, passion.

Service profile:

J wings is a financial service provider. It provides the various services as follows.

1. Financial Planning: To achieve your dreams and fulfill your future obligations, you need to
carefully plan your finances. This can be done via sound financial planning that takes into
account your current and future needs, your individual risk profile and your income to chart out
a roadmap to meet these anticipated needs.
2. Investment Planning: Placing of funds into the proper investment vehicles based on the
investor’s future goals, time horizon and priorities. This also takes into account the safety of the
investments as well as liquidity and level of return. Ideally, proper investment planning will
allow the investor’s funds to produce financial rewards over time.
3. Risk Management: Risk management is the continuing process to identify, analyze, evaluate,
and treat loss exposures and monitor risk control to mitigate the adverse effects of loss. While a
variety of different strategies can mitigate or eliminate risk, the process for identifying and
managing the risk is fairly standard First, threats or risks are identified. And then the
vulnerability of key assets like information to the identified threats is assessed.
4. Risk Control Techniques:
a) Avoidance of activities which cause loss

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 b) Reduction of the frequency of loss-risk prevention
c) Reduction of the severity of loss-risk reduction.

Objectives of the SIP:

• Analyzing whether fundamental analysis indicators can be used to guide buying and selling
decision
• To know about the strategies of Technical & Fundamental Analysis
• To know about the trading platform in Forex market
• To learn how the currencies are traded in Forex market
• To know about the approaches of potential investors in trading activities.
.

Methodology:

The various Methods used throughout the SIP are:

• Primary data is collected from live market i.e. Meta4 platform for trading currency in J Wings
company
• Secondary data : Data from J wings company website, from database available with the
company ,and from the platform used by the company
• Other relevant data required for the purpose of study was gathered from various websites and
TV channels such as
• Economic Times

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• Forexfactory.com NDTV Profit (News Channel).

Limitations:

The various limitations of the study are as follows:

• Due to fast and high volatility in the forex market predicting or interpretation may not be 100%
accurate.
• Detailed study of the topic is not possible due to the point limited size of the project

• There was a constraint with regard to time allocated for the research study

• The availability of information in the form of annual reports &price fluctuations of the
companies was a big constraint to the study.

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EIC – ANALYSIS

ECONOMY

With buyers and sellers from all corners of the globe participating in trillions of dollars of trades each
day, forex is a true global marketplace. The fact that foreign exchange trading has become such a
globalized activity means that macroeconomic events play an even greater role in forex than ever
before. Here some economic trends and events that those new to forex should be aware of.

The Role of Macroeconomics in Forex

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The forex market is primarily driven by overarching macroeconomic factors that influence the decisions
of the traders who ultimately decide the value of a currency at any given point in time. The economic
health of a nation's economy is an important factor in the value of its currency. Overall economic health,
however, is shaped by numerous economic events and information that may change on a daily basis,
contributing to the 24/7 nature of the international foreign exchange market. Let's take a closer look at
some of the factors that influence an economy's standing and drive changes in the value of its currency.

Capital Markets

The global capital markets are perhaps the most visible indicators of an economy's health, while stock
and bond markets are the most noticeable markets in the world. With constant media coverage and up-
to-the-second information on the dealings of corporations, institutions and government entities, there is
not much public information that the capital markets miss. A wide rally or sell-off of securities
originating from one country or another should be a clear signal that the future outlook (short term or
long term) for that economy has changed in investors' eyes.

Similarly, many economies are sector driven, such as Canada's heavily commodity-based market. In this
case, the Canadian dollar is heavily correlated to the movements of commodities such as crude oil and
metals. A rally in oil prices would likely lead to the appreciation of the relative to other currencies.
Commodity traders, like forex traders, rely heavily on economic data for their trades, so in many cases
the same economic data will have a direct effect on both markets.

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International Trade

Another key factor is balance of trade levels and trends between nations. The trade levels between
nations serve as a proxy for the relative demand of goods from a nation. A nation with goods or services
that are in high demand internationally will typically see an appreciation of its currency. For example,
in order to purchase goods from Australia, buyers must convert their currency into Australian dollars
(AUD) to make the purchase. The increased demand for the AUD will put upward pressure on it.

Trade surpluses and deficits exemplify a nation's competitive standing in international trade.
Countries with a large trade deficit are net buyers/importers of international goods, resulting in
more of their currency being sold to purchase other nations' currencies in order to pay for the
international goods. This type of situation is likely to have a negative impact on the value of an
importing country’s currency

CHAPTER-2

INDUSTRY ANALYSIS
The company deals in the following

• Investment Planning
• Investment Products
• Training and Education
• The company deals in Forex market, International commodity market.
• In the forex market the company mainly deals with following currencies

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And in commodity market they deal with Gold and Silver

Silver

Gold

The some of the competitors for J wings are

• Religare
• Share khan
• ICICI DIRECT
• INDIABULLS

PESTEL ANALYSIS:

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Political factors: In general, FX markets are lightly political because developed nations want to release
restrictions on the flow of global capital. For example if UK would join euro zone then the global forex
trade would decline only 2%. I think in next five years the political intervention to the forex market
fundamentals will continually diminish.

Economic factors: Forex market is global borderless and liquid financial market that operates 24 hours
a day. According to Keynes macroeconomic uncertainty lead people to stay or invest in more liquid
instruments. Because of its high liquidity, growth and profit potential, easy entry and exit. Forex retail
market is continuously attractive market in next five years. As a zero sum game, trading needs
discipline and comprehensive market context analysis and therefore the service of proprietary trading
will have significant role in growth potential.

Social factors: Retail forex trades are not guaranteed by a clearing organization and forex market has
not been the safest for participant. Over the last few years there has been a sharp rise in foreign currency

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scams. This ethical issue has alerted governments to regulate the market. Although in U.S NFA tries to
regulate it, the global openness has enabled them to regulate many but not all forex firms. Despite
additional regulation will most probably appear in next five years, the ‘increased legitimacy and
transparency should fuel forex’s continued growth’

Technological factors: Trading in the FX spot market is typically commission-free when done over
electronic trading systems, and the spread has fallen dramatically over the last five years as a result of
improved technology. Trading systems have been so far the collection of indicators and chart patterns
that one examines to determine when to enter or exit a particular market.

The speculative nature of the market is interested in relative movements of currencies. It depends on
large amount of information and variables, winners are those who can interpret them quicker and more
accurately. I believe that in the future computerized analyzing tools will play very significant role.

Legal factors: Forex has so far been largely unregulated marketplace. I think low transparency and
legitimacy will lead to additional regulation in order to protect newcomers and relatively small
participants in forex trading industry. Especially it will take place in proprietary trading where traders
collect customers’ money for speculation on behalf of customers over their own account. This trend will
result in higher regulatory and capital need barriers to entry the market. For example in U.S you have to

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apply for membership in NFA and obey their regulation in the market, e.g. net capital has to equal at
least $20,000,000

Environment: These factors include all that influence the surrounding environment. Factors of a business
environmental analysis include but are not limited to climate, weather, geographical location, global
changes in climate, environmental offsets etc.

• Weather
• Climate change
• Laws regulating environment pollution

In conclusion the PESTEL analysis shows that the market should stay attractive during next five years.
The continued growth potential and fierce cost competition will lead to attaching value added services to
trading systems. Proper information synthesis of the currency market impacts customer profitability
which will become the driver of scaling the volume of trading. Higher needs for comprehensive market
knowledge and professional approach increase customers demand for proprietary service.

PORTERS FIVE FORCE’S ANALYSIS:

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It is defined as a framework which is used to analyze the level of competition in the industry.

• Threat of new entrants.

• Threat of substitute products.

• Bargaining power of customers.

• Bargaining power of suppliers.

• Industry Rivalry.

THREAT OF NEW ENTRANTS: HIGH

• The entry in this sector is not easy.

• There is huge revenue which attracts new entrants.

• There are many government policies and requires license which has to be followed strictly to
enter in the market. Huge capital is required for entry in this market.

THREAT OF SUBSTITUTE PRODUCTS: HIGH

• The threat is comparatively less in this industry as there are not many substitute products.

• If the brokerage by the other firm is low then there will be extra competition

BARGAINING POWER OF CUSTOMERS: LOW

• The buyers of these products could be corporate and non-corporate.

• Such services are based on foreign exchange rates and is been compiled with HDFC bank rates.

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• 10$ commission is provided for 1 standard lot in trading.

• Buyer power is estimated to be strong.

• This segment is concentrated on high income people.

BARGAINING POWER OF SUPPLIERS: LOW

• The supplier power is limited to brokerage firms.

• The main suppliers are GBC FX.

• Any changes in laws, regulations, taxes, etc would be affecting the business and its clients

SWOT ANALYSIS:

STRENGTHS WEAKNESS
1. High liquidity for 1. Service expansion to investors.
large clents is not
2. Training and Consulting. possible.
3. Dedicated work force. 2. Focus on customer
Retention is less.
4.Providing value added services to the clients 3. Newly
established in
India. 5.
Emphasis on building
strong bond with 4. Exposure is very less
customers(less brokerage 5. Its only for niche compared to
others) market.

OPPORTUNITIES THREATS
1. Business climate 1. Limited resources favorable. 2. Many
new players

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2. Effective marketing need 3. Market is very dynamic to

be carried out. in nature.
3. Introduction of 4. Highly competitive specialized
services. environment.
4. Diversification. 5. Government polices and
5. Emerging stock markets. global financial crises.

CHAPTER-3 ANALYSIS AND INTERPRETATION

There are 3 types of market trend analysis. They are:

• Technical analysis
• Fundamental analysis
• Sentiment analysis

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TECHNICAL ANALYSIS:

Technical analysis is the framework in which forex traders study price movement.

• The theory is that a person can look at historical price movements and determine the current trading
conditions and potential price movement.

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• Technical analysts look for similar patterns that have formed in the past, and will form trade ideas
believing that price will act the same way that it did before.
• Technical analysts use charts because they are the easiest way to visualize historical data.

• As more and more forex traders look for certain price levels and chart patterns, the more likely that
these patterns will manifest themselves in the markets.

FUNDAMENTAL ANALYSIS:

Fundamental analysis is a way of looking at the forex

Market by analyzing economic, social, and political forces that may affect the supply and demand of an
asset.

• The idea behind this type of analysis is that if a country’s current or future economic outlook is
good, their currency should strengthen. The better shape a country’s economy is, the more foreign
businesses and investors will invest in that country. This results in the need to purchase that
country’s currency to obtain those assets.
• For example: let’s say that the U.S. dollar has been gaining strength because the U.S. economy is
improving. As the economy gets better, raising interest rates may be needed to control growth and
inflation.
• Higher interest rates make dollar-denominated financial assets more attractive. In order to get their
hands on these lovely assets, traders and investors have to buy some greenbacks first. As a result,
the value of the dollar will likely increase.

SENTIMENT ANALYSIS: Each trader has his or her own opinion of why the market is acting the
way it does. Each trader’s thoughts and opinions, which are expressed through whatever position they
take, helps form the overall sentiment of the market regardless of what information is out there

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TYPES OF TRADERS

Intraday: It is a market where trader buys and sells the securities/currencies within a day.
Short – term: It is market where trader takes a position less than 365 days.
Long – term: It is market where trader takes a position for more than 365 days.
Swing Trader: It is market where trader holds the position for 1 day to 15 days

JAPANESE CANDLE STICK

Japanese Candlesticks used for any forex period, whether it be one day, hourly, 30-minutes,
weekly and monthly. They used to describe the price action during the given period. Japanese
Candle stick are formed using the open, high, low and close of the chosen time period.

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 Green Candle Sticks:
It is referring to Buy or Bull candle which specifies that Opening at low price and closing at high
price.

Red Candle Sticks:

It is referring to Sale or Bearish candle which specifies that Opening at high price and closing
at low price.

TECHNICAL & FUNDAMENTAL ANALYSIS IN FOREIGN

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TYPES OF CANDLE STICK PATTERNS

1. Hammer Candlestick & Hanging man candlestick:

Hammer candlestick pattern is a bullish reversal pattern in technical analysis. The pattern looks like a
hammer. The pattern has one candle. It forms a downtrend and considered as a market bottom/support.
Hanging man Candlestick pattern is a bearish reversal pattern, which forms uptrend and considered as
market top or a resistance price.

2. Piercing candle stick patterns:

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 Piercing candlestick serve as an indicator that it is time to either buy a stock or close out short positions
because the stock may be trending upward soon. As per the piercing candle, the new candle (green
candle) should be low and should close down 50% of the previous candle. If the significant down trend
follows, it is Bearish or otherwise bullish.

3. Engulfing:

Is a bullish reversal pattern, usually occurring at the bottom of a downtrend. The pattern consists of two
candlesticks. When a significant downtrend (red candle) is followed, the new candle should make a new
TECHNICAL & FUNDAMENTAL ANALYSIS IN FOREIGN
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low and high simultaneously but the previous candle should cover inside the body. If the bullish is
formed (green candle), note that market will shoot up.

Is considered a bearish reversal pattern, usually occurring at the top of an uptrend. The pattern consists
of two candlesticks. When a significant uptrend (green candle), new candle is formed which makes new
high and low simultaneously but the previous candle should cover inside the body. If the bearish is
formed (red candle), note that market will shoot downwards.

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4. Morning star:

The morning star is a reversal pattern of technical analysis. The pattern has three candles forming at a
bottom of the downtrend. The first candle is long and bearish. The second candle is small and indecisive
candlestick. The third candle is longs and bullish candle.

5. Evening star: The evening star candlestick pattern is

also a reversal pattern. This pattern has three candles. It
forms at a top of an uptrend. The first candle is any
long and bullish candle. The second candle is a small
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and indecisive candlestick. The third candle is any long and bearish candle.

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SUPPORT & RESISTANCE:

From the above diagram, the zigzag pattern is making its way up (bull or buy market).When the forex
market moves up and pulls back, the highest point reached before it pulled back is call ‘Resistance’.
As the market continues goes up again, the lowest point reached before it, started back called
‘Support’

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STOP LOSS & TAKE PROFIT ORDERS:

Stop Loss or Limit order: An order placed with the platform to sell the currency when it reaches a
certain price.

Take Profit: It is a pending order that allows fixing the profit automatically.

Note: A smart trader always keeps Stop loss and Take profit to execute orders.

PIVOT POINTS:

Particulars USDJPY

Open price 110.766

High price 111.365

Low price 110.133

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Close price 111.086

Pivot Points 110.8375

Professional forex traders and market makers use pivot points to identify potential support and
resistance levels. Simply put, a pivot point and its support/resistance levels are areas at which the
direction of price movements can possibly change. In forex markets pivot points is referred as “PP”.
The pivot point and associated support and resistance levels are calculated by using the last trading
season’s open, high, low and close.

Pivot Point (PP) = Average of (Open price+ high price+ low price + close price)

EXAMPLE OF TECHNICAL ANALYSIS OF GOLD AND SILVER

PIVOT POINT

As we know pivot point gives us the support and resistance level. If the current price is above the point,
then it is support level and if the current price is below the point, then it is resistance level. (Source-
Actionforex.com)

GOLD

Pivot point for March to 4th May-

Weekly-

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SILVER

Pivot point for March to 4th May-

Weekly

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The study was conducted using of past 15 -50 days data and has been analyzed using 4 technical
analysis indicators.

a) Moving Average
b) Bollinger Bands
c) Relative Strength Index (RSI)
d) Stochastic oscillator

1. MOVING AVERAGE

As stated earlier, moving average gives us the trend of the commodity.

GOLD

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Yellow trend is of moving average (15 days) whereas red is of moving average (50days). Through our
analysis, we got to know that if yellow trend is above there trend then it’s going to be an uptrend and
vice-versa.

SILVER

Here we can see that there was a major down trend as the red trend is above the yellow for almost 1.5
months.
2. BOLLINGER BANDS

Bollinger band gives us the overbought and oversold level. Price level usually moves in a range.

GOLD

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Around 20 March’18 the band was narrow, it suggests less number of buyers and sellers. At this
time, we should wait for the next trend.

One more thing we analyzed that if the price touches the upper band, we should sell as it shows trend
reversal as it showed between12-18 April’18.

SILVER

Here we can see that the band was narrow for March till 12th April’18 and after that it touched the upper
band which shows a sign to trend reversal

3. RELATIVE STRENGTH INDEX (RSI):

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As we know trend above 70 shows overbought or overvalued price and below 30 shows oversold or
undervalued price. A best buy would be we the RSI is above 30 and going up.

GOLD

Here we can see that it never crossed the 70 or 30 line. So neither its overbought or oversold. We have
to use other indicators as well to make decision of buying or selling

SILVER

Here also its neither overbought or oversold. It just touched the 70 line during 18 April and came down.

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4. STOCHASTIC OSCILLATOR:

It tells us the supply and demand of the stock/commodity.Also, below 20 its overbought and above 80
its oversold. We should not trade during this time. This gives clue of trend reversal.

GOLD

During March-May, the overbought condition came during 26th March and oversold condition came
during 24th-30th April. Both of the condition showed trend reversal.

SILVER

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For Silver overbought condition came around 18th April and oversold around 28th April and both of
them ended in trend reversal.

EXAMPLE OF FUNDAMENTAL ANALYSIS

Sl. Fundamental Impact on Currency Call to be

Country/ Currency/
No News placed
Continent Commodity

1. Unemployment USA USD($) Actual> Forecast= Bad for Sell call

Claims currency for USD

2. Trade Balance USA USD($) Actual> Forecast= Good for Buy call
currency for USD

3. Retail Sales USA USD($) Actual>Forecast= Good for Buy call

currency for USD

4. Producer Price USA USD($) Actual>Forecast=Good for Buy call

Index (PPI) currency for USD

5. Consumer Price USA USD($) Actual>Forecast=Good for Buy call

Index(CPI) currency for USD

6. Monetary Policy Australia AUD More hawkish than Buy call

Meetings minutes expected=good for currency for AUD

7. French European Euro Policies of Candidature Buy call

Presidential Continent for
Elections intensive
growth

8. Official Bank Great GBP More hawkish than Buy call

Rate Britain expected=good for currency for GBP

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9. Bank of England- Great GBP Released quarterly=Increased Buy call

Inflation report Britain from previous period for GBP

10 Prelim GDP Q/Q Japan JPY Actual>Forecast= Good for Buy call
currency for JPY

DEMO ACCOUNT

Demo account is great to learn the technical aspects of the software and to test the capability to trade.
However, we can open a FREE demo account with most forex brokers. To become a smart and
successful forex trader, Do Not open a live trading account until we are constantly trading
PROFIBILITY on a demo account.

Learning Outcomes with DEMO Trading:

To control emotions: As a beginner to the market, Demo version plays a vital role to learn the
software and as well, as learn the basic theory to use in practice. It helps to increase risk taking
measures and being you during the times of losses.
To control temptations: When the market is moving upside, trading with Meta trader4 platform
helps to control temptations when we does not plan to take a next position in the market. To
become a successful trader ‘Right time’ is important to make ‘Correct profits’. Hence, it is
important to control our temptations to make profits every time and wait for real time.

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Going greedy way won’t help: It is said that 90% of people lose money, largely due to lack of
patience and having poor money management rules. Let us not be greedy on money since forex is
not about ‘Get Rich Quick Scheme’. Every successful trader in the world like Warren Buffet, Jessy
Livermore becomes rich in stock after execution of proper trading management rules.

METATRADER 4

The platform used in trading in forex and commodity market is METATRADER 4

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Advantages of using MT4

• It supports complete price charting system.

• It gives almost all technical tools require for analysis.
• It helps in locating the chart pattern and expected future price of currency.
• It helps to execute Buy and Sale call options with a support and resistance.
• It gives the opportunity to access trades through gadgets or smartphones with enable database

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This is how the account looks in real time

In the above diagram we are having the new order option where we can take the new buy or sell calls, and
in the file option we can login to trade account, where in the view option we can see the market watch of
different symbols and in the indicator list we can select the different types of oscillators and trends and in
the above we can select the bar chart, candlesticks and line charts.

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TECHNICAL & FUNDAMENTAL ANALYSIS IN FOREIGN
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Different currencies traded in the market

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This is how an order is placed in the platform

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Entry price Stop loss

1289.82 1285

Buy call

Take profit

1293

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Approach to bring clients:

• To understand the policy which the Company offers to the client.

• To determine the legitimate prospects covered with in the brochure.
• To build the target lists and develop the strategy to develop them.
• To be ready with the supporting documents like Aadhar card or PAN for opening account.
• To measure and make arrangements for presentations of the schemes with ready reference of
current trends in the market economic

SUGGESTIONS:

Technical analysis will improve the investment decisions. It is simple and more reliable than fundamental
analysis because the information required for Technical analysis is freely available as compared to
fundamental analysis.

• A single indictor is not enough for arriving at a selling or buying decision. A combination of
Technical Analysis indicators is required for more accurate decisions.

• Even though Technical Analysis itself is enough for making decisions in commodity market ,
simultaneous usage of both Fundamental and Technical Analysis will reduce errors in forecasting
future Prices.

• One should not start trading in market until you get a definite indication of change in trend to
reduce the risk of loss.

• In order to make a perfect trend prediction, analysis of minimum past five years data is required.

• For predicting accurate trend of future prices more sophisticated software are required.

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LEARNINGS OUTCOMS FROM THE SIP:

Corporate Culture:

I understood that maintaining and sustaining corporate discipline is must for professionals. Proper
dressing with clean shave teaches to overcome routine life sets and paves way to become
professional. Punctuality is another aspect where I have learned from the varied knowledgeable
employees and management.

Improving Communication Skills:

I consider myself good in communication skills, but after handling, many clients gave me an
immense confidence and energy to communicate on any aspect without jargons.
Skills towards Subject:
Unlike Indian markets, forex markets were new journey of knowledge where I gained aspects of
forex trading and analyst skills. I have developed skills required for the subject with respect to
proper analysis and reporting.
Working Styles:
There are people in the organization who give out their night sleep and would like to take position
in the market at the right time. This gives an immense pleasure and inspiration towards hard work
which pays huge profits. Management is friendly towards employees and interns, which comes to
rescue at every help. Every Friday or Saturday the management conducts games and sports for 1

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 hour to relax for the coming week. Such a culture helps the person to recover from the losses made
by taking positions.
Time Management:

Internship has helped me to manage time allocation to different tasks allotted in the company.
There is work pressure at the time of fundamentals surging the currencies. During such time,
how to segregate hostel preparations with that of office work give a sense of priority.

Other Learnings regarding trading

• There should not be any fear while trading

• Keep stop loss and take profit while trading
• Chain of command
• Wait for the right price

TECHNICAL & FUNDAMENTAL ANALYSIS IN FOREIGN

CURRENCY EXCHANGE

CONCLUSION:

Forex market is a very volatile market that’s why some people choose either to stay away or invest very
less. Some invest without even analyzing the market. But if we have proper knowledge then an investor
can gain a lot. Investing without knowledge will give us nothing. So, if we ever think to invest in

give us the basic knowledge of the happening in the economy. This acts as a very powerful indicator
becaus
the
statistical measure that gives us the analysis. We should check all the technical indicators before
investing. If more than 50% of our indicators suggests buy, then we should go for it.

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In currency and commodity market, if our technical are giving us a positive sign and we have a negative
fundamental then things might not go as thought. There could be a negative impact. So a person should
invest with proper analysis, by analyzing both fundamental and technical as both go hand in hand.

REFERENCE

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http://babypips.com http://forexfactory.com
http://gbcfx.com https://www.metatrader4.com/en
https://www.investing.com/ http://www.actionforex.com/
http://www.shubhlaxmicommodity.com/
https://www.ibef.org/industry/financial-services-india.aspx
http://www.jwings.in/

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