SUMMER TRAINING REPORT

ON

“BASIC AWARENESS OF
INTERNATIONAL CURRENCY
MARKET”

DEPARTMENT OF BUSINESS ADMINISTRATION

MAHARAJA SURAJMAL INSTITUTE
Affiliated to Guru Gobind Singh Indraprastha University

C4, Janak Puri, New Delhi- 110058

SUPERVISOR: SUBMITTED BY:

MS. RUCHIKA GAHLOT SHRESHTH BABBAR

(06221201716)

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 CERTIFICATE

This is to certify that the project entitled, submitted by Shreshth

Babbar in partial fulfillment of the requirements for the award of
Bachelor in Business Administration from Maharaja Surajmal
Institute is an authentic work carried out by her under my
supervision and guidance.

To the best of my knowledge, the matter embodied in the project has

not been submitted to any other University / Institute for the award
of any Degree or Diploma.

MS. RUCHIKA GAHLOT

(Project Guide)

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 STUDENT DECLARATION

I, SHRESHTH BABBAR, student of BBA(G) 5th semester at

MAHARAJA SURAJMAL INSTITUTE hereby solemnly declares
that the project entitled ‘BASIC AWARENESS OF
INTERNATIONAL CURRENCY MARKET’ is the outcome of
my own research, prepared by me with the help of my Assistant
Professor MS. RUCHIKA GAHLOT.

This is an original piece of work and any part of this context has not
been submitted earlier for any degree, diploma or certificate
examination.

SHRESHTH BABBAR

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 ACKNOWLEDGEMENT

I offer my sincere thanks and humble regards to Maharaja Surajmal

Institute, GGSIP University, New Delhi for imparting us very
valuable professional training in BBA.

I pay my gratitude and sincere regards to Ms. Ruchika Gahlot, my

project guide for giving me the cream of his knowledge. I am
thankful to her as she has been a constant source of advice,
motivation and inspiration. I am also thankful to her for giving her
suggestions and encouragement throughout the project work.

I take the opportunity to express my gratitude and thanks to our

library staff for providing me opportunity to utilize their resources
for the completion of the project.

I am also thankful to my family and friends for constantly

motivating me to complete the project and providing me an
environment which enhanced my knowledge.

SHRESHTH BABBAR

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5|Page
 EXECUTIVE SUMMARY

JWINGS MANIFEST WEALTH is a financial market company where

it deals with both Global Market and Indian Market. In Indian
Market the company provides Portfolio Management Services
(PMS) where the portfolio requires huge amount and returns are
giving in profit sharing ratio.
My internship report is “BASIC AWARENESS OF INTERNATIONAL
CURRENCY MARKET’’. My work was based on the technical
analysis and fundamental analysis on forex and commodity
market.
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.
The training which was given to me for the first 15 days 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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 TABLE OF CONTENT

S.N Particulars Page

o. No
1 INTRODUCTION 9-22
1.1) OBJECTIVE OF THE STUDY
1.2) EIC ANALYSIS
2 ABOUT THE COMPANY 23-35
2.1) COMPANY PROFILE
2.2) SWOT ANALYSIS
2.3) PORTER’S FIVE FORCES
2.4) PESTLE ANALYSIS
3 LITERATURE REVIEW 36-46
4 RESEARCH METHODOLOGY 47-53
5 DATA ANALYSIS AND INTERPRETATION 54-64
6 CONCLUSION 65-68
7 REFERENCES 69

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 CHAPTER -1
INTRODUCTION

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  The foreign currency exchange, more commonly known as
Forex trading. Forex traders work off the relative value of
different currencies around the world. Forex trading is
usually done through a broker or a market maker. It is
mainly done over the internet and with just a few clicks a
trader can place and order. The broker will then pass the
order to a partner in the Interbank Market, and when the
trade is closed the loss or gain will be credited to the
trader’s account. This can quite often be a very quick
process. The forex market is open from Monday 2.30am at is
until Friday at 2.30 a.m. It operates 24 hours a day, because
of time differences all around the world, and likewise it has
been said that the forex market never sleeps.

 Fundamental and technical analysis can also be used in forex

trading. Like trading in the stock market, fundamental
analysis in forex depends on economic factors. It would
require a good eye for what events within a country would
cause a rise or drop in the relative value of their currency.
For example, a country struck by a natural disaster would
need foreign aid, and the value of their currency would likely
drop as a result. Technical analysis in forex trading also relies
on the ability to read a chart. Learning how to read a forex
chart can be very complicated, but it is also very useful.
Charts vary in style and time frame. Different types of charts
are Japanese candlesticks, line charts, and bar charts, and
their time frames can vary from as little as one second to as
much as ten years. All have their own benefits.

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  The terms spread, leverage, pip, and margin are all
important in understanding forex trading. Spread is the
difference between buy and sell price for the same thing
from a market maker. In other words, a market maker will
buy for one price and sell for another, so if the market price
doesn’t change, a trader will actually lose money. Pips are
used to describe the change in currency rates. One pip is
equal to 0.0001, except for in Yen, where one pip is 0.01.
This is because currency rates do not change by a lot, so it is
easier to express it in pips. Margin is a type of collateral used
by trading providers to make sure an investor can pay up in
the case of large losses. It is a deposit on the trading account
to cover potential future losses.

 Types of indicators used in forex trading are oscillators,

Larry Williams Indicators, moving averages. Oscillators
are based off of identifying highs and lows and turning
points. For example, when a certain stock has been
declining for a while and is reaching one of its all-time
lows, an investor may view this as a good time to buy,
because it is due for a rebound. This may also be risky
business, however, because sometimes these downward
trends don’t stop and lead to bankruptcy. Larry Moving
averages measure the momentum and direction of
certain trends. They compare current market values to
market averages, believing that prices usually fluctuate
around the average over a given period of time.
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 Momentum indicators are somewhat a mix of oscillators
and moving averages. Traders that use this method try to
pinpoint where the price action is at its height to make
large gains quickly. Fundamental and technical indicators
will be explored more in depth.

 Forex is the largest financial market in the world.

Compared to the measly $22.4 billion per day volume of
the New York Stock Exchange (NYSE), the foreign
exchange market looks absolutely great with its $ 5.3
trillion a day trade volume. The largest stock market in the
world, the New York Stock Exchange, trades a volume of
about $22.4 billion each day.

 Check out the graph of the average daily trading volume

for the forex market, New York Stock Exchange, Tokyo
Stock Exchange, and London Stock Exchange:

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1.1 OBJECTIVES OF THE STUDY

 To acquire and gain knowledge with corporate exposure

by working as Business Consultant in a trading firm.
 To know about the strategies of Technical and
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.

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1.2 ECONOMIC INDUSTRY COMPANY (EIC)
ANALYSIS

 ECONOMY
India has a diversified financial sector undergoing rapid
expansion, both in terms of strong growth of existing financial
services firms and new entities entering the market. The sector
comprises commercial banks, insurance companies, non-banking
financial companies, co-operatives, pension funds, mutual funds
and other smaller financial entities. The banking regulator has
allowed new entities such as payments banks to be created
recently thereby adding to the types of entities operating in the
sector. However, the financial sector in India is predominantly a
banking sector with commercial banks accounting for more than
64 per cent of the total assets held by the financial system.

The Government of India has introduced several reforms to

liberalize, regulate and enhance this industry. The Government
and Reserve Bank of India (RBI) have taken various measures to
facilitate easy access to finance for Micro, Small and Medium
Enterprises (MSMEs). These measures include launching Credit
Guarantee Fund Scheme for Micro and Small Enterprises, issuing
guideline to banks regarding collateral requirements and setting
up a Micro Units Development and Refinance Agency (MUDRA).
With a combined push by both government and private sector,
India is undoubtedly one of the world's most vibrant capital
markets.

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  MARKET SIZE

Mergers and acquisition (M&A) activity in India rose 125 per cent
year-on-year to US$ 32.5 billion across 445 deals during January-
September 2017.
The assets under management (AUM) of the mutual fund (MF)
industry grew 45 per cent to Rs 17.89 lakh crore (US$ 268.35
billion) during March 2017 to February 2018. Mutual fund asset
base in India increased by Rs 3.71 trillion (US$ 55.65 billion) to
reach a total corpus of around Rs 17 trillion (US$ 255 billion) in
2016, which is the highest growth recorded in the last seven
years.

The Indian life insurance industry has begun to recover and is

likely to report 12-15 per cent growth in FY 2018-19. India’s life
insurance sector is the biggest in the world with about 360 million
policies, which are expected to increase at a Compounded Annual
Growth Rate (CAGR) of 12-15 per cent over the next five years.
The insurance industry is planning to hike penetration levels to
five per cent by 2020.

In 2016, 2.4 million new Demat accounts were opened by Indians,

the highest number of account openings since 2008, led by higher
number of initial public offerings (IPOs) and greater interest in
mutual fund investments. SBI, the second largest issuer of credit
cards in India, has reported issuance of 115,000 new cards in

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December 2017, post demonetization, taking its total card
issuance to 4.75 million.

 GOVERNMENT INITIATIVES

SEBI plans to tighten the norms governing various market

participants in order to strengthen scrutiny, improve transparency
and mitigate liquidity risks from algorithmic trading.

SEBI has relaxed norms for registered foreign portfolio investors

(FPIs) in India, allowing them to operate through the International
Financial Services Centre (IFSC) without undergoing any additional
documentation or prior approval process.

The RBI has introduced trading in interest rate options (IRO),

effective from January 31, 2017, which will provide another
avenue to market participants to hedge and speculate on interest
rate risk.

 INVESTMENTS/DEVELOPMENTS

The Taiwan Futures Exchange (TAIFEX) has launched the TAIFEX

Nifty 50, a new Taiwan dollar denominated futures contract that
will track the National Stock Exchange's (NSE) Nifty 50 index,
thereby providing international investors with more efficient
access to the Indian capital market.

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Avendus Capital plans to start its structured finance business with
a dedicated fund of size Rs 500 crore (US$ 73 million), which will
be primarily raised from domestic investors, and will aim for
investments in growth companies, mid-market companies and
opportunities to provide structured debt or private financing.

Nippon Life Insurance, Japan’s second largest life insurance

company, has signed definitive agreements to invest Rs 2,265
crore (US$ 339.75 million) in order to increase its stake in Reliance
Life Insurance from 26 per cent to 49 per cent.

 ROAD AHEAD

India is today one of the most vibrant global economies, on the

back of robust banking and insurance sectors. The country is
projected to become the fifth largest banking sector globally by
2020.The report also expects bank credit to grow at a Compound
Annual Growth Rate (CAGR) of 17 per cent in the medium term
leading to better credit penetration. Life Insurance Council, the
industry body of life insurers in the country also projects a CAGR
of 12–15 per cent over the next few years for the financial
services segment.

 INDUSTRY PROFILE

Foreign exchange market (Forex, FX, or currency market) is a

global, worldwide decentralized financial market for trading
currencies. Financial centres around the world function as anchors
of trading between a wide range of different type of buyers and
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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.

 MARKET PARTICIPANTS

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
bank’s 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.

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Top 5 Currency Players-Banks:

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 currency’s exchange rate.

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

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equilibrium in the Forex market. Banks, dealers and online foreign
exchange traders use fixing rates as a trend indicator.

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.

Non-banking financial company

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).

The FX Ladder
Even though the forex market is decentralized, it isn’t pure and
utter chaos. The participants in the FX market can be organized
into a ladder. To better understand what we mean, here is a neat
illustration:

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At the very top of the forex market ladder is the interbank
market. Composed of the largest banks of the world and some
smaller banks, the participants of this market trade directly with
each other or electronically through the Electronic Brokering
Services (EBS) or the Reuters dealing 3000-Spot Matching.
The competition between the two companies – the EBS and the
Reuters Dealing 3000-Spot matching is similar to Coke and Pepsi.
They are in constant battle for clients and continually try to one-
up each other for market share. While both companies offer most
currency pairs, some currency pairs are more liquid on one than
the other.
For the EBS platform, EUR/USD, USD/JPY, EUR/JPY, EUR/CHF, and
USD/CHF are more liquid. Meanwhile, for the Reuters platform,

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GBP/USD, EUR/GBP, USD/CAD, AUD/USD, and NZD/USD are more
liquid.
All the banks that are part of the interbank market can see the
rates that each other is offering, but this doesn’t necessarily mean
that anyone can make deals at those prices.
Next on the ladder are the hedge funds, corporations, retail
market makers, and retail ECNs. Since these institutions do not
have tight c redit relationships with the participants of the
interbank market, they have to do their transactions via
commercial banks. This means that their rates are slightly higher
and more expensive than those who are part of the interbank
market.
At the very bottom of the ladder are the retail traders. It used to
be very hard for us little people to engage in the forex market but,
thanks to the advent of the internet, electronic trading, and retail
brokers, the difficult barriers to entry in forex trading have all
been taken down.

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 CHAPTER -2
ABOUT THE
COMPANY

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  2.1 COMPANY PROFILE

JWINGS focuses in training and educating individuals about

global market and to sharpen their skills to participate in the
financial world. JWings came alive with the intention to provide
support and guidance to new comers to the trading world. The
knowledge and the years of experience in trading have
customized the training program and made it simple for a
layman to understand the financial market.

In an era of constant changing and volatile financial Market,

Investors need Qualified /Trained and an unbiased professional
to assist them in achieving their short term and long term
Investment goal.

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At Investor centric, the single utmost aim is to assist clients with
dedication and integrity so that we exceed their expectations
and build enduring relationships.
They are having more than a year of experience in Financial
Service Sectors. We offer technology based services for our
clients to effectively monitor their portfolio and help them in
reaching their financial goals.
They focus at being the most reliable prompt and efficient
provider of financial services. They endeavor to be one stop
solutions for financial boutique and to be immense help to our
investors, learners and provide help regarding, stock market ,
advisory services, training, Investment planning, wealth
creation and insurance.
J Wings is a Subsidiary of FW Markets LTD was registered in 2014
in Saint Vincent and the Grenadines under license number 20779
IBC 2014. The Company's legal and correspondence address is
Cedar Hill Crest, P.O. Box 1825, Villa, St. Vincent and the
Grenadines.

 NATURE OF BUSINESS CARRIED

JWings is a financial service providing company it operates

globally. It has various business activities like:

1. Information & Training Centre

2. Foreign Exchange Trading
3. Index Trading
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 4. Futures Contract Transactions

 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.

 SERVICE PROFILE

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.

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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.

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.

JWings Approach towards its clients:

The clients' benefit always comes first. Our experience has taught
us that customer is the key to success. In -order to be successful;
we understand the risks and objectives of each client and guide
them.

Area of operation:
In India operates mainly in Bangalore and Hyderabad.

 COMPETITOR ANALYSIS

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“Starfing” is the competitor company which is into the forex
market and also works as same as the JWings Company. They
provide the same services to the people and also the parent
company, trading platform everything is same.

 2.2 SWOT ANALYSIS

STRENGTH:
• Training and consulting most important
• Concentrating on short term gains to clients
• Emphasis on building stronger bond with clients
• Highly professional and skilled staffs
WEAKNESS:
• Awareness among the people is very less
• There is no reputation as it is a start-up
• Lack of Trust
• Non-Availability of skilled Employees
OPPORTUNITIES:
• The external environmental analysis may reveal certain
new opportunities for profit and growth.
• Arrival of new technologies.
• Removal of international trade barriers.
• Expansion in emerging economies
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THREATS:
• New regulations
• Increased trade barriers

2.3 PORTER’S FIVE FORCES MODEL

Threat of new entrants:

The entry in this sector is not easy because it requires huge
capital. There are many government policies and requires license
which has to be followed strictly to enter in the market.
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Threat of new entrants: It is low because it’s difficult to raise
funds to enter into forex market.
Threat of substitute products:
JWings is into currency and commodity market, so it has
substitute to switch either market.
Threat of substitute product: It is moderate because it has
substitute and also the company going to be in Indian market
soon.

Bargaining power of customers:

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. This segment is
concentrated on High Net Worth Individuals and the returns and
norms are fixed by the company, there is no opportunity for
bargaining by the customers.
Bargaining Power of customers: It’s low because we don’t have
the right to bargain.
Bargaining power of suppliers:
The supplier power is limited to brokerage firms. The main
supplier to the company is GBCFX. Any changes in laws,
regulations, taxes, etc. would be affecting the business and its
clients.

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 Bargaining Power of Suppliers: It’s low because the supplier
can’t demand more brokerage or other charges from the
company as the company have the option of changing the broker.
Competitive rivalry:
“STARFING” is the rivalry company which is into the forex market
and also works as same as the JWings Company.
Competitive Rivalry: It is very high because they both provide the
same services to the people and also the parent company, trading
platform everything is same.

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2.4 PESTEL ANALYSIS

POLITICAL:
Political situation of a country is always an important factor to
be considered, how can it affect the industry, government may
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impose a new tax policy due to which entire revenue generating
structures of organizations may change
• Government involvement in trade unions and
agreements
• Tax policy (rates and incentives)
The President of United States Mr Donald Trump declared that
United States will withdraw from the Iran Nuclear Deal. This had
very much impact on the market where there was a fall in the
commodity market and the currency market.
ECONOMY:
These factors are the determinants of an economy’s performance
that directly impacts a company and produce a long term effects.
If the inflation rates starts to increase all the prices will start to
increase and eventually the investment rate decreases.
• Price fluctuations- When there was a unemployment
rate decrease in the US, the market had huge impact and
there was more volatility.
• Stock market trend- When there is a news which has
an impact in the market, we cannot follow the trend for
investment. May be we can book profit and come out of the
market.

SOCIAL:
These factors scrutinize the social environment of the market, and
the standard determinants like cultural trends, demographics and
population analytics.
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 • Attitudes toward work, leisure, career and retirement
• Attitudes toward saving and investing

TECHNOLOGY:
These pertain to innovations to the technological factors of a
business which may affect the day to day operations of the
business, may be in automation, technological awareness that
market possesses
We don’t follow the same indicators and strategies which have
been already practised. We try innovating the new strategies and
the trend lines though the technology by adding different
templates.

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.
When there is a war dispute between countries, any natural
calamities across the global affects the forex market heavily
where many people lose their money in huge.

LEGAL:
There are certain laws and policies in a country which may affect
the business environment and there may be certain law and
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regulation which the company maintains to itself. These factors
have both internal and external sides. Legal analysis takes into
account both of these angles and then charts out the strategies in
light of these legislations. For example, consumer laws, safety
standards, labor laws etc.
JWings being a startup company and also a developing company,
PESTEL analysis doesn’t work exactly but they are trying to
maintain their standards and following it.

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 CHAPTER -3
LITERATURE
REVIEW

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TECHNICAL ANALYSIS
In finance, technical analysis is a security analysis discipline for
forecasting the direction of prices through the study of past
market data, primarily price and volume. Behavioral economics
and quantitative analysis incorporate substantial aspects of
technical analysis, which being an aspect of active management
stands in contradiction to much of modern portfolio theory.
According to the weak-form efficient-market hypothesis, such
forecasting methods are valueless, since prices follow a random
walk or are otherwise essentially unpredictable.

CONCEPTS
o Support and resistance is a concept in technical analysis
that the movement of the price of a security will tend to
stop and reverse at certain predetermined price levels.
Support
A support level is a price level where the price tends to find
support as it is going down. This means the price is more likely to
"bounce" off this level rather than break through it. However,
once the price has passed this level, by an amount exceeding
some noise, it is likely to continue dropping until it finds another
support level.
Resistance
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A resistance level is the opposite of a support level. It is where the
price tends to find resistance as it is going up. This means the
price is more likely to "bounce" off this level rather than break
through it. However, once the price has passed this level, by an
amount exceeding some noise, it is likely that it will continue
rising until it finds another resistance level.
Identifying support and resistance levels
Support and resistance levels can be identified by trend lines.
Some traders believe in using pivot point calculations.
The more often a support/resistance level is "tested" (touched
and bounced off by price), the more significance given to that
specific level.
If a price breaks past a support level, that support level often
becomes a new resistance level. The opposite is true as well, if
price breaks a resistance level, it will often find support at that
level in the future.
Various methods of determining support and resistance exist. A
price histogram is useful in showing at what price a market has
spent more relative time. Psychological levels near round
numbers often serve as support and resistance. More recently,
volatility has been used to calculate potential support and
resistance.
Using support and resistance levels
This is an example of support switching roles with resistance, and
vice versa:

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If a stock price is moving between support and resistance levels,
then a basic investment strategy commonly used by traders, is to
buy a stock at support and sell at resistance, then short at
resistance and cover the short at support as per the following
example.
When judging entry and exit investment timing using support or
resistance levels it is important to choose a chart based on a price
interval period that aligns with your trading strategy timeframe.
Short term traders tend to use charts based on interval periods,
such as 1 minute (i.e. the price of the security is plotted on the
chart every 1 minute), with longer term traders using price charts
based on hourly, daily, weekly or monthly interval periods.
Typically traders use shorter term interval charts when making a
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final decisions on when to invest, such as the following example
based on 1 week of historical data with price plotted every 15
minutes. In this example the early signs that the stock was coming
out of a downtrend was when it started to form support at $30.48
and then started to form higher highs and higher lows signalling a
change from negative to positive trending.

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 o Efficient market hypothesis
The efficient-market hypothesis (EMH) contradicts the basic
tenets of technical analysis by stating that past prices cannot be
used to profitably predict future prices. Thus it holds that
technical analysis cannot be effective. Economist Eugene Fama
published the seminal paper on the EMH in the Journal of Finance
in 1970, and said "In short, the evidence in support of the efficient
markets model is extensive, and (somewhat uniquely in
economics) contradictory evidence is sparse."[41] EMH advocates
say that if prices quickly reflect all relevant information, no
method (including technical analysis) can "beat the market."
Developments which influence prices occur randomly and are
unknowable in advance.
Technicians say that EMH ignores the way markets work, in that
many investors base their expectations on past earnings or track
record, for example. Because future stock prices can be strongly
influenced by investor expectations, technicians claim it only
follows that past prices influence future prices. They also point to
research in the field of behavioral finance, specifically that people
are not the rational participants EMH makes them out to be.
Technicians have long said that irrational human behavior
influences stock prices, and that this behavior leads to predictable
outcomes. Author David Aronson says that the theory of
behavioral finance blends with the practice of technical analysis:
By considering the impact of emotions, cognitive errors,
irrational preferences, and the dynamics of group

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 behavior, behavioral finance offers succinct explanations
of excess market volatility as well as the excess returns
earned by stale information strategies.... cognitive errors
may also explain the existence of market inefficiencies
that spawn the systematic price movements that allow
objective TA [technical analysis] methods to work.
EMH advocates reply that while individual market participants do
not always act rationally (or have complete information), their
aggregate decisions balance each other, resulting in a rational
outcome (optimists who buy stock and bid the price higher are
countered by pessimists who sell their stock, which keeps the
price in equilibrium). Likewise, complete information is reflected
in the price because all market participants bring their own
individual, but incomplete, knowledge together in the market.

o Types of charts
• Open-high-low-close chart — OHLC charts, also known as
bar charts, plot the span between the high and low prices of a
trading period as a vertical line segment at the trading time, and
the open and close prices with horizontal tick marks on the
range line, usually a tick to the left for the open price and a tick
to the right for the closing price.
• Candlestick chart — Of Japanese origin and similar to OHLC,
candlesticks widen and fill the interval between the open and
close prices to emphasize the open/close relationship. In the
West, often black or red candle bodies represent a close lower
than the open, while white, green or blue candles represent a
close higher than the open price.
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 • Line chart — Connects the closing price values with line
segments.
Point and figure chart — a chart type employing numerical filters
with only passing references to time, and which ignores time
entirely in its construction.

o Candlestick pattern

It is formed when opening and closing prices are virtually the same. The
length of shadows can vary. It is considered that doji candlesticks are
usually components of many candlestick pattern.

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It is formed when the opening and the closing prices are at the highest of
the day. If it has a longer lower shadow it signals more bullish trend. When
it appears at market bottom it is considered as a reversal signal.

It is formed when the opening and closing prices are at the lowest of the
day. If it has a longer upper shadow it signals more bearish trend. When it
appears at market top it is considered as a reversal signal.

A black or a white candlestick that consists of a small body near the high
with a little or no upper shadow and a long lower tail. It is considered as a
bullish pattern during a downtrend.
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A black body is formed in an upside-down hammer position. It is considered
as a bottom reversal signal that needs confirmation on the next trading
day.

It consists of a small while body that is contained within the followed large
black candlestick. When it appears at top it is considered as a major
reversal signal.

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It consists of a small black body that is contained within the followed large
white candlestick. When it appears at bottom it is interpreted as a major
reversal signal.

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 CHAPTER -4
RESEARCH
METHODOLOGY

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  DATA COLLECTION
Data collection is the process of gathering and measuring
information on targeted variables in an established system, which
then enables one to answer relevant questions and evaluate
outcomes. Data collection is a component of research in all fields
of study including physical, social sciences, humanities, and
business. While methods vary by discipline, the emphasis on
ensuring accurate and honest collection remains the same. The
goal for all data collection is to capture quality evidence that
allows analysis to lead to the formulation of convincing and
credible answers to the questions that have been posed.
Data collection is concerned with the accurate acquisition of data;
although methods may differ depending on the field, the
emphasis on ensuring accuracy remains the same. The primary
goal of any data collection endeavor is to capture quality data or
evidence that easily translates to rich data analysis that may lead
to credible and conclusive answers to questions that have been
posed.
Accurate data collection is essential to ensure the integrity of the
research, regardless of the field of study or data preference
(quantitative or qualitative). The selection of appropriate data
collection tools and instruments, which may be existing, modified
or totally new, and with clearly defined instructions for their
proper use, reduces the chances of errors occurring during
collection.
Distorted findings are often the result of improper data collection
such as misleading questions on questionnaires, unknowingly
omitting the collection of some supporting data, and other
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unintentional errors. This would lead to a skewed conclusion that
may be useless.

 TYPES OF DATA

1) PRIMARY DATA: Are those which are collected a fresh and for
the first time and thus happen to be original in character and
known as Primary data.

2) SECONDARY DATA: Are those which have been collected by

someone else and which have already been passed through the
statistical process are known as Secondary data.

 DATA COLLECTION METHODS

1. COLLECTION OF PRIMARY DATA: There are several methods of

collecting primary data, particularly in surveys and descriptive
researches. In descriptive research, we obtain primary data either
through observation or through direct communication with
respondents in one form or another or through personal
interviews.

2. COLLECTION OF SECONDARY DATA: These are already available

i.e. they refer to the data which have already been collected and
analyzed by someone else. Secondary data may either be

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published or unpublished data. Researcher must be very careful in
using secondary data, because the data available may be
sometimes unsuitable.

 DATA COLLECTION TECHNIQUES

Information can be gathered from a range of sources. Likewise,
there are a variety of techniques to use when gathering primary
data or secondary data.

● OBSERVATION METHOD: Observation method is a method

under which data from the field is collected with the help of
observation by the observer or by personally going to the
field.
● INTERVIEW METHOD: This method of collecting data
involves presentation or oral-verbal stimuli and reply in
terms of oral-verbal responses
● QUESTIONNAIRE METHOD: This method of data collection is
quite popular, particularly in case of big enquiries. The
questionnaire is mailed to respondents who are expected to
read and understand the questions and write down the
reply in the space meant for the purpose in the
questionnaire itself. The respondents have to answer the
questions on their own.

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 ● SURVEY METHOD: One of the common methods of
diagnosing and solving of social problems is that of
undertaking surveys.
● Publications of Central, state , local government• Technical
and trade journals• Books, Magazines, Newspaper• Reports
& publications of industry ,bank, stock exchange• Reports by
research scholars, Universities, economist• Public Records

In this project report, both primary and secondary method for

collecting data regarding the forex market data.

• PRIMARY DATA:
The primary data is collected from live market i.e. [Meta Trader 4
FX Market it is the platform for trading currency]. The data has
also been collected from the clients regarding their investment
opportunities in Forex market.

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 • SECONDARY DATA:
The secondary data is collected from Action FX, Forex
Factory.com, Investing.com, Reuters.com, International news
reports.

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 CHAPTER -5
DATA ANALYSIS
AND
INTERPRETATION

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 ANALYSIS & FINDINGS OF USD/JPY, XAU/USD

DEFINITION of USD/JPY (U.S. Dollar/Japanese Yen)

The abbreviation for the U.S. dollar and Japanese yen cross rate is
quoted as the USD/JPY. The currency pair shows how many
Japanese yen (the quote currency) are needed to purchase one
U.S. dollar (the base currency). The symbol for the Japanese yen
is ¥.
Trading the USD/JPY currency pair is also known as trading the
"gopher."
BREAKING DOWN USD/JPY (U.S. Dollar/Japanese Yen)
The value of the USD/JPY pair is quoted as 1 U.S. dollar per x
Japanese yen. For example, if the pair is trading at 150 it means
that it takes 150 yen to buy 1 U.S. dollar.
The USD/JPY is affected by factors that influence the value of the
U.S. dollar and the Japanese yen, both in relation to each other
and to other currencies. For this reason, the interest rate
differential between the Federal Reserve (Fed) and the Bank of
Japan (BoJ) will affect the value of these currencies when
compared to each other. For example, when the Fed intervenes
in open market activities to make the U.S. dollar stronger, the
value of the USD/JPY cross could increase, due to a strengthening
of the U.S. dollar when compared to the Japanese yen.
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Safe haven
Despite the struggles of the Japanese economy in the 21st
century, the yen remains a safe haven currency, meaning in times
of investor stress or market turmoil, the Japanese yen
appreciates. This was evident during the Great Recession, where it
traded from above ¥120 in 2007, to below ¥90 in 2009.
On the other side of the coin, the yen tends to weaken when the
global economy is strong and stock markets are moving higher. In
the post-Recession years, this was evident where the yen slowly
lost its value against the U.S. dollar as the global economy
recovered. The weakening was exasperated when in 2013, the
Bank of Japan embarked on large-scale quantitative easing.
Correlations
The USD/JPY tends to have a positive correlation with
the USD/CHF because they all use the U.S. dollar as the base
currency and the Swiss franc remains another one of the world’s
safe haven currencies.
On the flip side, USD/JPY is negatively correlated with gold. As
USD/JPY fell during the crisis, gold prices soared.

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56 | P a g e
 The data was collected for 15 days from 1.8.18 of the one paired
currency and one commodity to determine the buying or selling
decisions in the Forex market.

USDJPY

DATE P.P M.V RSI S.O B/S S.L T.P

1.08.18 111.086 111.34 39.62 16.00 Sell 111.39 111.24

2.08.18 110.039 112.67 31.65 25.36 Sell 109.15 109.95

5.08.18 109.263 112.52 29.56 27.00 Sell 109.05 108.90

6.08.18 109.061 112.57 28.06 27.35 Sell 109.25 108.85

7.08.18 109.045 112.52 29.05 27.45 Sell 109.35 108.65

8.08.18 109.015 112.35 30.25 30.21 Sell 109.00 109.35

9.08.18 109.115 112.48 29.56 50.21 Sell 109.10 109.31

10.08.18 109.064 113.21 28.98 35.45 Sell 109.01 110.00

12.08.18 110.541 111.54 29.64 65.12 Sell 110.00 110.74

13.08.18 110.879 112.68 35.54 14.22 Sell 110.67 110.97

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 14.08.18 111.256 112.75 50.15 16.22 Buy 111.00 111.45

15.08.18 109.023 112.81 50.67 17.55 Buy 109.00 109.15

16.08.18 109.458 111.23 50.98 54.22 Buy 109.15 109.68

17.08.18 112.654 110.25 56.21 45.60 Buy 112.35 112.75

19.08.18 112.111 111.05 35.14 75.20 Sell 112.00 112.61

XAUUSD
DATE P.P M.V RSI S.O B/S S.L T.P
1.08.18 1312 1309 50 68 Buy 1306 1312
2.08.18 1315 1311 53 72 Buy 1307 1315
3.08.18 1318 1314 57 75 Buy 1310 1318
4.08.18 1314 1310 59 79 Buy 1306 1314
5.08.18 1321 1317 61 81 Buy 1313 1322
7.08.18 1319 1315 65 78 Buy 1313 1322
8.08.18 1312 1309 74 71 Buy 1306 1315
9.08.18 1324 1319 75 82 Buy 1315 1325
10.08.18 1332 1312 54 60 Buy 1307 1329
11.08.18 1330 1315 68 76 Sell 1321 1309
14.08.18 1335 1330 61 69 Sell 1334 1325
15.08.18 1337 1334 44 55 Sell 1337 1330
16.08.18 1336 1332 39 49 Sell 1328 1337
17.08.18 1339 1333 50 47 Sell 1338 1315
18.08.18 1352 1348 35 45 Sell 1353 1340

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FOREX PERFORMANCE

Pair Daily 1 Week 1 Month YTD 1 Year 3 Years

EUR/USD 0.07% 0.22% 1.01% -4.97% -4.09% 3.87%

USD/JPY 0.12% -1.83% -2.95% -2.01% -2.59% -8.30%

GBP/USD 0.24% 0.78% -0.33% -5.97% -5.14% -14.90%

USD/CHF -0.08% -0.79% -1.22% 1.26% 0.04% -0.09%

USD/CAD 0.05% 0.85% 2.29% 8.11% 7.46% -1.61%

EUR/JPY 0.11% -1.61% -1.97% -6.87% -6.57% -4.75%

AUD/USD 0.26% -0.73% -2.33% -9.56% -9.17% -2.60%

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Submission of Reports based on Analysis:

Analysis of forex markets mainly includes ‘Technical Analysis’ and

‘Fundamental Analysis’. Technical analysis is done with the help of
charting techniques (candlestick patterns) whereas fundamental
analysis done based on up to date news and knowledge of
happening in the world.

Here are the following observations to be make while drafting

report:

• Breakout: when a price passes through and stays

above an area of support or resistance. Forex Channel
index: To identify cyclical trends and whether retreat or
surge situation. Momentum: The rate at which the
positions to be taken.
• Pivot points – An analysis by taking average of 4 prices
i.e., open, high, low and close. Moving average – To
observe the demand and supply volatility in the market.
• Relative Strength Index – To know the trends currently
the market is shaping its journey. Fibonacci levels – By
drawings Fibonacci levels, one can predict the price to be
reached.

• Bollinger Bands – By looking at this band, helps us to

know whether the market is on buy or sale side.

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 • Stochastic Oscillators – If the price is less than 20(its
oversold currency) and more than 80(its overbought
currency) which helps to know whether the market
would be rising/falling.

Every morning hour the report is prepared as per our analysis in

the ‘Excel Spreadsheet’ and discuss with the colleague for
feedbacks. If any deviations in analysis is noticed, then the matter
is carried forward to Portfolio manager about the deviations and
scrutiny before placing trade.

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 TRADING HISTORY FOR 2 DAYS

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 CHAPTER -6
CONCLUSION

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Value Additions from the project:

 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 weak 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 was 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
65 | P a g e
and sports for 1 hour to relax for the coming week. Such a culture
helps the person to recover from the losses made by taking
positions. While preparing reports, it gives immense learning to
MS-Office applications. I have improved my typing skills to 30
words per minute after joining JWings.

 Learn and Earn:

Internship at J wings has realized me that earning money is not
easy and requires much blood and sweat to be in a profitable
zone. This will definitely help me to act or plan my future earnings
accordingly. The theme ‘Learn & earn ‘is beautifully quoted which
inspires me that ‘Learning should never stop in life’.

 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

LEARNINGS:
• From the 1st day of JWINGS I have learnt two main things
Patience and confidence about the subject knowledge. Apart
from the forex market I have learnt Indian Market like Equities
and Derivatives which helped me in gaining theoretical
knowledge and also the trading knowledge.

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  To analyses the market by seeing the external factors and also
technically.
 Understood the people mind-set towards investing in the
financial market.

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REFERENCES:
• Technical Analysis available from
https://www.babypips.com//

• Fundamental Analysis news available from

https://www.forexfactory.com/

• Meta Trader 4 Platform available from

https://www.gbcfx.com/

• Meta trader4 platform available from

https://www.metatrader4.com/en

• International Forex Broker available from

http://gbcfx.com/

• News and Articles on forex available in

https://www.investing.com/

• Analyst calls sometimes available from

http://www.actionforex.com/

• Support/Resistance available
http://www.shubhlaxmicommodity.com/
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