Currency Trading Exercise : Report - Assignment Example

The trading exercise started with small amount from all available currencies on the market. However, the exercise was not easy as I expected because I lost all the money within the first two days. I decided to open another account, bought different type of currencies and sold them. The result was still the same where I made a loss of more than fifty per cent. 2) My experience on the stock market The investment in the Saudi Stock Market was a good way of making money especially by using the Stock Market Strategy.

I was good at tracking the time at which the stock would fall or rise in value and eventually earn substantial amount of money although it did not satisfy my expectations. However, the stock market was based on aspect like market share and financial statement for a company (Lien 221). This was a privilege because I had knowledge in accounting and experience in financial statements which assisted me in performing well in the stock market. This knowledge is clearly revealed by the curriculum vitae that I have attached together with this document.

One of the techniques that I used was the “Long or Short stock technique”. . 100shares= $100. The Short Stock technique means that one can sell a stock before he or she owns it, with the expectation that the stock will depreciate in value, and eventually purchase it back to cover the short at a lesser price. This implies that I would make money even when the price was on the way down (Lien 111). 3) My experience on the currency trading market However, due to my ambition of making large sum of money, I decided to leave the stock market strategy and use the foreign exchange market, also known as Forex.

Since I did not have the experience on currency trading, I lacked adequate knowledge on a number of things. The first one was the currency exchange rate. I knew very little about the rate at which a currency could be exchanged for another. The second one was what the quotation of currency exchange rate meant in pairs. For instance, I did not know that GBP/USD stood for GBP and the US Dollar, and that GBP represented the first list of currency called base currency while USD represented the second list known as counter currency.

The base currency forms the basis for the sell or the buy. For instance, if I had to buy GBP/USD it means that I would buy pound sterling and simultaneously sell dollars. This would be done with the expectation that the pound sterling will appreciate in relative to US dollar (Lien 120). 4) Strategy I started the currency trading exercise by purchasing small amount from all available currencies in the market. Due to lack of experience on currency trading market, I decided to use my initial experience from the Saudi stock market; but the stock market was totally different from currency trading market.

Unlike the stock market strategy where I could easily follow the trend of a company’s financial statement and