Posted by forex at 4:55 AM
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1. Provide information on the group of currencies referred to as the majors. The majors are the most commonly traded currencies, which include the euro, the Japanese yen, the Canadian dollar, the U.S. dollar, the Swiss franc, and the Australian dollar.
2. Explain the pricing convention used by Forex traders. Forex traders trade in increments known as 'pips' which is price interest point. A pip measures the amount of change in the exchange rate for a currency pair.
3. Explain how currency pairs work. Currencies are quotes in pairs. The rate tells the trader how much one currency can buy of another currency. One of the most commonly traded currency pairs is Eur/USD, which is the euro/U.S. dollar currency pair. In this pair you are selling euro and buying dollars.
4. Go over a pricing example with the students. If the Eur/USD rate goes from 1.1910 to 1.1930, the euro is getting stronger and the dollar is getting weaker against the euro. If the rate goes from 1.1910 to 1.1890, it means the euro is getting weaker in comparison to the dollar.
5. Set up a virtual game over a one month trading period. Have each student set up their own virtual trading account which can be done on any reputable Forex trading platform. At the end of the one month period, choose a first, second and third place winner and have the winners explain the trades they made to the class.