Your Student ID:
Your JMU username:
Trading Simulation Assignment
Foreign exchange trading has gained a lot of popularity in the twenty first century, where it has grown to the worth of over USD 3.5 trillion. This has attracted many investors, who are interested in earning returns on their investment. In order to offer delineation to factors that affect the forex market outlined below is a report on trading in futures market, with currency pair, the Sterling pound (GPB) ant United States dollars (USD) GPB/USD. The table below offers a delineation of trade was conducted during the period starting 9th February 2012 to 19th February 2012.
Date | Trade | Currency | Contracts | Maturity | Price |
9/2/2012 | Buy | GBP/USD | 10 | March 2012 | 1.5854 |
15/2/2012 | Sell | GBP/USD | 10 | March 2012 | 1.5765 |
15/2/2012 | Buy | GBP/USD | 10 | March 2012 | 1.5685 |
16/2/2012 | Sell | GBP/USD | 10 | March 2012 | 1.5765 |
19/2/2012 | Buy | GBP/USD | 10 | March 2012 | 1.5835 |
19/2/2012 | Sell | GBP/USD | 10 | March 2012 | 1.5860 |
1.1 Analysis of portfolio value and risk of the portfolio.
This report a delineation of trading including strategies adopted, but before this, so as to effective mitigates the risk of earning high losses or losing considerable amount of profit due to speculation behaviors. There was need to establish stop loss point at $1.5650 and the take profit point as $1.5900.
Having specified the spot loss point together with the take profit, this acted as the bench mark in trading so to manage my portfolio effective and avoid cases where I incur excessive losses. This implied that, in order to ensure the value of the portfolio does not follow below the pre-specified rate, constant evaluation of information and other factors that would affect the value of the portfolio were critically analyzed as delineated in the by the daily monitoring of the market below.
In addition, it was necessary to evaluate the growth of the...