New to Foreign Exchange

Welcome to the FX market

“FX” is the short term used for the Foreign eXchange market, where one country's currency is exchanged for that of another country on a computer-based market.

Every day over $3.2 trillion dollars in currency are traded through the spot foreign exchange market. NOW, with the use of the Internet, you can easily access and trade on this market online.

The Foreign Exchange or FX market is open 24 hours a day, 5 days a week. You simply pay the broker a one-time fixed cost in the form of the difference between the buying and selling price of the currency pair.
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**At this time, U.S. governmental restrictions prohibit us from opening accounts with residents that reside in a number of different countries, including but not limited too, Afghanistan, Belarus, Burma (Myanmar), Cote d'Ivoire (Ivory Coast), Cuba, Democratic Republic of Congo, Former Liberian regime of Charles Taylor, Iran, Iraq, Libya, Nigeria, North Korea, Sudan, Syria, Unita (Angola), Western Balkans, and Zimbabwe. Please contact us if you have further questions as regulatory issues are updated.

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People like you are trading everyday on this market along with many other types of traders, such as corporations, hedge funds, commercial, investment, and central banks. In this market, it is the top seven banks that provide liquidity in this market, which include Bank of America, Credit Suisse, First Boston, Goldman Sachs, HSBC, J.P. Morgan, Morgan Stanley, Dean Witter, and UBS Warburg.

Bank of America reported in its 2002 annual report a $530 million profit from foreign exchange trading revenue under "Global Investment Income". Meanwhile, it reported only a $384 million profit from trading stocks, and a $86 million profit from commodities trading. It is not uncommon for a large bank to trade billions of dollars daily. Some of this trading activity is done on behalf of corporate customers, however bank dealers are performing a large amount of trading to make the bank profits. The financial statements of the majority of banks throughout the U.S. will denote income received from foreign exchange trading.

The commercial companies' international trade exposure is the backbone of the foreign exchange market. Companies such as Siemens, Nestle, Toyota, BP Amoco, Volkswagen, Intel, Dell Computers, Dow Chemicals, Monsanto, Merck Pharmaceuticals, SmithKline Beckman, Lufthansa, Caterpillar, Union Carbide and Kodak have traded or continue to trade heavily in foreign currencies. Most of these companies established in-house trading facilities or subsidiaries to manage their currency trading.

Caterpillar established its special currency management group back in 1986, when it reported a $100 million profit on foreign exchange that turned its $24 million operating loss into a $76 million profit for that year.

DaimlerChrysler threw itself into major investment headlines in late 2003 when it acknowledged that more than half of its 2Q 2003 operating profit was generated by currency trades - making more money on foreign exchange than in selling cars. The car maker reported quarterly operating profit of €641 million ($1 billion), beating some analysts estimates. The company says approximately €350 million of this profit was generated in foreign exchange.

In a recent interview, Warren Buffet, perhaps the most successful investor in history, and Chairman of Berkshire Hathaway, Inc., stated "Through the spring of 2002, I had lived nearly 72 years without purchasing a foreign currency". Since then Berkshire has made significant investments in, and today holds, several currencies.

George Soros, the hedge-fund manager who made trading history in 1992 by trading successfully against the British pound, disclosed in 2003 that he had taken a short position against the dollar, betting that it would decline in value against the Euro, Canadian Dollar and Australian Dollar. His statement would have made a huge impact ten years ago, when hedge funds had the potential to significantly influence the value of important international currencies. In fact, in 1992 Soros made an estimated $1 billion profit by helping push the British pound out of the European Exchange Rate Mechanism, earning him the name "the man who broke the bank of England."

The foreign currency exchange is a much different animal today, as economies are far more interconnected and currency markets are far more liquid and active. The estimated $1.9 trillion traded daily currently is several times the size of the daily trade in 1993. These days, "exchange rates are effectively set by American Backpackers, or Italian tourists getting dollars at Disneyland, or Nokia selling phone equipment to China Telecom, or Coca-Cola selling syrup to a South African bottler, or Daimler buying Chrysler, or Intel paying firms to construct a facility in Taiwan - in fact by the interaction of all these forces. The unfathomably immense number of cross-border transactions, investments, and exchanges now affects currencies far more than any single trader can." - Daniel Gross, as written in his "Moneybox" column

Trading foreign currencies is a challenging and potentially profitable opportunity for investors. However, before deciding to participate in the Forex market, you should carefully consider your investment objectives, level of experience and risk appetite. Most importantly, invest only excess capital and what you are able to risk.
Currency trading involves a high degree of risk and there are no guarantees that you will make money and there is a potential for loss.

There is considerable exposure to risk in any equities or foreign exchange transaction. Any transaction involving currencies involves risks including, but not limited to, the potential for changing political and/or economic conditions that may substantially affect the price or liquidity of a currency.

The leveraged nature of FX trading means that any market movement will have an equally proportional effect on your deposited funds. This may work against you as well as for you. The possibility exists that you could sustain a total loss of initial margin funds and be required to deposit additional funds to maintain your position. Your risk is what is deposited into your trading account. If you fail to meet any margin call within the time prescribed, your position will be liquidated and you will be responsible for any resulting losses. 'stop-loss' or 'limit' orders are highly recommended with any trades to reduce risk.

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