| The Forex market is vital to the general prosperity | | | | movement has become considerably shorter. Now, |
| of the free world economy. Why? Some $1.5 trillion | | | | with long-term speculation with stocks or equities |
| dollars worth of international currencies are bought | | | | becoming increasingly risky, trading Forex and taking |
| and sold every single trading day. It is by far the | | | | advantage of its clear and predictable price trends is |
| largest traded market in the world. This volume of | | | | becoming increasingly popular. |
| trade is equivalent to over six months of trading in | | | | Many investors are choosing to focus their energy on |
| the New York Stock Exchange, which has an | | | | the currency markets simply because they offer the |
| average daily volume of $10 billion dollars. | | | | greatest predictable daily price movements, with the |
| Even though the major focus in this country in | | | | least risk. While professional fund managers at major |
| reference to investing has always been and still is the | | | | banks may behave independently and view the |
| stock and equity markets, the Forex market is 150 | | | | market from a unique perspective, most, if not all, |
| times larger than the New York Stock Exchange. See | | | | are at least aware of important technical chart points |
| the chart below for an illustration of the daily trading | | | | in each major currency. |
| volume of the New York Stock Exchange, the US | | | | As these important levels approach, the behavior of |
| Bond market, and the Forex market. | | | | the market becomes more technically oriented and |
| As you can see the Forex market is by far the | | | | the reactions of many managers are often |
| largest market in the world. Unfortunately from 1971 | | | | predictable and similar, thus market movements at |
| until very recent years the virtual owners of this | | | | these important technical levels can be predicted |
| market were the major banks, large brokerage firms, | | | | through simple technical analysis. These market |
| and multinational corporations. | | | | periods may result in large price swings as substantial |
| Major banks, even the Federal Reserve (which most | | | | amounts of capital are invested in similar positions. |
| Americans are unaware is a privately owned bank | | | | Furthermore, thanks to the computer revolution, |
| owned by mega-wealthy international bankers) realize | | | | home computers have become increasingly more |
| a large segment of their profits (sometimes as much | | | | powerful and affordable. This power, coupled with |
| as 40% or more) from trading currencies. | | | | the ease of Internet access has afforded the most |
| Up until recently if an individual wanted to trade | | | | casual of investor the same real-time access to the |
| currencies on the Forex market, the only way | | | | market that the professional trader on the trading |
| possible was to invest with a bank, which required | | | | floor has available. If it weren't for the instantaneous |
| not only a minimum of a one million dollar cash | | | | delivery of price information, and the ability of our |
| deposit, but this large deposit also had to be backed | | | | computers to quickly analyze incoming information, |
| by a five to ten million dollar net worth. | | | | day trading would not be possible. |
| As some time progressed a slightly better option | | | | Simplicity |
| was trading with a brokerage firm, which asked for a | | | | Instead of attempting to choose a stock, bond or |
| minimum deposit on average of a quarter million | | | | mutual fund from thousands available in the equity |
| dollars. Then factor in the myriad of sophisticated | | | | markets, the foreign exchange market deals primarily |
| communication and trading facilities necessary to | | | | with just eight to ten different currencies. Along side |
| trade, and this profitable market was unreachable to | | | | the U.S. Dollar, four major currencies dominate the |
| most individuals. | | | | trading on the $1.5 Trillion dollars traded daily on the |
| Accessibility | | | | Forex markets. This is due by nature of their |
| Fortunately for you and me, the Forex market has | | | | popularity, activity, volume, stability, and confidence. |
| now been opened up to small-scale investors. Unlike | | | | Clear Trends |
| the enormous amounts previously required by the | | | | Any professional trader knows that trends are the |
| banks and brokerage firms, comparatively far lower | | | | essence of profitable trading, and knowing this |
| margin requirements are finally available, which now | | | | makes the idea of trading currencies very attractive, |
| allows virtually any individual to trade this highly | | | | because currencies are the worlds best trending |
| profitable market. | | | | markets! Many studies of trend following systems |
| There are now many brokerage firms that specialize | | | | prove that currency trends are the most consistent |
| in trading currencies, which allow a minimum deposit | | | | and profitable! |
| that is much more reachable to most of us. In | | | | Regardless of the type of trend following system |
| addition, the recent boom in computer and | | | | used; long term, intermediate term or short term, |
| communication technologies has made this market | | | | currencies invariably outperform all other markets |
| accessible in ways previously exclusive only to large | | | | including stocks, bonds and other commodities. It |
| players. Thanks to the Internet, electronic trading is | | | | should come as no surprise that some of the worlds' |
| now possible for anyone with a computer and access | | | | most successful traders are currency traders. |
| to the internet to trade currencies. | | | | Traders such as George Soros, Bill Lipschutz, and |
| Liquidity | | | | Bruce Kovner earn hundreds of millions of dollars per |
| There are many reasons that investors are being | | | | year trading currencies! It is a well-known fact in the |
| attracted in large numbers to the Forex market. One | | | | world of currency trading that on one occasion the |
| major reason is liquidity. This market can absorb | | | | billionaire George Soros made in excess of one billion |
| trading volumes and per trade sizes that dwarf the | | | | dollars in a day with a trade he executed on the |
| capacity of any other market. On the simplest level, | | | | British Pound/US Dollar. |
| liquidity is always a major attraction to any investor | | | | One reason currencies trend better than every other |
| as it allows one the freedom to open or close a | | | | market is because of their macro-economic nature. |
| position at will. | | | | Unlike many commodities whose supply and demand |
| Another desirable aspect of Forex is when day | | | | fundamentals can literally change with the weather, |
| trading currencies your trading account is always | | | | currency fundamentals are much less random and far |
| liquid. At the end of each day trading your account is | | | | more predictable. In summary, currencies are one of |
| liquid cash, totally accessible, unlike stocks and mutual | | | | the best all around markets, currencies represent the |
| funds, which normally tie up your capital for months | | | | worlds' largest marketplace, and have the most |
| at a time. | | | | powerful and 10 persistent price trends, in other |
| High Profit Potential and Predictability | | | | words, immense opportunities for profit. |
| Years ago, like stocks, futures markets generally | | | | In addition each individual currency offers it s own |
| moved slowly and steadily toward price points (up or | | | | unique pattern of movements and trends, which |
| down). However, since about the early 1980's virtually | | | | provides investors diversification within the Forex |
| all currency markets have become increasingly | | | | market. |
| volatile, and the time required for the same price | | | | |