The Foreign Currency Exchange Market

The Foreign Currency Exchange Market, also known as spot currency or Forex market, is the largest financial market in the world, consisting of over $3 trillion in transactions every day.  It is a global market in operation 24 hours a day every week from Sunday at 5:00pm EST to Friday at 4:00pm EST.  The Forex Market does 10 times the average daily turnover of the global equity markets and over 35 times the average daily turnover of the NYSE.

It is different from other markets not only because of its tremendous volume but also because of its extreme leverage (100:1 leverage is standard*), and the fact that it is a decentralized 'Interbank' market.  The main participants in the Forex market include the central banks, commercial and investment banks, hedge funds, corporations and private speculators.

Foreign currency trading on the retail level, where our managed program is traded, is based on speculation on changes in the exchange rate between two currencies. Changes in the exchange rate are due to changes in the value of each currency relative to the other in the pair and are measured in "percentage in points", or pips. In every trade, one currency in the pair is borrowed in order to buy the other, typically in lots of 100,000 units each. Currencies and actions are chosen based on technical and fundamental analysis in expectation of a particular outcome.

Forex trading involves substantial risk of loss and is not suitable for all investors.

*High leverage and low margin can magnify or lead to both substantial profits and losses.