The foreign currency market (known as the FOREX) is the largest financial market in the world. Every day over $3 trillion dollars in currency are traded thru the spot foreign exchange market.

Q. What is Foreign Currency?
A. A medium of exchange. Every country has its own currency; the value of its currency is relative to the world's perception of one's country's economic and political strength versus other countries.

Q. What Factors Effect the Foreign Currency Market?
A. Rising US interest rates, Japanese trade surplus, the U. S. budget deficit, a new government in Germany, peso devaluation in Mexico, all of these events have an effect on the price of currencies. Everyone feels the impact of currency price movements, whether they are a US investor in a global mutual fund or a consumer buying a VCR, currency movements influence us all. Indirectly, we are all passive currency investors. Every acquisition, product purchase or financial investment in the equity, credit or money market, places a residual value in a selected currency or group of currencies.

Q. Who Trades In the Currency Markets?
A. It is a market composed of an international ring of traders who command huge amounts of capital on behalf of millions of investors. They are bound to one another via sophisticated computer and telecommunications technologies. There is no trading floor, no centralized clearinghouse, and no governing body.

Q. A 24 - Hour Trading Day?
A. Covering the major international time zones, the Forex market officially opens at 9:00 AM starting in Tokyo. The day's market activity then moves through Frankfurt, Geneva, Paris, London and New York. Buyers and sellers are available 24 hours per day. Traders and investors can respond to currency fluctuations and international news events anywhere day or night.

Q. How often are trades made?
A. It depends on market conditions. Here at Forex would rather not trade than expose to excessive risk. Therefore, no set amount of trades is made per month. Positions are taken and exited only when trader believes the risk to reward ratio meets his standards.

Q. How long are positions maintained?
A. A position is maintained until one of three events occur: sufficient profits from a position have been realized and it is no longer wise to expose the realized profits in order to squeeze a little bit more out of the position; a stop-loss is triggered and the position is exited in the next trade; or the traders believe that the opportunity cost of the position is too high. In each case, there is no set duration, thus positions are held for varying lengths of time. In general, positions are not frequently held more that 24 hours.

Q. What Economic Factors Effect Foreign Exchange Rates?
A. These include economic policy, disseminated by government agencies and central banks, and economic conditions, generally presented through economic reports. Economic policy comprises government fiscal policy (budget/spending practices) and monetary policy (the means by which a government’s central bank influences the supply and cost of money, which is reflected by the level of interest rates). Money tends to flow where it gets the best possible returns. Economic conditions include government budget deficits or surpluses, balance of trade levels and trends, inflation levels and trends and economic growth.

Q. If my funds are in US dollars, how can I benefit from the dollar declining against currencies?
A. This is the heart of Forex service. By moving into other currencies and returning to the dollar you are able to increase the amount of your dollar denominated funds. For example, if you believe the dollar will weaken against Swiss Franc you will buy Swiss Franc now and sell them later. In this case, if it happens as forecasted, the dollar will depreciate but you will have profited, in the dollar terms, since when you sold back our Francs you receive more US dollars that you used when you bought the Swiss Francs.

Q. What is a Foreign Exchange Transaction?
A. A foreign exchange transaction is merely an exchanging of one another. Every transaction has two customers who wish to exchange foreign currencies in opposite directions. Forex serves commercial participants doing business internationally, money market investors seeking higher differentials between interest’s rates, central banks supporting currencies on behalf of their government and short term investors hoping to profit from currency fluctuations.

Q. What is a Foreign Exchange Rate?
A. The foreign exchange rate is the price of one currency expressed in terms of another. Just like stocks, the value of the US dollar and other currencies fluctuates on the international Interbank foreign exchange spot market through the free-market activity of buying and selling. When demands for the currency are high, the foreign rate increases. When supply outruns demand, the currency declines.

Q. What Political Factors Might Effect Currency Rate?
A. Internal, regional and international political conditions and events can have a profound effect on currency markets. Political upheaval and instability can have a negative impact on a nation’s economy.

Q. Does Market Psychology Effect Exchange Rates?
A. Market psychology influences the foreign exchange market in a variety of ways. Unsettling international events can lead to a "flight to quality", with investors seeking a "safe haven". There will be greater demand, thus a higher price, for currencies perceived as stronger over their relatively weaker counterparts

Q. What Currencies Dominate Trading in the Forex Market?
A. The U. S. Dollar and four major currencies dominate trading on the Forex market by nature of their popularity and global financial activity. Trading volumes on the Euro, Japanese Yen, British Pound and Swiss Franc account for over 80 percent of both global and North America's trading activity.

Q. Currency versus Technical Trading?
A. Investing in foreign exchange is different from most financial markets. If you buy or sell a stock, a bond or another type of investment, you are hoping that, investment and that investment only will gain or fall in value. In foreign exchange, however, if you buy or sell a currency, you are hoping that the currency will rise or fall in relation to another currency.

Q. Fundamental versus Technical Trading?
A. Fundamental analysis examines factors such as the trade balances, or money supply and its likely effect on inflation and employment. It also considers the nation's currency reserves and changes in their size, overseas assets and debts, the level of investment and the need for modernization, balance of trade, monetary and fiscal policy issues and the political and social stability of the nation. Technicians' approach trading by statistics generated by the market; you can arrive at meaningful conclusions about future prices. Price pattern charting, moving average filtration and oscillation analysis and statistical and market composition analysis are utilized t arrive at informed judgments.

Q. What About Risk Management?
A. Implementing a well-defined risk management strategy is essential to safeguarding the preservation of capital in adverse market conditions. It also ensures that adequate funds will be available to take immediate advantage of trending currency fluctuations.

Q. What is Forex Traders Philosophy?
A. Trader approach to trading is both fundamental and technical in nature. All decisions are based in the interpretation of market-generated information. He strives to maximize the ratio of potential reward to risk by entering the market only in situations where he has a statistical advantage. He consistently evaluates his techniques to determine whether he is producing desired results. He is dedicated to interacting with the markets through sound fundamental and time-tested trading methodologies.

Q. Risk and the Cost of Opportunity?
A. Trader applies the necessary trading principles, risk management techniques, and market disciplines necessary to achieve his desired goals. Trader must, beyond the contribution of funds, provide the understanding and confidence to endure the emotional ups and downs that are ever present features of the currency markets.

Q. Is the Forex Market Regulated?
A. There are no restrictions in this market. No single international authority acts as a governing body, and no government can intervene unilaterally to regulate foreign exchange practices or should there be a threat of world monetary crisis to halt trading. Traders, brokers and other participants in the foreign exchange market, voluntarily follow certain conventions, habits and practices and their investment activities, but are not accountable to any regulatory authority except their company and investors.

*Foreign Exchange Clearing House Ltd ("FXCH") services are not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. It is the responsibility of the customer to ascertain the terms of and comply with any local law or regulation to which they are subject.

Q. How Long Has The Forex Market Been Available to Private Investors?
A. Until just recently, the foreign exchange market was the exclusive domain of larger international banks, multinational corporations, financial cartels, and international money brokers and futures and options traders. The average trade at this level ranges from $1-5 million dollars and higher, certainly beyond the reach of most investors. The development of foreign exchange trading companies, such as FXCH, has provided a wider spectrum of individual investor's with access to this dynamic market. With proficiency and expertise in foreign currency trading and marketing, FXCH it's services., educates potential clients interested in currency investing, manages the trading portfolio, executes the requisite trading strategies and tactics and informs clients of portfolio results and pertinent developments in the market.