Currencies are traded every day for numerous reasons. For example:

Consumers typically come into contact with currency exchange when they travel. They go to a bank or currency exchange bureau to convert one currency (typically, their "home currency") into another (i.e. the currency of the country they intend to travel to) so they can pay for goods and services in the foreign country.

Businesses typically have to convert currencies when they conduct business outside their home country. For example, if they export goods to another country and receive payment in the currency of that foreign country, then the payment must often be converted back to the home currency. Similarly, if they have to import goods or services, then businesses will often have to pay in a foreign currency, requiring them to first convert their home currency into the foreign currency.

Commercial and Investment Banks trade currencies as a service for their commercial banking, deposit and lending customers. These institutions also generally participate in the currency market for hedging and proprietary trading purposes.

Governments and Central Banks trade currencies to improve trading conditions or to intervene in an attempt to adjust economic or financial imbalances. Although they do not trade for speculative reasons, they are a non-profit organization; they often tend to be profitable, since they generally trade on a long-term basis.

Investors and Speculators require currency exchange whenever they trade in any foreign investment, be that equities, bonds, bank deposits, or real estate. Investors and speculators also trade currencies directly in order to benefit from movements in the currency exchange markets. They are attracted to currency trading for numerous reasons, including (i) the size and daily volatility of the market (ii) the almost perfect liquidity of the Foreign Exchange Market, (iii) the fact that the Foreign Exchange Market is traded 24 hours a day.

The surge in trading levels indicates that foreign exchange is becoming increasingly well established as an asset class in its own right as an alternative to stocks and bonds.

The Managed Forex Account Program, offered by Forex Advisors, accommodates those who wish to allocate a portion of their risk capital to the foreign exchange markets but are either unable to watch the markets 24 hours a day or prefer to have their risk capital managed by professionals.

At Forex Advisors, we stand ready to assist you at any time.

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