• In short, what is the forex market?

• What is traded on the forex market?

• Who are the main forex market players?
• Is there a central exchange for forex trading?
• What are the main currencies traded on the forex market?
• What determines the price of a currency?
• When are currencies traded on the forex market?
• What is a Spot market?
• How much does trading the forex market cost?
• What is long/short?
• What does margin trading mean?

What is Foreign Exchange?

Where is the central location of the Forex Market?

Who are the participants in the Forex Market?

When is the Forex market open for trading?

What are the most commonly traded currencies in the Forex markets?

Do you need a lot of money to trade currencies?

What is Margin?

What does it mean have a 'long' or 'short' position?

How can I get familiar with terms such as "bid, "ask", "spread," etc.?

What is the difference between an "intraday" and "overnight" position?

What affects the prices of currencies?

How do I manage risk when I trade currencies?

What kind of trading strategy should I use?

How frequent do people trade currencies?

How long are positions maintained?

What is a Market Maker?

(Lexical)A Market Maker is the counterparty to the client. The Market Maker does not operate as an
intermediate or trustee. A Market Maker performs the hedging of its clients' positions according to its policy,
which includes offsetting various clients' positions, hedging via liquidity providers (banks) and its equity
capital, at its discretion.

Who are the Market Makers in the Forex industry?

Banks, for example, or trading platforms (such as Easy-Forex™), who buy and sell financial instruments at
the market. That is contrary to intermediates, which represent clients, basing their income on commission.

Do Market Makers go against a client's position?

By definition, a Market Maker is the counterparty to all its clients' positions, and he always offers a two-sided
quote (two rates: BUY and SELL). Therefore, there is nothing personal with the trading conduct between the
Market Maker and the customer. Market Makers regard the total positions of their clients as a whole, same
goes for banks and other market makers in the Forex market. They offset between clients' opposite
positions, and hedge their net exposure according to authorities' guidelines and their risk management
policies.

Do market makers and clients have a conflict of interest?

Market makers are not intermediates, neither portfolio managers, nor advisors who represent customers
(while earning commission), but rather they buy and sell goods to the customer. By definition, the Market
Maker always provides a two-sided quote (the sell and the buy price), hence maintains neutrality as for the
client. Banks do that, same with merchants in the markets, who buy goods and sell it to customers. The
relationship between the trader (the customer) and the Market Maker (the bank; the trading platform; Easy-
Forex™; etc.) is simply based on fundamental market forces: supply and demand.

Can a Market Maker influence market prices against clients' position?

Definitely not, because the Forex market is the nearest to being a "perfect market" (as defined by economics
theory). This is the biggest market today, reaching a daily volume of 3 trillion dollars throughout the globe.
That means that there is no single participant in the market, banks and governments included, who can
consistently push the price in a certain direction.

What is the main source of earnings to Easy-Forex™?

Being a Market Maker, the major source to earnings is the spread between the bid and the ask prices.
Accordingly, Easy-Forex™ maintains neutrality (as for the direction of any or all deals made by its traders),
since the leading source for its income is the spread it earns.

How do Market Makers manage their exposure?

The way most Market Makers hedge their exposure is to hedge on bulk. They aggregate all clients' positions
and pass some, or all, of their net risk to their liquidity providers. Easy-Forex™ hedges its exposure in a
similar fashion, in accordance to authorities' instructions and its risk management policy.
As for liquidity providers, Easy-Forex™ works in cooperation with world's leading banks which provide
liquidity to the Forex industry: UBS (Switzerland) and RBS (Royal Bank of Scotland).
1 Does the financial system matter for economic growth?

2 The financial system of the euro area after two years with the euro

3 What is the role of monetary policy and central banks?

4 What are the Most Commonly Traded Currencies in the Forex

Markets?

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.