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Forex as an investment of the future

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What is Forex, what is investing, what is the future?

Tue, Sep 8 2009, 16:17 GMT
by Joseph James Gelet

Elite E Services


Origins of Modern Finance

We must reference regulations, because regulations are the framework that the majority of finance operates in. Theories, strategies, and products, which do not fit into regulatory framework, are only hypothetical.

Financial regulations are based on a series of laws created during and after the Great Depression, such as “The Securities Act of 1933” i and “The Federal Reserve Act (of 1913)ii and others. In 1933:

Technology: The modern day computer did not exist, nor did lasers, the iPod, stealth, satellites, and most importantly, the internet

Society: Roughly 2 Billion people on the planet compared to today’s 6.7 Billion. Hitler was coming to power.

Health: Life expectancy of the average American (male and female) was 59, compared to today’s 76. Since 1980, there has been a greater than 30% decrease in deaths due to Stroke in Heart Diseaseiii, presumably due to advances in medicine.

Finance: The derivative didn’t exist, markets were not electronic and real-time, and credit cards didn’t exist, nor did check cashing and instantaneous international payment.

You wouldn’t drive an automobile made in 1933 unless you are an antique collector. Most people wouldn’t drive a car that’s more than 10 years old. Most users wouldn’t use a computer that’s more than 5 years old. Banks are using state of the art supercomputers to run a 75 year old system – with origins over 200 years old. In fact, the leading banking computer is the mainframe system IBM System Z, originally developed as System/390 in 1964iv. While the Federal Reserve Act was enacted in 1913, its origins of design are much older, as the bankers who designed the Fed were influenced by the European system, dominated by the British Bank of England, originally established in 1694v.


In this article:

  • History of Forex
  • No Forex Model
  • Purpose of Capital Markets
  • Trading as an investment
  • Modern day hedge fund is a family farm
  • Who is to blame: regulators or customers?
  • Forex Forums a form of Self-Regulation
  • The Forex Metaphor
  • Forex Systems as an investment of the future
  • 95% of people lose money trading Forex
  • Financial Education
  • Forex lacks hard data
  • Forex companies growing fast
  • Forex Genome Project
  • Forex Myths
  • Conclusion

Elite E Services  | 1201 Main Street Suite 1980 Columbia, SC 29201
http://www.eliteeservices.net/ | info@eliteeservices.net

Legal disclaimer and risk disclosure

Foreign Exchange Trading is extremely risky and is for the sophisticated investor only. Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should only invest risk capital that you can afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor.

A Qualified Eligible Person (QEP) is: an FCM, Broker/Dealer, or CPO which has been registered and active for 2 years or has greater than $5,000,000 in assets, CTA which has been registered and active for 2 years or has greater than $5,000,000 in assets, Investment adviser which has been registered and active for 2 years or has greater than $5,000,000 in assets, Qualified Purchaser, Knowledgeable Employee, CPO, CTA, IA for the exempt pool or account, Principal of CPO, CTA IA for the exempt pool or account , Employee of CPO, CTA, IA for the exempt pool or account involved in investment activities for 1 year , Employee or agent of CPO, CTA, IA for the exempt pool or account involved in legal, accounting, auditing or financial services activities for 2 years and is an accredited investor (see note below), Trust not formed to invest in exempt pool or account with trustee being a QEP, Organization described in Sec. 501(c)(3) of the Internal Revenue Code with trustee being a QEP, Non-U.S. person or entity, An entitiy in which all participants are from any of the above groups, 4.5 entity with all QEP investors. The following qualifies as a QEP if portfolio requirements are met: Registered investment company, Bank, Insurance company, Plan, with greater than $5,000,000 in assets, for employees of a state or political subdivision, Employee benefit plan with greater than $5,000,000, Private business development company, Organization described in Sec. 501(c)(3) of the Internal Revenue Code with greater than $5,000,000 in assets, Corporation, trust, partnership with greater than $5,000,000 not formed to invest in exempt pool, Person with net worth greater than $1,000,000, Person with net income greater than $200,000 each of last 2 yrs. or greater than $300,000 when combined with spouse, Pool, trust separate account, collective trust with greater than $5,000,000 in assets, Certain governmental entities. Note: May also include spouse, child, sibling or parent if investment is made with knowledge and direction or a company, estate or any person acquiring participation by gift, bequest, separation or divorce from one of these persons.  Portfolio Requirement: The client must own securities with a market value greater than $2,000,000 and have had on deposit at an FCM, in the last 6 months, greater than $200,000 in margin and option premiums, have a combination of securities and FCM deposits. The percentages of required amounts must = 100%. From www.dynamicriskstrategy.com SPECIFIC FOREX RISK DISCLOSURE STATEMENT: BEFORE PROCEEDING, YOU MUST READ AND ACKNOWLEDGE THE FOLLOWING DISCLOSURE The risk of loss in trading foreign exchange markets (FOREX), also known as cash foreign currencies, the inter-bank market or the FOREX markets, can be substantial. You should therefore carefully consider whether such trading is suitable for you given your financial condition. Elite E Services does not control, and cannot endorse or vouch for the accuracy or completeness of any information or advice you may have received or may receive in the future from any other person not employed by Elite E Services regarding foreign currency trading or any managed account information. The factual information contained herein has been obtained from sources believed to be reliable but is NOT necessarily all-inclusive and is NOT guaranteed to be 100% accurate. The content herein is provided on a best efforts basis and is believed to be up-to-date and accurate; however, there are no explicit or implicit warranties of accuracy or timeliness made by Elite E Services or affiliates. FOREX trading involves substantial risk and is not for all investors. Investments or trading in the FOREX markets can be highly speculative and should only be done with risk capital which you can afford to lose and that, if lost, would not change or adversely affect your lifestyle. The high degree of leverage that is often possible in foreign exchange trading can work for you as well as against you. The use of leverage can lead to large losses as well as gains. Managed foreign exchange accounts can be subject to substantial charges for management and profit incentive Elite E Services, and in some cases introducing brokers’ commissions or mark-ups that are above and beyond the ordinary spread generally provided on a clearing firm’s trade execution platform. It may be necessary for those accounts that are subject to these charges to make substantial trading profits to avoid depletion or exhaustion of their assets. Performance results may vary due to account size, starting or closing date, the number of positions and/or markets traded and/or other factors. This brief statement cannot disclose all of the risks and other significant aspects of the foreign exchange markets. Therefore, you should carefully review the disclosures contained in this document to determine whether such trading is appropriate for you in light of you particular financial condition. There are also risks associated with utilizing an internet-based deal execution system software application, and computerized trading and money management tools including, but not limited to, the failure of the hardware and software. PAST PERFORMANCE DOES NOT NECESSARILY GUARANTEE FUTURE RESULTS, nor does it guarantee freedom from losses. The information contained herein should not be construed as an offer to buy or sell commodities, futures, securities, or any type of investment. Elite E Services highly recommends that before making a decision, the reader collects several opinions related to the decision and verify facts from several independent sources. ADDITIONAL WEB DISCLAIMER:  ALTHOUGH IT IS POSSIBLE TO PROFIT BY TRADING FOREIGN EXCHANGE, IT IS ALSO POSSIBLE TO LOSE 100% OF YOUR DEPOSIT.  THERE IS A HIGHER PROBABILITY OF LOSING VS. WINNING GIVEN ENOUGH TIME. FOREIGN EXCHANGE TRADING IS EXTREMELY RISKY AND IS ONLY FOR THE SOPHISTOCATED INVESTOR WITH AN ABOVE AVERAGE UNDERSTANDING OF CURRENCY MARKETS.  RISK CAPITAL SHOULD BE USED WHEN TRADING FX SYSTEMS, DEFINED AS CAPITAL THAT ONE CAN AFFORD TO LOSE 100%.  ANY INVESTOR MUST CONSIDER THE RISKS OF FOREX TRADING AND DETERMINE IF IT IS APPROPRIATE FOR HIM or HER.  THIS WEBSITE IS NOT A SOLICITATION TO INVEST IN FOREIGN EXCHANGE SYSTEMS, THIS WEBSITE DOES NOT RECOMMEND ANY PARTICULAR INVESTMENT. DRS is available to QEP's only. A Qualified Eligible Person (QEP) is: an FCM, Broker/Dealer, or CPO which has been registered and active for 2 years or has greater than $5,000,000 in assets, CTA which has been registered and active for 2 years or has greater than $5,000,000 in assets, Investment adviser which has been registered and active for 2 years or has greater than $5,000,000 in assets, Qualified Purchaser, Knowledgeable Employee, CPO, CTA, IA for the exempt pool or account, Principal of CPO, CTA IA for the exempt pool or account , Employee of CPO, CTA, IA for the exempt pool or account involved in investment activities for 1 year , Employee or agent of CPO, CTA, IA for the exempt pool or account involved in legal, accounting, auditing or financial services activities for 2 years and is an accredited investor (see note below), Trust not formed to invest in exempt pool or account with trustee being a QEP, Organization described in Sec. 501(c)(3) of the Internal Revenue Code with trustee being a QEP, Non-U.S. person or entity, An entitiy in which all participants are from any of the above groups, 4.5 entity with all QEP investors. The following qualifies as a QEP if portfolio requirements are met: Registered investment company, Bank, Insurance company, Plan, with greater than $5,000,000 in assets, for employees of a state or political subdivision, Employee benefit plan with greater than $5,000,000, Private business development company, Organization described in Sec. 501(c)(3) of the Internal Revenue Code with greater than $5,000,000 in assets, Corporation, trust, partnership with greater than $5,000,000 not formed to invest in exempt pool, Person with net worth greater than $1,000,000, Person with net income greater than $200,000 each of last 2 yrs. or greater than $300,000 when combined with spouse, Pool, trust separate account, collective trust with greater than $5,000,000 in assets, Certain governmental entities. Note: May also include spouse, child, sibling or parent if investment is made with knowledge and direction or a company, estate or any person acquiring participation by gift, bequest, separation or divorce from one of these persons.  Portfolio Requirement: The client must own securities with a market value greater than $2,000,000 and have had on deposit at an FCM, in the last 6 months, greater than $200,000 in margin and option premiums, have a combination of securities and FCM deposits. The percentages of required amounts must = 100%.

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Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts.

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