Additionally, Forex trading with us is done on a margin system, essentially using a free short-term credit allowance used to purchase an amount of currency that greatly exceeds the traders account value

Understanding the Margin System
Trading currencies on margin lets you increase your buying power. Here’s a simplified example: If you have $2,000 cash in a forex margin account that allows 1:100 leverage, you could purchase up to $200,000 worth of currency-because you only have to post 1% of the purchase price as collateral. Another way of saying this is that you have $200,000 in buying power.

You are probably wondering how a small investor can trade such large amounts of money. Think of your broker as a bank who basically fronts you $100,000 to buy currencies and all he asks from you is that you give him $1,000 as a good faith deposit, which he will hold you for but not necessarily keep. Sounds too good to be true? Well this is how forex trading using leverage works. Read more…

The dollar has fallen for much of this decade, and lately the decline is picking up speed. Already down more than 15% against the euro since March, the buck is expected to sink another 10% by the first quarter. Usually, when a once-strong asset falls this far out of favor, the correct long-term strategy is clear: Be a contrarian and buy.

But the dollar isn’t an asset — it’s a vehicle through which investments are made. And the fact that investors around the world are buying more and more non-U.S. assets suggests that the dollar will keep falling. Read more…

Exchange traded funds are collective investment vehicles which track indices – they can allow low cost exposure to the performance of an index as quickly and efficiently as the most liquid stocks.

Exchange traded funds (ETFs)  are listed on an exchange and can be traded intraday. Investors can buy or sell shares in the collective performance of an entire stock or bond portfolio as a single security. Exchange traded funds add the flexibility, ease, and liquidity of stock trading to the benefits of traditional index fund investing.

Exchange-traded funds (ETFs) are increasing in popularity, as they are often responsible for approximately 50% of the daily trade volume on the American Stock Exchange (AMEX). ETFs are passive funds that track their related index and have the flexibility of trading like a security. They are managed by professionals and provide the investor with diversification, cost and tax efficiency, liquidity, marginability, are useful for hedging, have the ability to go long and short, and some even provide quarterly dividends. Read more…