World Finance
2006

If I held up a mirror to the currency foreign exchange trading market, the reflection back to me would be a growing gamut of Forex traders with diverse demographics. This is because the Forex market is the largest financial market in the world with over $1.9 trn in foreign currencies changing hands every day. Considering this depth and breadth, you might expect the forex trader population to be a melting pot of people from a variety of backgrounds.

Here in the United States, this lucrative market was traditionally reserved for the big banks and the big boys. Individual US citizens were not able to trade foreign currencies before 1999 but with the change in federal law and regulation by the Commodities Futures Trading Commission in 2000, all this began to change.

US traders have discovered what Asian and European traders have known for a long time – that the “average” person can do well in forex trading. Forex is entering more and more home offices, small, independent money management firms and the lives of men and women every day. In fact, currency trading by individuals in the United States is growing by about 50 percent a year.

Widespread availability of high-speed internet access is another factor that has leveled the playing field between the establishment and the small traders. Today, with the easy download and install of a trading platform that provides access to real-time currency prices, a demo or test account to begin and train with, as well as charting and technical analysis assistance, traders from varied walks of life can participate. And it doesn’t require a small fortune to get started. In fact, you can find everything you need for free on the internet.

My friend and fellow trader Ed Ponsi, who is also president of FXEducator says forex trading is for ‘anyone and everyone’. Mr. Ponsi, who is also a money manager and consultant, continues, “Trading is so democratic now. Anyone can learn how to trade with the opportunities that are available today. There is so much money out there now, with the huge influx of capital into hedge funds, that anyone with a good track record and the right mental attitude can get a piece of the action.”

It is with that brand of encouragement from forex advocates like Mr. Ponsi that even novice traders are diversifying their portfolios by entering the forex market. Male and female, single or married with children, work-at-home moms, 43 year old males with over 20 years of trading experience; they are all taking the initiative to trade forex.

My firm, Interbank FX, is seeing men and women, old and young, from all over the world become forex traders. We have customers in over 120 countries and are opening over 30,000 demo accounts per month. All of our business is done over the internet and on the internet; no one knows that you’re not a member of the old guard.

Some of our customers are women who supplement their household income by making small trades a few hours a week. I also know of college students and recent graduates who have jumped into forex because it offered them an opportunity to expand their already independent, technology savvy lifestyle with a small startup fund, as little as $250 gets them started.

“I think today’s trader is a tech-savvy, independent thinker, the kind of person who takes the initiative,” says Mr. Ponsi. “Traders have always been an independent breed, with little patience for the constrictions of the nine-to-five job. Today’s technology gives them the means to raise the level of their knowledge as high as they desire, without limits.”

Another fellow forex trader, 25-year old Chris Murdock, who has been trading for three years sees that “the potential is certainly there” for people of his age to invest in FX. “I think people are being exposed to a form of investment that was not readily available until fairly recently,” Mr. Murdoch says. “It seems that previously only people that had a large amount of capital could invest in FX. It’s (forex) getting away from the pressed suit, tie wearing business types. It’s moving to more ‘normal’ people. The guy working in the car garage, working the cash register at the grocery store, or even your taxi driver could be a forex trader.”

The forex market will continue to grow, not just with the world’s economies of currency, but with the diversity of traders it has already shown it possesses.

Futures Magazine
2006

It is no secret that the Foreign Exchange market, or Forex market, has become a hot topic for retail investors over the course of the last few years. And while it is true that the Forex market has many appealing qualities for the retail investor, there are many dangers as well.

So many traders come into the Forex market with false expectations. They have unrealistic ideas regarding profit potential and they lack or are unaware of the discipline required for trading. Short term trading is not an amateur’s game and it is not usually the path to riches or financial freedom. If you only have a small amount to invest and you have limited experience with currency trading then the Forex market may not be the place for you.

Still this isn’t enough to dissuade hundreds and most probably thousands of people from opening new Forex trading accounts every single month. This current popularity can be a double edged sword for Forex brokers. Quite a number of new people are being brought into the market by the lure of quick riches. However, many of these new clients open accounts, quickly lose the bulk of their investment and become disgruntled with their broker and the market in general. Had some of these people been better informed of the risk associated with the Forex market and had they spent a little more time educating themselves the outcome may have been very different.

There are many companies out there willing to help an investor get started trading in the Forex market. This can make it difficult for the average investor to choose a broker that will suit their needs. As with any investment, it is in your best interest to do your homework and ask questions. Once you have narrowed your selection down to the 3 or 4 brokers that meet your standards and provide the services you require, download their demo trading platforms. It should leave you, at the end of the demo trial, with a broker that meets your requirements and makes you feel comfortable.

Another resource not to be overlooked is your local Forex user group. Many cities are now homes to these groups and they are good places to get started if you are serious about getting into this market. If you don’t find one in your city, there are plenty of online user groups to become a member of.

Look for a place where honest is encouraged and respected but being disrespectful, flaming, and blatant spamming or advertising is dealt with quickly and efficiently. These groups tend to be great support mechanisms for beginning traders.