What Every Investor Should Know
Foreign currency exchange rates, commonly known as "forex," are the costs to exchange one country's currency for another country's currency. Since currency exchange rates fluctuate, traders can participate in the forex market as speculators (individuals
and companies who buy and sell foreign currencies) hoping to profit from changes in the currency rates.
No matter how it may be promoted, forex trading is a risky endeavor and may not be suitable for every investor. Like any investment, forex investments can be subject to abuse. Some promoters profit by charging high commissions or selling investment strategies.
Others claim to have complex algorithms or propriety software programs that allow them to beat the market, which really don't work or don't exist.
Unlike forex dealers, individuals and companies that solicit retail accounts for forex dealers and manage those accounts, may not have to be regulated or affiliated with a regulated company, which exposes the investor to additional risk.
Obtain important background information about forex dealers and their salespeople from the National Futures Association (NFA) at www.nfa.org. As part of your due
diligence, read more about forex investments and the questions you need to ask before you invest.