What investors should know about foreign exchange

What investors should know about foreign exchange

Those in pursuit of returns, or a way to hedge investment exposures, may find the necessary portfolio balance in the forex market


ORLANDO, Fla., Jan. 28, 2013 /PRNewswire-HISPANIC PR WIRE/ — The global economy is still trying to recover from the 2008 crash as we grapple with setbacks like the U.S. fiscal cliff and the ongoing European debt crisis. Meanwhile, investors battle to find worthwhile returns on their money.

But the U.S. Federal Reserve has pledged to keep interest rates at an all-time low for the foreseeable future, squeezing returns on bonds and fixed-income instruments. And the manic-depressive bull market in stocks is making equities investments look somewhat muddled.

Given the current financial landscape, it’s only natural for private investors who actively manage their portfolios to explore foreign exchange, or forex, as a viable investment.

Forex trading for a balanced portfolio

“Forex lets you diversify your portfolio or hedge current holdings to better manage overall market exposure,” says Alfonso Esparza, who is a senior currency strategist with OANDA, a global foreign exchange services firm. “While not for the faint of heart, investors with greater risk tolerance may find that forex offers attractive benefits.”

As Esparza points out, forex is the largest market in the world, estimated in the latest Bank for International Settlement (BIS) survey to account for more than US$4 trillion in daily turnover – bigger than both the NASDAQ and New York Stock Exchange combined. Such massive trading volume tends to create significant price swings throughout the day, which results in volatility and, therefore, more opportunities for investors.

Volatility, however, is a double-edged sword that can also lead to large losses for traders failing to manage their open positions.

Trader education: learn about forex market fundamentals

“If you accept the risks inherent in a volatile market like forex, and you’re prepared to study the fundamentals and learn about what moves exchange rates, the upside potential can be enormous,” Esparza says. “But anyone who believes trading forex requires little effort or is an easy way to make money will soon find the opposite is true.”

Does forex fit your investment style and your risk appetite? Esparza says a good way to find out is to open a free OANDA demo trading account, which comes with $100K of virtual money to use for practice. “An OANDA demo account gives you real prices and real spreads, but you trade without risking real capital,” he says. “It’s the same sophisticated trading system as a live OANDA trading account so it provides a good practice environment for testing out different strategies.”

Built with patented market-making and risk-management technology, OANDA’s trading platform is unique for offering immediate execution (other brokers take two business days to settle trades), and flexible lot sizes (the ability to trade in single-dollar amounts allows more control over how much capital is at risk per trade). As well, OANDA provides a suite of free forex market analysis tools to help traders make more informed decisions.

Esparza is presenting an opportunity to learn more about forex trading at the upcoming World MoneyShow Orlando. The event runs from Wednesday, January 30 to Saturday, February 2 at Orlando’s Gaylord Palms Resort and Convention Center. His seminar for beginner traders is happening on Friday, Feb. 1 at 9:45 a.m. This hands-on lesson from Esparza will explain how to use fundamental analysis to understand the global currency market.

Register to attend the World MoneyShow Orlando event and attend Esparza’s presentation on forex trading, and learn how this emerging asset class may be a fit for your investment portfolio.

Note to Editors:



OANDA Corporation has transformed the business of foreign exchange through an innovative approach to forex trading. The company’s leading online trading platform, fxTrade, introduced a number of firsts to the marketplace, including immediate execution; instant settlement on trades; trades of any size between one unit and 10 million units; and interest calculated by the second. The company’s many awards attest to the power and flexibility of its trading platform. In 2012, OANDA was named “Best Forex Provider” by the Financial Times and by Investors Chronicle; “Best FX Broker” by Forex Magnates; and was recognized by Investment Trends Singapore as providing “Best Value for Money” and “Highest Overall Client Satisfaction”.

OANDA was the first online provider of comprehensive currency exchange information, and today the company’s OANDA Rate® data are the benchmark rates for corporations, auditing firms, and global banks.

OANDA has six offices worldwide, in Chicago, London, Singapore, Tokyo, Toronto, and Zurich. OANDA is fully regulated by the U.S. Commodity Futures Trading Commission (CFTC), the U.S. National Futures Association (NFA), the Monetary Authority of Singapore (MAS), the Investment Industry Regulatory Organization of Canada (IIROC), the UK Financial Services Authority (FSA), and the Japanese Financial Services Agency (FSA).

CONTACT: Melissa Barrero, +1-646-395-6330, melissa.barrero@cognitomedia.com

SOURCE OANDA Corporation

What investors should know about foreign exchange