If all countries in the world use a common currency, they will be no need to understand foreign exchange! In reality, however, every country has its own currency. The foreign exchange market has emerged because of existence of different national currencies national currencies and of the need for the international transaction such as trade, investment etc. Given the large volume of international transaction, banks and trading companies need mechanism to facilitate the exchange of currencies.

There are 2 type of Forex Market

* SPOT FOREX
* FUTURE FOREX

Traders in FOREX are described collectively as the FOREX. There is however, no corresponding market place. The FOREX market is not located in a single place like stock exchanges (e.g. NYSE) or the futures market (e.g. NYCE); THAT IS, TRADING DOES NOT OCCUR ON A "FLOOR". Instead transactions are carried out by telephone, internet or telex from many separate locations, often in different cities and countries.

Many outsider think of FOREX trading as requiring arcane skills and great sophistication and this view is reinforced by the jargon used by FOREX dealer. In fact, these technical terms actually cloak some rather straight forward meanings.

We at LGL, strive to overcome the most seemingly tedious issue by highlighting the relevant elements needed in a successful FOREX transaction. Essentially, our concentration lies on 4 major currencies which are all traded against or with the U.S dollar. They are :

* British Pound Sterling
* Japanese Yen
* Swiss Franc
* Euro currencies

Foreign Exchange (FOREX) is the fastest growing and most dynamic area of the financial making, and become increasingly relevant to a wide range of people. It's activities are international using different currencies and involve high speed trading in huge of money. In reality, Forex is about trading in currencies and taking steps at the right time to protest transaction against unfavourable exchange rate movement, or capitalizing on favourable ones. Foreign Exchange Market was developed to cater for the supply of, and the demand for, different currencies by government, companies and individual, including currency speculators.

The 1980's and 1990's witness a trend to increasing the volatility in FOREX markets, which in turn created numerous opportunities daily for investors to capitalize on movements within these markets Political and Economic events are the major factors that affect currency fluctuations.

Presently, many financial institution offering professional services required a large capital outlay to initiate an investment in the Forex market, hence making this highly rewarding financial instrument inaccessible to many investors who have smaller capital outlays. However, at LGL, a New Zealand based company, you can access this high return market with a relatively small capital outlay. Just like any other form of investments, LGL, has its share of risks, without which there can be no trained staff will assist you in making the decisions with the aid of sophisticated analytical investment tools and you can feel safe that your investment is in good hands. You will also have the comfort of knowing that the ultimate decision maker is you! You can always count on personalized and friendly services from our staff.

The purpose of engaging in foreign exchange is to anticipate price fluctuation for monetary gain. For this one must be willing to assume risk in exchange for profit. Many investors choose to enter the foreign exchange trading business for the following reasons:

*	There is worldwide coverage of Social, Political and Economic news that influence exchange rates.
*	The market offers 24 hours non-stop entry and exit opportunities.
*	There is no ruling body. I.e., the market cannot be monopolized by any government, central bank or organization.
*	There is no time limit to hold position(s).
*	Instant execution of entry and exit orders. I.e., buy/sell can be done.
*	immediately upon happening of any important incident that may affect the exchange rate and this help to maximize profits or minimize losses.
*	Numerous strategies are available to protect position(s) against sudden adverse price fluctuations. eg, locking.
*	The leverage facility allows investors to earn interest on the full contract value while using a relatively small deposit.

Trading principles
Some of the most successful investors are wrong in their market opinion more often than they are right. The most important thing is when they are wrong, they accept losses quickly and willingly. But when they are right, they let their profit run and pyramid their profitable trading position(s) by increasing their open position(s).

Rules: Do not over trade. Always keep sufficient capital and hold some funds in reserve.

The following are some of the more popular and conventional investment tools available in the market today. The illustrations below are based on an investment amount or $1,000,000.

*	Real Estate Brokerage Fee of 2% = $20,000
*	Stocks & Shares Brokerage Fee of 0.75% + 0.75% ( Buy + Sell ) $20,000
*	FOREX Only on Trading = US $ 200 per roundturn

Upon careful scrutiny of the above options, it is evident that FOREX is indeed the most cost effective investment tool available today. In addition, regardless of how good or how bad the different economies are, FOREX presents ample opportunities for capital maximization.

*	The FOREX Market is never saturated, and it's provides opportunities to profit from buying at a low price and selling at a higher price or selling at a high price and then buying back at a lower price depending on whether the currency market is moving in an upward or downward trend.
*	Next to cash itself, it is the Best Form of Liquidity.
*	As illustrated above, it has the Lowest Transaction Cost
*	It is a Highly Flexible Investment tool.

There is the ability to Cut-loss and reduce loss at anytime.
The Forex Market is also the largest financial market in the world with average daily transaction estimated at US$ 1.5 Trillion. It has been shown that no single person or any central bank or any one country can affect the market. The Forex Market is governed by its own rules

FOREX

*	Two-way trading market
*	Twenty-four hour market
*	Only 1.5%-3% of the total amount traded is required as a margin deposit, to begin trading.
*	Dealing in an international market where buyers and sellers are ever present.
*	Contracts can be closed/ liquidated on same or on any other day of one's choice.
*	Interest is paid daily based on number of days the position is held in trade. Brokerage fee is based on a fixed amount per lot traded.
*	Open trading-International Market place.
*	Locking is available.

STOCK

*	One-way trading only
*	Fixed opening and closing hours
*	Full capital outlay required.
*	Need to find a buyer or seller in order to trade.
*	Dividends paid only after period of time; e.g. quarterly.
*	Brokerage fee is a fixed percentage of total value.
*	A fixed place of trading-Exchange.
*	There is no locking system.

Forex and spot trading are always conducted on margin which is the collateral for a trading position. On margin system, a cash deposit, usually much smaller than the underlying value of the currency or spot contract, is required in order to trade.

For example, a broker might require only $2,000 in the trader's account in order to trade a $200,000 currency position. The $2,000 is referred to as "margin". This amount is essentially collateral to cover any losses that you might incur. Since nothing is actually being purchased or sold for delivery, the only requirement, and indeed the only real purpose for having funds in your account, is for sufficient margin.

Margin should reflect some rational assessment of potential risk in a position. For example, if a currency is very volatile, a higher margin requirement would normally be justified. One common rule of thumb is a worst-case one day move in the market. So if a $200,000 currency position is unlikely to move by more than 1% (or $2,000) in a 24 hour period, a $2,000 margin requirement is probably reasonable. If, however, the currency or spot instrument in question is highly volatile and is likely to move by, say, $4,000 or more (or 2%, as is often the case with certain NASDAQ stocks and some commodities) it would put the broker at increased credit risk to require only a $1,000 margin deposit.

With a LGL forex and spot account, clients can never lose more than their deposited funds. Other brokers may have other policies with respect to satisfying margin requirements.

Profit and Loss for every position is shown in "real time" on the LGL online trading system. This means that clients can see P&L in their account instantly as the market moves.

Approximate pip values for the major currencies are as follows:

USD/JPY: 1 pip = $15.40; A change from 130.50 to 130.51 is worth about $15.40 per $200,000.

EUR/USD: 1 pip = $20.00; A change from 0.9050 to 0.9051 is worth $20.00 per 200,000 Euros.

GBP/USD: 1 pip = $20.00; A change from 1.4650 to 1.4651 is worth $20.00 per 200,000 Pounds.

USD/CHF: 1 pip = $11.80; A change from 1.6850 to 1.6851 is worth $11.80 per $200,000.

Interest

Trader will receive or pay an interest on an open trade held overnight on a daily basis, depending on the position. Positive carry positions (for example, long USD/JPY) result in a daily credit to the clients account. Negative carry positions (for example, short USD/JPY) result in a similar debit to the clients account.