Over the weekend as I was channel surfing, I saw an infomercial for a free 4X Made Easy workshop. I have read a little about Forex (short for Foreign Exchange). Basically it involves the trading of currencies. You know how when you go to Canada, or some other country, there is an exchange rate. Forex trading is buying foreign currency when it is cheap versus the dollar, and selling it when it goes up.
So I decided to go to one of the free workshop. They had four of them. One of them was Tuesday evening, but I didn’t want to skip karate class. I have a bunch of vacation time at my work saved up, and my wife has none, so I decided to use half a day PTO, and go to one of the morning seminars. They did do registrations, but would fit as many people as they could. So I showed up early. Way earlier than I needed to. The seminar was scheduled for 9am, and they didn’t start doing registration until 8:30. So I waited till 8:30, signed up, then waited some more. They had software boxes on the table with price stickers of $3,995. (I guessed that this would be reduced) At 9am, the doors opened.
Of course, there were the usual warnings about no recording, though this time they said without written authorization.
The presenter spoke at a hyperactive pace. He also liked to use call & response audience participation techniques. The slide behind him displayed various stuff that looked like credentials, but I am not sure what they were. One was a NASD Ser., follow by a bunch of numbers.
At the beginning of the workshop there were about 16 people, but a few more showed along the way.
He briefly discussed the history of the Forex market. About how Nixon took the US off of the gold standard. And how some 1998 act opened the forex market to small individual investors.
4x Made Easy deals with 7 major currencies, and 6 major pairs. The currencies it tracks are Canada (CAD), European (EUR), Britain (GBP), Suisse (CHF), Japan (JPY), Australia (AUD), and USA (USD). The 6 major pairs are USD/CAD, EUD/USD, GBP/USD, USD/CHF, USD/JPY, and AUD/USD. The two sides of the pairs are called the base, and the cross. The base is the one that is bought and sold.
Then he talked about PIPs. A PIP is a Price Interest Point. So if the exchange rate of two currencies goes from 1.1500 to 1.1501, the change is 1 PIP. Currency is traded in lots of of $100,000. so a lot is $100,000. So 1 lot times 1 PIP works out to $10.
Then he talked about leverage. Leverage is basically borrowed money. In the Forex market, $1000 controls one lot. So that works out to 100:1 leverage. He then showed us an example of a trade the previous week that made $800 from an investment of $1000, just over 4 hours.
If $1000 was too much, there are mini-lots. There are 1/10th the size of a lot, or $10,000. So $100 controls a $10,000 lot.