Companies and individuals can speculate in foreign currency exchange rates (“forex”), and a number of companies are offering off-exchange foreign currency futures and options contracts to the public. If you are an investor considering participating in this market, you need a sound understanding of the market, and some solid forex futures trading tools.

The National Futures Association (www.nfa.futures.org) has a great booklet that will help educate you about off-exchange foreign currency trading. Foreign currency trading carries a high level of risk and may not be suitable for investors who are not well-prepared. In fact, you could lose all of your initial investment and may be liable for additional losses. Therefore, you need to understand the risks associated with this forex futures trading so you may make an informed investment decision. You should also understand the language of the forex markets before trading in those markets and you should have good software tools to help you make investment decisions.

NFA is quick to point out that their booklet does not suggest that you should or should not participate in the retail off-exchange foreign currency market. You should make that decision after consulting with your financial advisor and considering your own financial situation and objectives. Use the book as one component of your forex trading toolkit.

Finally, the discussion in this booklet assumes you are funding your forex account with US dollars. The principles in this booklet apply to all currencies.

We recommend The The Stealth Forex Trading System as your first and last forex trading tool.