WHAT IS FOREIGN EXCHANGE
Simply put is the
concurrent buying of one, and selling of another currency.
The Foreign Exchange market is
the largest and most liquid market in the world, with daily
volumes exceeding $1.4 trillion. To put this numbers into
perspective, the estimated annual turnover in the stock
markets is currently 21 trillion U.S. dollars per year
compared with the same turnover in just 16 days on the
foreign currency exchanges.
The FOREX market has no
physical location or central exchange. It is in fact an
over-the-counter market operating through an electronic
network where individuals trade one currency for another. FX
trading takes place in all the major financial centers
worldwide, including New York, London, Frankfurt, Sydney and
Tokyo. This global 24 hour trading activity creates one
interconnected, international market, resulting in
unparalleled liquidity. The FX market is the perfect market
for the active trader.
The majority of the global foreign exchange trading takes
place in the Interbank market. The Interbank market is the
unregulated international trading of foreign currencies
between banks, and is what determines the foreign exchange
rates. Due to the fact there are no regulations, price
manipulation, wide spreads and gaps of liquidity plus a number
of other abuses created an uneven playing field. This resulted
in making it extremely difficult for the smaller institutions
and retail client to participate in the FOREX market.
To alleviate some of the concerns regarding the lack of
regulation in the FOREX market, COES has chosen to become a
member of the National Futures Association (NFA) and is
registered with the Commodities Futures Trading Commission
(CFTC). All NFA members are audited on a regular basis.
The NFA’s timing and frequency vary depending upon a number of
factors, including the amount of money a firm has under
management, customer complaints received, or concerns noted
during their review of Disclosure Documents or financial
statements filed with NFA.
NFA audits are the cornerstone of a self-regulatory process
that continues to benefit the futures industry by creating
investor confidence and market liquidity. Over the years, NFA
has refined its approach to examinations to make them as
efficient as possible, while maintaining high internal quality
standards and addressing changing industry rules and
Until recently the only way an
investor was able to gain access to the foreign exchange
market was through banks that transacted large amounts of
currencies for commercial and investment purposes. Now, with
the COES Level 1™ Trading Platform and COES Electronic
Currency Network, anyone can trade in the FOREX market. COES
enables the smaller institutions, and investors access to
liquidity provided by the Interbank market as well as all
participants on the network.
COES Level 1™, provides day-traders, fund managers, and
institutional investors alike with the ability to profit from
the benefits of FOREX trading. COES brings FOREX trading to
the retail client.