Foreign Exchange.........

Recently there has been some media coverage on the pitfalls of small investors to be "day-traders" in the foreign currency exchange markets. The slick ads you hear and see on television are just that. Slick to allow for a faster separation between day traders and their money. I had the pleasure of reading Victor Neiderhoffers timely retort to those who engage in such activity and thought it worth sharing. I have never traded in the FOREX markets and have no intention to do so between now and forever.

"I have found that the best way to analyze the dollar/yen, dollar/euro, Southeast Asian currencies, the rand and the other components of the baskets generally used to track the movements of foreign exchange is that whichever way you have a position, the markets will move in an opposite way, as the banks would have that position and the banks at the end of the year must make $50 billion-$75 billion a year on their trades. So every dollar you invest must be dissipated at a proper rate into their firmament whilst leaving you with hope. I could elaborate further concerning the bid-ask spread, the running of stops, and the total irrelevance of which side you take. Victor Neiderhoffer"