4X TECHNICIAN
FOREX MARKET
FOREX HISTORY
PFG
SYSTEM REQUIREMENTS

4X TECHNICIAN

1. What is FOREX? - FOREX is the acronym for the foreign exchange market, where one country’s currency is exchanged for that of another country through a floating-exchange-rate system. The FOREX is the world’s largest and most liquid financial market, with a current estimated exchange average of between $1.5 trillion and $2 trillion per day. Compare this to the total average value of global equity trading at $25 billion daily.

2. What Regulation and Oversight is in place for FOREX? - After the FOREX market opened up to the public as an investment option, and as its popularity began to increase, the Commodity Futures Trading Commission (CFTC) and National Futures Association (NFA) stepped in to monitor the FOREX market. The CFTC and NFA increased registration requirements and provide a high degree of regulation – thereby adding stability to the market and giving investors more confidence in trading FOREX.

3. How does the FOREX Market work? - Trading takes place in financial centers all over the world, including New York, London, Hong Kong, Singapore, Frankfurt, Tokyo, and many others. These financial centers are linked to one another in a unified, cohesive, international market, so at any given time, around the clock, there’s a major financial center open where banks, hedge funds, international corporations, and individual speculators all over the world are active participants. Most FOREX activity consists of the spot business between the U.S. dollar and the six major currencies (Japanese Yen, British Pound, Swiss Franc, Canadian Dollar and Australian Dollar) The market is run electronically, within a network of banks, continuously over a 24-hour period, opening Sunday at 5pm (EST) and closing Friday afternoon at 4:30pm (EST).

4. Who are the participants in the FOREX Market? - The FOREX market is called an 'Interbank' market due to the fact that historically it has been dominated by banks, including central banks, commercial banks, and investment banks. However, the percentage of other market participants is rapidly growing, and now includes large multinational corporations, global money managers, registered dealers, international money brokers, futures and options traders, and private speculators.

5. How are currency prices determined? - Currency prices are affected by a variety of economic and political conditions, most importantly interest rates, inflation and political stability. Moreover, governments sometimes participate in the FOREX market to influence the value of their currencies, either by flooding the market with their domestic currency in an attempt to lower the price, or conversely buying in order to raise the price. This is known as Central Bank intervention. Any of these factors, as well as large market orders, can cause high volatility in currency prices. However, the size and volume of the FOREX market makes it impossible for any one entity to "drive" the market for any length of time.

6. How do investors develop a trading strategy? - Currency traders make decisions using both technical factors and economic fundamentals. Technical traders use charts, trend lines, support and resistance levels, and numerous patterns and mathematical analyses to identify trading opportunities, whereas fundamentalists predict price movements by interpreting a wide variety of economic information, including news, government-issued indicators and reports, and even rumor. The most dramatic price movements however, occur when unexpected events happen. The event can range from a Central Bank raising domestic interest rates to the outcome of a political election or even an act of war. Nonetheless, more often it is the expectation of an event that drives the market rather than the event itself.

7. What is the 4x Desktop Trading Solution? (4XT DTS) – This is a FREE proprietary system available through our web site to the FOREX community. The products, services, partnerships, and technology available through 4XT DTS are described in this FAQ Section and available in the web site.

8. Why should I use the 4XT DTS? – Our products and services are tailored to meet the needs of both the experienced and new or inexperienced FOREX trader. As a user, you can feel secure knowing you are doing business with one of the leading providers of FOREX products and services. We do this by providing state of the art products (RANE) that you won’t find anywhere else combined with the technology to deliver that product to you in light speed efficiency (ADTS).

9. What is the 4XT DTS? – This is a FREE download to your system. It provides trade alerts in real time directly to your desktop. It is your gateway to your account, systems, services and information that any FOREX investor wants and needs.

10. What is the Reactance Analytic Neuro-Engine? (RANE) – The Reactance Analytic Neuro-Engine (RANE) is an alert system you can subscribe too. This alert service identifies specific buy/sell trading opportunities across all of the major FOREX markets. RANE does what humans cannot--it processes HUNDREDS OF MILLIONS of data signal combinations every 15 minutes to determine the best possible trading opportunity in the FOREX market given any economic or market environment.

11. How much does it cost to subscribe to RANE? – You can subscribe to RANE for $179.99 a month.

12. What is the methodology that RANE uses? – RANE tracks the combination of 18 FOREX pairs, 32 independent indicators and 470 degrees of market magnification. That’s 270,000+ competing trading opportunities that results in over ONE HUNDRED MILLION PLUS combinations reviewed and updated every 15 minutes. Yet, RANE goes one major step further. It rates the performance of every combination and then selects and alerts traders to the best trading opportunities. Amazingly, RANE does all of this without any historical optimization of market data.

13. How often are trades made? - RANE dictates trading activity on any given day. The system looks to optimize opportunities. The system does not trade just to trade, on average it trades five times a week.

14. How long are positions maintained? - RANE liquidates all positions held on Friday prior to the close of the market.

15. What is the Reactance? - Reactance logic is based on heuristic processes designed to minimize selection criteria, decision “cues” and processing turn around time. It is a technology developed to monitor and control large, complex systems. Reactance core logic is generic and has been applied to many other complex system monitoring and control problems. While there are many diverse applications for this technology, it has become the solution to your trading dilemma. It is our strategic partnership with Trade Spectrum, Inc. that has resulted in RANE.

16. How do I manage risk? RANE has stop loss trade termination logic that contributes to overall results and proper risk management.

17. Who is Trade Spectrum? - Trade Spectrum, Inc. is the company that developed the revolutionary computer technology for investment decision-making, using Reactance©.

18. What is the Automated Desktop Trading Service? (ADTS) – This product allows you to have trade alerts executed in real time and automatically by PFG. Our strategic partnering with Peregrine Financial Inc. (PFG) and expertise in technology and systems has resulted in the development of this service. Now you can have the best of both worlds, you can subscribe to our Reactance Analytic Neuro-Engine (RANE) trade alerts and have those same trade alerts executed by PFG and at the same delivered to your desktop all in real time.

19. How much does it cost to subscribe to ADTS? – You can subscribe to ADTS for $19.99 a month. However, you MUST have an account with Peregrine Financial Group, Inc. in order to subscribe and use this service.

20. Do I need to open an account with PFG? Yes, in order to use ADTS you will need to open an account with PFG.

21. What is the minimum deposit required with PFG to participate in our system? $5,000.00 is the minimum deposit required to trade with our system.

22. How do I fund my PFG account? Please go to http://www.pfgBest.com/fund/

23. When will my funds be posted to my account? The time it takes for a deposit to post to your account will depend on the method in which is sent:

Personal Checks - 5 to 7 business days

Cashiers/Bank Checks - 1 business day after receipt

Wire - within 24 hours of receipt

Foreign Checks/Wires - Within 24 hours of receipt

24. How do I know if my account has been opened? You will receive an email with your username, password and instructions for accessing your account. Once your account paperwork has been approved and initial funds have been posted you will have access to your account.

25. Who has access to my funds? You are the proprietor of this account and the only one who can make deposits to or withdraw funds from this account. Your funds remain in your in your trading account in your name at Peregrine Financial Group, Inc. The only power you grant us is the power to trade your account through the Power of Attorney.

26. Is this Power of Attorney permanent? No. You can revoke the Power of Attorney at any time you wish.

27. If I wish to withdraw funds from my account, when can I do so and are there any penalties or time limits of any kind? You can withdraw money at any time. It is your money. There are no time limits or penalties of any kind.

28. How do I withdraw funds from my PFG account? Please call customer support at 312-775-3572

29. Who is Peregrine Financial Group, Inc. (PFG)? – ). PFG is a global FCM. Today, PFG serves investors around the world by bringing trading products and services to them, via computer or personal relationship management, in the customer's language of choice.

30. What Commissions or Management Fees are charged? – We do not charge a commission or any management fee. The difference between the bid and ask, what you can buy and sell for is called the spread and this is where the brokers (PFG) make their money. Not all brokers are commission free in the FOREX, some charge transactions fees or ticket charges, you have to read their disclosures, but most do not charge to trade the FOREX.

31. What leverage do you use? RANE uses a leverage of 10 for each pair traded.

FOREX MARKET

Definition of FOREX

FOREX is the acronym for the foreign exchange market, where one country’s currency is exchanged for that of another country through a floating-exchange-rate system. The FOREX is the world’s largest and most liquid financial market, with a current estimated exchange average of between $1.5 trillion and $2 trillion per day. Compare this to the total average value of global equity trading at $25 billion daily. FOREX is not a market in the traditional sense because there is no central exchange. Instead, the entire market is run electronically, within a network of banks, continuously over a 24-hour period, opening Sunday at 5pm (EST) and closing Friday afternoon at 4:30pm (EST). Even more importantly, there are no gap up or gap downs in the price as so often the case in the U.S. stock markets, because the FOREX is open 24 hours a day, and when it opens on Sunday evening it is the same price as when it closed.

Foreign Currency Trading

FOREX, also called the spot market, is where traders come to trade the US Dollar. The FOREX trades currency pairs, which offers equal risk for short and long positions due to one of the currencies always having a bull side. For example, entering a long position on EUR/USD means that you are going long on the Euro (EUR) and short on the US Dollar (USD), and it works the same way when you enter a short position on EUR/USD, in which you are actually going short on the Euro and long on the US Dollar.

In the currency pair, the first currency symbol is known as the Base Currency – this is always the dominant of the two symbols, and drives the direction of a trade. The second symbol is called the Cross Currency – which fluctuates in exchange rate value compared to the Base Currency.

For example, with the EUR/USD pair, the Euro is the Base Currency and the US Dollar is the Cross Currency. If the Base Currency is stronger in value than the Cross Currency, the trade will have an upward trend for a specific time interval. Conversely, a downward trend would be indicated if the Base Currency is weaker than the Cross Currency.

There are six major currency pairs, and trading in these pairs accounts for more than 80% of FOREX transactions:

1. EUR/USD – Euro vs. US Dollar
2. USD/CHF – US Dollar vs. Swiss Franc
3. GBP/USD – Great British Pound vs. US Dollar
4. USD/JPY – US Dollar vs. Japanese Yen
5. USD/CAD – US Dollar vs. Canadian Dollar
6. AUD/USD – Australian Dollar vs. US Dollar

Major Names in FOREX News Major FOREX participants include commercial and investment banks and central banks. Other participants include corporations, hedge funds, and millions of trader worldwide. The top seven banks that provide liquidity in this market include Bank of America, Credit Suisse, First Boston, Goldman Sachs, HSBC, J.P. Morgan, Morgan Stanley, Dean Witter, and UBS Warburg.

Bank of America reported in its 2002 annual report a $530 million profit from foreign exchange trading revenue under “Global Investment Income”. Meanwhile, it reported only a $384 million profit from trading stocks, and a $86 million profit from commodities trading.

It is not uncommon for a large bank to trade daily, billions of dollars. Some of this trading activity is done on behalf of corporate customers, however bank dealers are performing a large amount of trading to make the bank profits. The financial statements of a majority of banks throughout the U.S. will denote income received from foreign exchange trading.

The commercial companies’ international trade exposure is the backbone of the foreign exchange market. Companies such as Siemens, Nestle, Toyota, BP Amoco, Volkswagen, Intel, Dell Computers, Dow Chemicals, Monsanto, Merck Pharmaceuticals, SmithKline Beckman, Lufthansa, Caterpillar, Union Carbide and Kodak have traded or continue to trade heavily in foreign currencies. Most of these companies established in-house trading facilities or subsidiaries to manage their currency trading.

Caterpillar established its special currency management group back in 1986, when it reported a $100 million profit on foreign exchange that turned its $24 million operating loss into a $76 million profit for that year. DaimlerChrysler threw itself into major investment headlines in late 2003 when it acknowledged that more than half of its 2Q 2003 operating profit was generated by currency trades – making more money on foreign exchange than in selling cars. The car maker reported quarterly operating profit of €641 million ($1 billion), beating some analysts estimates. The company says approximately €350 million of this profit was generated in foreign exchange.

In a recent interview, Warren Buffet, perhaps the most successful investor in history, and Chairman of Berkshire Hathaway, Inc., stated “Through the spring of 2002, I had lived nearly 72 years without purchasing a foreign currency. Since then Berkshire has made significant investments in, and today holds, several currencies.”

George Soros, the hedge-fund manager who made trading history in 1992 by trading successfully against the British pound, disclosed in 2003 that he had taken a short position against the dollar, betting that it would decline in value against the Euro, Canadian Dollar and Australian Dollar. His statement would have made a huge impact ten years ago, when hedge funds had the potential to significantly influence the value of important international currencies. In fact, in 1992 Soros made an estimated $1 billion profit by helping push the British pound out of the European Exchange Rate Mechanism, earning him the name “the man who broke the bank of England.”

The foreign currency exchange is a much different animal today, as economies are far more interconnected and currency markets are far more liquid and active. The estimated $2 trillion traded daily currently is several times the size of the daily trade in 1993. These days, “exchange rates are effectively set by American Backpackers, or Italian tourists getting dollars at Disneyland, or Nokia selling phone equipment to China Telecom, or Coca-Cola selling syrup to a South African bottler, or Daimler buying Chrysler, or Intel paying firms to construct a facility in Taiwan – in fact by the interaction of all these forces. The unfathomably immense number of cross-border transactions, investments, and exchanges now affects currencies far more than any single trader can.” - Daniel Gross, as written in his “Moneybox” column

Advantages to Trading in the FOREX Market

The spot market, unlike the futures market, does not have time value associated with it; therefore, there are no deltas, thetas or intrinsic value to consider. The leverage is very attractive to many investors as it is generally 50:1, although there are some FOREX brokers who offer 100:1. Commissions are eliminated in most cases, as the investor trades directly with the dealers. Many brokers in foreign exchange will make money on the spread between the bid and ask, rather than charging direct commissions. Because the FOREX market is open continuously, 24 hours a day – from Sunday evening to Friday afternoon, it doesn’t see the gaps up or down that are seen at the open or close of the stock market, and investors don’t have to worry about their stop limits being skipped. Equally, the worry of companies posting false information, or money managers or experts offering biased opinions will not have a large impact on a country’s currency. Of course, a trader can suffer losses should the market turn against him. This is a key reason why money management skills are taught as part of the 4X Made Easy software and training system.

Regulation and Oversight After the FOREX market opened up to the public as an investment option, and as its popularity began to increase, the Commodity Futures Trading Commission (CFTC) and National Futures Association (NFA) stepped in to monitor the FOREX market. The CFTC and NFA increased registration requirements and provide a high degree of regulation – thereby adding stability to the market and giving investors more confidence in trading FOREX.

FOREX HISTORY

Brief FOREX History

In theory, foreign exchange dates back to ancient times, when traders first began exchanging coins from different countries and groups. However, the foreign exchange industry itself is the newest of the financial markets.

In the last hundred years, the foreign exchange market has undergone some dramatic transformations. In 1944, the postwar foreign exchange system was established as a result of a multinational conference held at Bretton Woods, New Hampshire. That system remained intact until the early 1970’s.

At this conference, representatives from 45 nations met together to discuss the future exchange system. The conference resulted in the formation of the International Monetary Fund (IMF). It also produced an agreement that fixed currencies in an exchange-rate system would tolerate one percent currency fluctuations to gold values, or to the U.S. Dollar, which was established previously as the “gold standard.” The system of connecting the currency’s value to gold or the U.S. Dollar was called pegging.

In 1971, the Bretton Woods Accord was first tested because of dramatically uncontrollable currency rate fluctuations. This started a chain reaction, and by 1973, the gold standard was abandoned by President Richard Nixon. The fixed-rate system collapsed under heavy market pressures, and currencies finally were allowed to float freely.

The foreign exchange markets officially switched to a free-floating market after the double demise of the Smithsonian Agreement and the European Joint Float. This switch occurred more due to lack of any other available options, but it is important to understand that the free floating of currency was not, by any mean, imposed. This means that countries were free to peg, semipeg, or free-float their currencies.

Pegged: Some smaller economies have attached their currencies to larger economies with which they hold close economic liaisons. For instance, many Caribbean nations, such as Jamaica, have pegged their currencies to the U.S. Dollar. Semipegged: Semipegged currencies have disappeared since 1993. A perfect example of semipegging would be the currencies of the European Monetary System (EMS). Those currencies only would be allowed to fluctuate within 2.25 percent or, exceptionally, within 6 percent intervention bands. Following the foreign exchange crisis of 1993, the new EMS intervention rates were expanded to 15 percent.

Semipegging would have a slowing-down effect on currencies when they were reaching the extreme values allowed within the range. Since 1999, the semipegged currencies of the EMS were switched to fully pegged values that form the Euro.

Free-Floating: When the major currencies are free-floating, such as the U.S. Dollar, they move independently of other currencies. The value of the currency is determined by supply and demand, which has no specific intervention point that has to be observed, and can be traded by anybody so inclined. Free-floating currencies are in the heaviest trading demand.

The FOREX market was made available to the average investor in 1998 and is one of the fastest growing markets in the world, with daily volume of nearly 100 times that of the entire stock market.

PFG

The PFG Open Account Form is an easy and efficient way to open your account on-line. Though most of the questions are easy to answer, there might be a few items in these forms that create a question in your mind. This section was written to clarify any questions you might have. This section does not address all the information required by PFG, it was created as an aid based on the most frequently asked questions we received with regard to these forms.

PFG Online Account Form - Page 1

1. You need to select the account type you wish to open, Individual is currently checked.

2. You simply need to select one based on the reason you are getting into the FOREX Market.

3. YES, the purpose of our services and products is to trade FOREX.

4. NO, we do not use managed accounts.

5. YES, you are trading pursuant to a trading system.

Systems Name is RANE
Fee (If Applicable) is $0.00
Payment Frequency is Fee is paid directly to the system provider monthly
Note: 208;130 is the broker/firm used by 4XTechnician.com

Note: 208 Rimrock is the broker/firm used by 4XTechnician.com

PFG Online Account Form - Page 3

Account Name: Enter the name of the individual you want the account listed under.

PFG Online Account Form - Page 5

7. The answer is YES, because you purchased/subscribed to RANE

PFG Online Account Form - Page 8

Upon completion of submitting the account form you will get the following message from PFG:

Submission Successful! Thank you for applying for a PFG account online.

FUNDING INSTRUCTIONS [Domestic and Foreign] CAN BE FOUND at:

http://www.pfgBest.com/fund/

You should receive an email from PFG within 24 hours of submitting your online applcation

If you have any difficulties with your PFG account please contact customer support at 312-775-3572

SYSTEM REQUIREMENTS

• Intel® Pentium® processor
• Microsoft® Windows 2000 with Service Pack 2, Windows XP Professional or Home Edition, or Windows XP Tablet PC Edition, Windows 2003 Server, Windows NT SP6 or 6a
• 128MB of RAM min, 256 MB or greater recommended
• Up to 10MB of available hard-disk space
• Microsoft Internet Explorer 6 or higher.
• Internet connection is required. An Internet connection is necessary for 4XT DTS to download the Alerts from the 4xTechnician.com servers. Cable/DSL connections are recommended.
• Firewall, if present, needs to allow 4XT DTS to connect to the internet (see your firewall configuration)