Understand the fundamentals and you will be eager to try it!

Fundamentals summary

Basically the strategy allows you to

• earn daily interests
• buy low and sell high

Daily interests are earned by capturing the difference between the currency rates of hedged currency pairs which can be substantial (see below) depending on the leverage you choose to use.   This is done only with high correlated hedged currency pairs in order to achieve a balance between a desirable yield and capital preservation.  Added to that, there is a “Buy low, Sell high” strategy that attempts to catch additional profits while the prices of currency pairs are fluctuating.

Detailed Strategy

Profits are generated 3 ways:

1. COLLECTING DAILY INTEREST

The system makes profits on the difference in interest rates that the central banks set on their respective currency. When you buy a currency pair, such as the EUR/USD, you receive interest from the first currency listed in the pair (EUR) and you pay out interest on the second currency (USD). If you buy the currency with the higher interest rate (and at the same time sell the currency with the lower rate), you will end up with a positive net interest each day. Depending on the broker, the interest is calculated at 5:00 pm EST. Since interest is not paid on the weekends, it is normally paid triple on Wednesdays to compensate for the other two days. The Portfolio Allocator will allow you to select virtually any interest rate you desire on your portfolio (based on today's approximate rates). Higher levels of interest requires higher levels of risk.

2. THE POWER OF LEVERAGING

The interest rate you earn yearly is small but remember, it is not calculated on your initial investment but on the "Leveraged" amount of currency positions you hold. Therefore, if you have $10,000.00 in your brokerage account and you purchase currency pairs for a total of $1,000 (margin = 10%). At 400:1 leverage you control and earn interest on 400 times $1000 = $400,000. NOTE: this is not a recommendation but an example.

Example: If on May 23rd 2007 you had invested $10,000 in a brokerage account with one of the listed broker by MVIB with a leverage of 400:1 and a margin of 10% and you bought positions in the 3 currency pairs shown in the table below then you would have ended up with an annual interest yield of 44.83% (as long as the rates stay constant). (One would be hard pressed to find interest returns such as this anywhere else).

NOTE: These figures are based on the current input and will change depending on the currency rates and lots you own.

3. BUYING LOW AND SELLING HIGH

Additionally, the Investment Strategy, once you enter your risk parameters, gives predetermined Buy and Sell points that take advantage of daily Market price fluctuations. These are automatically executed by your brokerage account software to eliminate the human emotions factor and need for manual decision making.

Capital protection

In order to achieve a balance between a desirable yield and capital preservation the strategy makes you hedge your positions by trading at least 2 (up to 4) different currency pairs that historically speaking, move in opposite directions. In other words when one goes down the other should compensate for the loss by going up.

Besides it provides the correlation between each pair in order for you to evaluate the strength of the hedging. The higher the correlation* between the traded pairs, the lower your daily portfolio Profit/Lost volatility will be, which in turn will:

• reduce your risk of losing your investment capital or triggering a 'Margin Call".
• make it possible to check your portfolio only once a day.
• potentially allow you to trade at higher margin and higher risk.

Disclaimer: All examples and numbers used are for explanation purposes only and are not intended to be used as an inducement for the sale of any financial products or services or to guarantee what one can expect to earn while investing in the Forex Market. Leveraging 400:1 incurs more risk than leveraging 200:1. All Forex investing involves risk and one should never invest more than they can afford to lose. The strategy is an educational support system only and does not accept any responsibility for the outcome of anyone's personal brokerage account. Always practice with a demo brokerage account first before trading real money. Annual interest rates of various countries governments change occasionally and do not stay constant. Also past performance is no guarantee of future results.

Operational mechanic - How Does it work?

The Investment Strategy is a web based FOREX Investment Strategy that helps you decide which currency pairs to trade. And once you enter your risk parameters, it gives you exactly how much to buy or sell. The strategy does not provide any signals nor teach people how to trade foreign currencies but rather how to use the investment software to set up your own brokerage account (at the brokerage firm of your choice) so that it automatically trades for you based on the Buy and Sell "Limits" you would have set up. These processes require only a few minutes per week.

Note that many small videos and presentations are available on the command center allowing you to easily understand how to use the different tools available.

step by step process - flow chart

When you are setting up your initial portfolio, you will always begin in the Portfolio Allocator. The Portfolio Allocator is where you will make three basic decisions: the amount of money you will be depositing with the broker, the margin percentage you will be using, and the currency pairs you plan to trade. Once you have made these decisions, you will enter the appropriate information into the Portfolio Allocator.

Using that information, the Portfolio Allocator will calculate the number of lots to buy for each of the currency pairs you are trading. You will take that information and open your broker platform to place your initial buy orders. The reason you place these initial orders is so you can start earning interest.

Once you've placed your initial trades, write down the price you paid for each pair and enter that information into the Portfolio Manager along with the number of lots you purchased. The Portfolio Manager will use that information to calculate the exact buy and sell points for the currency pairs you are trading.

You will then place the buy and sell limit orders on your broker's platform using the buy/sell rates from the Portfolio Manager. Then, you wait until a buy or sell limit order has executed. The reason we place these limit orders is so you will buy low and sell high as the market moves. If you like, you can also set alarms in your brokerage account software to notify you by text or email message when one of your buy/sell points has been reached.

Automating the buy/sell process removes the human emotions factor in trading which is why statistically about 95% of people fail in the Forex Market.

When a limit will be reached, your broker's platform will automatically (even while you sleep) buy or sell a certain amount of lots of currency pair according to your limit order. It could sell a few lots of EUR/USD to lock in a profit when it goes up and at the same time buy some USD/CHF at a discount when it goes down.

When the movements of the market have activated either a buy or sell limit for a currency pair, it will be necessary to RESET the buy and sell limits for that currency pair.

Here is a picture to better understand how everything fits together...where do YOU fit in? On the left side of the picture below it is when you access the strategy web site then on the right side it is when you access your brokerage software