Trading online | Andrew Zarb Mizzi

Can you brief our readers on RTFX's function?

"RTFX is a pioneer in the online foreign exchange market with a history dating back to 1995 and which forms part of a group of strategic partnering companies established 17 years ago.

"The first entity, Gay, Glauser & Cie, was established in Switzerland in 1995. In 2000, it evolved into Realtime Forex SA (the precursor to RTFX Ltd) and became Switzerland's first online market maker in foreign exchange trading.

"In March 2009, RTFX was set up in Malta holding a Category 3 license and regulated by the Malta Financial Services Authority under MiFID regulations.

"Realtime Forex SA is still based in Geneva and operates as a technology development entity under the name of Real Time Financial Technologies SA.

"RTFX boasts of an in-house Trading Floor bringing together qualified FX traders and customer support specialists who assist our customers and are particularly proactive in producing and disseminating news, analysis and research.

"The company also employs a full complement of web developers and IT professionals in support of the ongoing development of our proprietary trading platforms, websites and trading tools.

"Since the start of operations from Malta, aside of continuing to build on our highly successful online foreign currency trading brokerage service, RTFX launched, during the autumn of 2009, an Asset Management service proposition which has returned since inception a very respectable performance to our clients and caters to investors who wish to diversify their investment portfolio but prefer to leave their foreign exchange investment in the hands of FX professionals.

"Being a particularly dynamic company, in line with our continued drive, we have completely revamped our corporate website and plan on launching yet another update early in 2013. We are also developing and upgrading our entire complement of online trading platforms which will similarly be launched in early 2013.

"Our market Research and Analysis enjoys a very strong following. We have added new analytical and educational tools which are used every day by both clients as well as the foreign exchange investor community."

What's so different about the forex market compared to other financial markets?

"The foreign exchange market is the world's largest financial market. The latest official survey shows that on average USD4 trillion is traded each day in foreign currency. As a result, liquidity is virtually guaranteed compared to other asset classes. This lends confidence to investors in the knowledge that there is no risk of being unable to dispose of an investment.

"Unlike the equity and bond markets, the foreign exchange market is open globally 24 hours a day, five days a week.

"From the opening on the Asian markets on Sunday evening local time until the US markets close on Friday evening, the foreign exchange market never stops trading, allowing foreign exchange investors to transact at any time of the day and night without the need to wait for the markets to reopen as is prevalent in the equity and bond markets.   

"Furthermore, the introduction of online trading platforms has completely revolutionised the investor's experience. Rather than having to contact your stockbroker and providing your instructions to acquire or dispose of an investment for you, by making use of our proprietary trading platforms which provide 24-hours-a-day real-time prices, instantaneous execution and trade confirmation, our clients trade directly in the market themselves from the comfort of their homes, from their work place or from wherever they may be in the world without any intervention by RTFX.

"For those interested in the foreign exchange market but are newcomers, RTFX also provides a free demonstration account. Our demonstration account simulates real trading conditions and serves to allow newcomers to practice and familiarise with the foreign exchange market in an entirely risk-free environment."

How did the financial crises affect the forex market?

"In truth, any savvy investor would view the on-going financial crisis as an investment opportunity. Many of our clients registered material profits given that investors in the foreign exchange market can profit from both rising as well as falling markets. "

What services do you offer?

"We currently offer two dedicated services namely, a Brokerage service and an Asset Management service. 

"Brokerage Accounts are ideal for those individuals who prefer to trade directly themselves by using our live prices and real-time news directly available on our online trading platform. Brokerage Account clients can trade on 42 different currency pairs as well as in gold and silver.

"Our Asset Management service, on the other hand, is an option for investors who wish to participate in the opportunities presented by the foreign exchange market but do not have the time to trade the market themselves. Clients investing through this service delegate the responsibility of trading in the foreign exchange market to RTFX which trades on their behalf in line with a pre-defined and agreed strategy.

"RTFX offers three different strategies - conservative, standard and dynamic - to meet the differing risk appetites. Investors are able to select one or more strategies which best fit their own personal risk-reward preference.

"Naturally, our Asset Management service is completely transparent and clients are able to login to their secure online account to view every transaction RTFX trades on their behalf and obtain account statements whenever they want.

"Clients are also able to discontinue their Asset Management service at any time by simply providing a 24-hour notice to RTFX. Thus, there is no lock-in period either. RTFX believes that it should only be rewarded if it has delivered results to its customers. This principle has been embedded as a 'minimum performance benchmark' within our Asset Management service and unless RTFX is successful in achieving this annual benchmark it will not earn any commission.

"Furthermore, we also adopt a 'high water-mark' on our Asset Management service. This ensures that, in the event of a negative performance in a preceding year, it would first need to recover this negative performance prior to earning any commission on the positive performance of subsequent years.

"Finally, RTFX does not charge any management fees either. We have structured our Asset Management service to be unique in many ways. It is entirely transparent and online, it performs well in the medium to long term and its charging structure is aligned to generate performance for our clients."

What type of investors benefit from your services?

"RTFX offers industry leading online trading services built by professional FX traders but adapted to the needs of both retail and professional FX investors.

"We employ customer support teams to assist our clients via e-mail, phone and online live-chat in multiple languages. Concurrently, we aim to provide a trading environment that suits investors with any level of experience.

"Investors can opt for a silver, gold or platinum account under our brokerage service with the minimum deposit being €2,500 for the silver account whilst the minimum entry level for our Asset Management service is €10,000 for the Conservative strategy.

"Any investor can open an account with RTFX. Our client diversity ranges from retail and professional investors interested in trading the foreign exchange market, to investors who wish to diversify their own investment portfolio of equity, bonds and collective investment schemes by adding foreign currency investments within their portfolio, to institutional investors seeking to achieve increased performance of the Funds they manage by allocating a small portion in our Asset Management service, to corporate entities wishing to indirectly hedge their foreign currency exposures."

Wouldn't an investor already be exposed to currencies by simply holding foreign securities?

"Yes, definitely."

So why should they be looking to introduce foreign exchange within their portfolio?

"Firstly, currency exposure within an investment portfolio will tend to be static. Let us assume that a typical portfolio of an investor would probably hold bonds denominated in currencies that include the Euro, USD and GBP.

"The primary objective of investing in bonds is to earn the fixed interest paid on holding that security. Now what would happen to the amount of interest you earn in USD if the EUR/USD currency rate moves against you? Clearly, you would earn less interest in euro. Let's take a small example. If you invested USD10'000 earning interest at 6% per annum when the EUR/USD exchange rate was 1.25, you would expect to earn 480 euros in interest (the bond will pay you US$600 divided by the exchange rate EUR/USD 1.25). However, what happens if the exchange rate moves to 1.35? Your investment would still earn US$600. However, the value of those US$600 in euro would now be 444.44 euros (or 35.56 euros less) due to the move in the currency rate.

"Since our Asset Management service seeks to profit from the strengthening or weakening in the EUR/USD exchange rate, we believe that by allocating a small percentage of a portfolio to our Asset Management service, an investor would be participating in potentially higher returns and if your USD bond or equity investment lost you money due to currency fluctuation, you may be able to compensate or replace this loss with the potential gains made by our Asset Management service."

How important has it become for retail FX providers to be properly regulated?

"This is an aspect that RTFX has always given great importance to. In this respect, we pull out all the stops to maintain the highest standards of compliance to MFSA and EU Investment Services Regulations and Directives. We believe investors should only invest with companies that they are confident are properly regulated."

How easy is it for someone who is relatively new to your services to actually manage his own positions?

"Our website is bursting with comprehensive educational material as well as real-time news, economic data, technical and fundamental analysis. In addition, our Traders and Customer Support personnel are available to assist and guide clients by explaining and enhancing their understanding of the services we provide on a one-to-one basis.

"Getting started in the foreign exchange market is very simple. It's only a question of time, patience and discipline. All you need to do is visit our website and begin by opening a free practice account and allowing RTFX to assist you."

Are there other opportunities for a potential client to test his trading strategies?

"Yes. Apart from the free practice account, we are also an official sponsor of a foreign exchange trading competition called the 'The Forex Championship' (www.theforexchampionship.com). This trading contest has had over 25,000 participants competing to win monthly prizes.

"This new season will see daily, monthly and overall winners exchange their accumulated FXMiles into free margin on a real account with RTFX or alternatively Gift Cards with Amazon.

"Over the past years, RTFX has distributed in excess of one million euros in prizes convertible to free margin on a real account, the profits of which can subsequently be withdrawn by the participant. This is a great tournament which provides a venue for individuals keen and interested in the foreign exchange market to learn whilst also enjoying a healthy participation in a tournament to win prizes."