A few days ago I ran into a FX futures trader, and I met with him again yesterday. In the world of finance, FX stands for "foreign exchange".... This guy trades in futures in overseas currencies, like trading between US dollars, Japanese yen, Mexican Pesos, the Euro, Australian dollars, and other currencies....

On the plus side, this is the sort of thing the well-known fund manager George Soros did (before his retirement), trading billions of dollars worth of overseas currencies, and making, and sometimes losing, billions of dollars for his fund....

It's also how Nick Leeson brought the world's first investment bank, Barings Bank, to bankruptcy, by losing them BILLIONS (if you've seen the movie, "Rogue Trader")....

It is a high risk game, with very big wins and losses.

The guy I know is named Willy.... He's originally from Switzerland, and has been trading FX futures (both professionally, and for himself) for 26 years.... It's interesting to peer into this very high risk area of making money.... I'll tell more about the details of FX Futures later.... first, here's a story Willy told me, which tells you about the risks involved!

Willy was a young man working in Switzerland in FX futures, and his wife was 7 months pregnant at the time. One day as a young trader, he started with $10,000 of his own money and turned it into $187,000 -- in ONE DAY! He felt on top of the world, he was ecstatic! He felt like he knew everything there was to know about trading FX Futures....

He decided that he wanted to show his wife what $187,000 looked like.

This being Switzerland, he went to the bank and withdrew the $187,000. He put it in an ugly brown paper bag, the kind you probably wouldn't even want to keep your lunch in. He did this so that others wouldn't think he was carrying anything valuable, just some disgusting uneaten sandwiches left over from lunch, so that no one would even want to touch it.

He took the train home, which was crowded. Willy was squashed between two people on a seat, partly crouched over the brown paper bag at his side so nobody could take it. He told me he didn't want to take a brief case handcuffed to his wrist, since that would be an INVITATION for someone to take it!

Willy got home, and in front of his wife he took the brown paper bag and poured out $187,000 in bills. He thought his wife was going to go into labor then and there, 2 months early....

The next day, he took the money back to the bank, and did some more trades.

That day, he ended up LOSING $100,000. So he had to go home and tell his wife....

He told his wife, "Honey, I made some BIG losses today...."

She said, "How big? Did we lose the house?"

"No," he said, "Not that bad.... But I lost $100,000...."

But now, many years later, Willy feels good about that loss, because you learn the MOST from your failures.... He learned the lesson of when to cut your losses in highly speculative trading like you find in FX Futures....

Sometimes, you have to go through some pain in order to learn something new.... Or the way he put it to me was more like (forgive the language), "Sometimes you need to be kicked in the balls, HARD, to learn...."

More on the details of FX Futures -- this VERY HIGH RISK opportunity -- later.... :)

Dien Rice