Carolyn Rizzo has bought and sold currency in amounts ranging from a few
hundred dollars to as much as several million dollars. She's traded currency
for some of the best-known corporations in America, and has helped small businesses
get their start in the world of foreign exchange. It's a fast-paced,
demanding profession, and Rizzo enjoys every minute of it.
Now a partner in a private currency exchange brokerage, Rizzo formerly
managed the foreign exchange department at a bank. She attributes her success
as a trader to the fact that she makes sure "the little guy gets the same
quality of service as the biggest corporate client."
Rizzo begins work every day by sitting down and catching up on what's
happened in the financial world overnight. She starts early, to keep up with
markets in eastern North America and Europe. As soon as she arrives at the
office, she scans through the newest information in her computer.
On the screen she checks the spot rates, futures, trading rates and currency
rates. One of the most crucial pieces of information is the rate of currency,
which is set every day.
Rizzo also checks the newspapers each morning to keep up to date on world
news. The financial pages are of particular importance, but other events --
wars, elections, changes in debt and unemployment levels -- can also impact
the financial world.
Then Rizzo's phones start ringing non-stop. In between fielding calls,
she starts to telephone her clients. "I constantly call my clients, to keep
them up to date and advise them of the rates," she notes. "It builds up trust
and goodwill. I'm there to help them get the best rate on their money."
After working for over 20 years in foreign exchange with the bank, Rizzo
went private. The flexibility of working in a private exchange brokerage makes
the job more exciting.
But Rizzo also believes that one of the best ways for a young currency
trader to learn about the business is to start out at a bank. In-house training
at a financial institution is a big part of the learning process, and important
contacts can be made through the bank.
Intuition is another good trait for a currency trader. "Sometimes it just
seems like good traders are born that way," Rizzo says. "All the courses or
training in the world can't replace that instinct of knowing when and
what to buy or sell."
Instinct is definitely important when playing the foreign exchange market.
Maybe that's what intimidates so many people.
"Foreign exchange isn't a topic people know much about. People see
it as a difficult, intimidating topic. They look at the whole thing as another
way to get in trouble," says trader James St. Germaine from New Jersey.
St. Germaine is vice-president of a private foreign exchange consulting
company. His job is slightly different than most traders who work for large
banks -- he finds customers, usually small to mid-size companies, the best
currency rate possible from a variety of banks.
"When the bank quotes a company a rate, they don't know how competitive
it is. We have the advantage of having a network of banks. The bank knows
that if they don't give me the pricing that is right for my customer,
then I'm going somewhere else."
One advantage to working for a consulting company is that St. Germaine
doesn't have the same level of stress that many other traders live with.
"There is a certain comfort in knowing that when I call a bank, I know what
they know. If he quotes me a non-competitive rate, then he's going to
have to listen to me bust his chops. I've got a bunch of banks on speed
dial and I'll just call someone else."
St. Germaine specializes in exotic currencies -- a tough but fun part of
his job. He works with a lot of nonprofit organizations that need their funds
transferred to foreign countries.
"You always hear these forex horror stories where the funds leave the customer's
bank and don't arrive at the foreign bank. What I do is go through a
lot of work setting everything up so that won't happen. Banks in Latin
America are infamous for getting money but not acknowledging it. I make sure
that they generate a deposit slip that is faxed to us. If the money doesn't
arrive at the bank, then it doesn't matter what rate you get them."
St. Germaine spends a good part of his day watching the markets for good
times to buy and sell his customer's currency.
"Many people will know two to three weeks in advance that they have to
buy a currency....We keep an eye on the market for them. I talk to banks and
I look at the screens. When we see it moving, we're on the phone telling
them whether the market is working for or against them."
Changing currency markets can be tough to keep up with. It doesn't
require a magician to do the job, it requires a lot of hard work.
"People seem to think that we're working on a crystal ball. We have a
lot of expertise, but we can't predict where the mark will be three days
from now. If that was the case, we wouldn't have to work!"