NEW YORK -- Between the hours of 6 and 8 each evening, Ian Spence, 37, attempts to detach himself from his work as the chief foreign currency trader at Manufacturers Hanover Trust Co.

He goes home and spends time with his wife and children. Sometimes he has a drink. Then he turns on the computer in his living room and begins his job all over again.

Beside Spence's bed there is a little machine that stays on all night. It displays foreign exchange rates from around the globe: Tokyo, Frankfurt, London, Sydney, Hong Kong. It shows the dollar against the Japanese yen, the Swiss franc, the West German mark, the British pound, the Dutch gilder and other currencies. Second by second, the shifting ratios blink.

"Anytime I wake up spontaneously, I'll look at the machine. If I've got a heavy position, I may wake myself up every 15 minutes," Spence said. On an average night, the phone rings once or twice from one of the overseas trading desks. On the bad nights, it gets so noisy that his wife sleeps in the guest room.

"I've resigned myself to the fact that if I want to make a lot of money, this is what I have to do," Spence said. "I couldn't imagine working in some quiet banking function at a quiet desk making quiet decisions of some insignificance."

There is nothing subdued these days about the multitrillion-dollar foreign exchange market, the volatile arbiter of the price of the world's money.

While Western governments wrestle with themselves and each other to achieve politically desirable rates for their currencies, producing an international exchange market that fluctuates continually, large banks like Manufacturers Hanover have redoubled their commitment to making profits by trading money. For the banks, foreign exchange trading has become a growth business of large proportions.

Manufacturers is not one of the biggest players, but through the recent recruitment of Spence and his supervisor, managing director James H. Hohorst, from Merrill Lynch & Co. Inc., it hopes to change that quickly.

The bank's motives for growth are obvious -- its rivals are reaping enormous profits through foreign exchange trading. Bankers Trust Co., for example, earned more than $250 million in profits from currency trading during the first nine months of 1987, more than in the previous five years combined.

The mammoth profits available in exchange trading have encouraged the banks to take bigger risks in the field. "If our management wants to make $275 million like Banker's did, they almost have to be prepared to lose $275 million," Spence said. "I think bank management here's beginning to understand that."

The growth in currency trading at the big banks is one of many areas where traditional differences between investment and commercial banking are breaking down. On the seventh floor of its Park Avenue headquarters, Manufacturers' boisterous exchange trading room has the look and feel of a Wall Street stock trading house -- and none of the staid ambience of an old-line bank.

Young traders in shirt sleeves stand at their open stations, shouting orders and sometimes cursing at the news headlines that flash on big, scrolling electronic screens at either end of the room. Even more than stock or bond traders, currency traders respond speedily to news developments, especially those concerning the economy and the trade deficit.

"It's very, very liquid," Hohorst said. "I'm not ashamed to cut it out {trade in and out of a currency position} in 20 minutes."

"We're really concerned with what's going to happen in the next few seconds to the next few minutes, rather than the next few weeks," Spence said, as he watched the 15 "spot" traders under his supervision heatedly discuss the dollar's moves on a recent afternoon.

Virtually all trading of foreign currencies is measured, mainly for convenience, against the dollar. Spot traders buy and sell blocks of currency on a very short-term basis. Other traders in the Manufacturers currency room specialize in foreign exchange futures, options and the currencies of developing countries.

"All they're looking for is a point here and a point there," Spence said, speaking of his spot traders. "We're in and out, in and out ... literally 10 times a minute." Under Manufacturers' system, spot traders make trades with relatively small risks and small profits. Management is satisfied if each trader makes between $5,000 and $10,000 per day from short-term trades.

Since news is what often moves the currency market, each trader is equipped with a bank of screens providing nearly every available electronic financial news service. When a significant headline crosses the screens, commotion erupts -- even if it isn't clear what the headline means.

As Spence watched his traders, for example, a headline flashed on the Dow Jones news service saying that U.S. cooperation with Japan on trade issues might include "SDR {special drawing rights} swaps for yen." Suddenly, all the traders were jumping to their telephones and shouting orders.

One of the traders approached Spence's desk to report. "Nobody knows what that means, so they're just buying dollars," she said matter-of-factly.

"I don't know what that means, but it sounds important," Spence said with a wry smile. "I still think it's a little dangerous to be short {a seller of} dollars in this market. I don't know what this means, but I'd rather be long {a buyer of} dollars."

Hohorst, 33, who has traded currencies in the United States and in Europe for more than a decade, said that such intuitive responses to news events are the key to successful exchange trading.

"Trading is recognizing patterns of movements of rates," he said. "You don't do that analytically. ... Very few of my business decisions are based on a careful analysis of numbers and figures."

In his effort to boost Manufacturers' exchange trading profits, Hohorst has consolidated risk-taking in his department. Only Hohorst and Spence are authorized to make potentially risky big trades with the bank's capital.

One way Hohorst said he attempts to control the bank's risk is to continually assess what central force is moving the currency market. "Right now, it's really the trade deficit" that is moving the market, he said. "Private investors are not willing to buy dollars. They're not convinced that the dollar is so low that it can only go up. This is not a free market level" because of intervention by central banks to support the price of the dollar.

Hohorst said that he has the most success analyzing the currency market when he assumes a disinterested, global perspective. "I pretend I'm an Arab investor because then there's no nationalism involved," he said. "I say, 'Okay, I've got $50 billion. Where am I going to put it? In the U.S.? In the U.K.? Why?' "

Not everyone in the foreign exchange market is trading with the enormous bankroll of Hohorst's fictional investor. Manufacturers has sales representatives to handle currency trading by small to midsized players. Individual investors interested in currency trading may find it easiest to use foreign exchange futures and options markets in Chicago and Philadelphia, where relatively small investments are required to speculate on the movement of currency rates.

As was the case with stock futures, foreign exchange futures trading grew rapidly during the 1980s. During 1987, the Chicago Mercantile Exchange, which dominates currency futures,saw $2.2 trillion in currency products trade on its floor, Merc official Randy Gilmore said.

Futures markets such as the Merc are the only places where traders come face-to-face to trade foreign exchange. The traders at Manufacturers and other big banks participate in a dealer system in which prices are transmitted electronically and trades executed by telephone.

"Here you have a true open outcry market," Gilmore said of the Merc's boisterous currency futures trading pit. "Everywhere else it is trading by telephone one-on-one."

That system makes it easier for aggressive players like Spence and Hohorst to trade money around the clock. Hohorst has gone so far as to program an alarm into his bedside computer. The computer, like Spence's, quotes currency rates all through the night. Before he goes to bed, Hohorst types in information about his trading positions and instructions about when he wants to be awakened by the alarm.

"I can tell it to let me know when I'm making or losing more than half a million dollars," Hohorst said. He can also be alerted if the dollar rises or falls to a particular level.

With his present setup, the computer sounds an alarm if any preprogrammed price threshold is crossed. But Hohorst said he hopes to soon install a voice synthesizer "with a sexy female voice" to quote him his currency positions during the wee hours.

It is unclear whether Hohorst's wife, who trades Latin American debt securities at First Chicago Corp., will learn to tolerate this synthesized bedroom companion. But at the least, she is not averse to the arrival of Marshall McLuhan's technological global village in her Brooklyn Heights town house. Since his wife is pregnant and will be spending some time at home when the baby arrives, she is installing a facsimile telecopy machine in their living room.

"The modern couple," Hohorst said with a smile.