Markets Today :

  • EUR/USD1.0795 (+0.1243%)
  • EUR/JPY120.1840 (+0.4455%)
  • GBP/USD1.2467 (-0.3963%)
  • AUD/USD0.7622 (-0.0249%)
  • USD/CAD1.3377 (+0.1910%)
  • USD/CHF0.9909 (-0.2165%)
  • USD/CNY6.8802 (-0.0581%)
  • NZD/USD0.7025 (-0.0512%)
Forex origins explained

Market Forex - is the international currency market.

It got its name from the English name of the reduction of currency exchange: FOReign EXchange.

Being one of the youngest financial markets - in its current form Forex exists only from the 70s of the last century, the currency market is at the same time the largest in terms of volume and fastest-growing market. Daily volume of trading in the Forex is $ 4 trillion, which is 30 times the total volume of all stock markets in the U.S..

Like any other market, Forex is traded on a particular product. In the case of the currency market this product are the national currencies of different countries. Fundamental factor movements in exchange rates is the need of government agencies and commercial companies throughout the world to convert profits from the sale of goods and services abroad in the national currency. They account for about 5% of the total volume of the foreign exchange market. The remaining 95% provides currency traders speculative capital seeking to profit from the movement of currency exchange rates.

In the forex market, there are several categories of brokers. Such as brokers CFD (Contract for Difference) - Contract for Difference, ECN brokers (provide Forex traders with direct access to other market participants Forex), MT brokers (support trade through MetaTrader 4), Institutional Forex brokers (backed by a solid and respected reputation off online companies - such as banks and financial institutions), and others.

An important property of the foreign exchange market lies in its stability. The main danger in any financial market is its unexpected fall, collapse of the stock index. However, unlike the stock market FOREX is not falling. If the shares are worthless - it's a failure. If the dollar collapsed, it just means that another currency has become stronger, such as the yen, which in a few months in late 1998, was 25% more expensive in relation to the dollar. On some days, the dollar's decline is measured in tens percent. However, the falling dollar, the fall in any other currency, could not cause the collapse of the currency market and trading continued as usual. This is the stability of the market and related business: currency is the most liquid and secure trading tool.

Of greatest interest to speculators are the most common (most liquid) currencies, ie "Basic." To date, more than 85% of all transactions are transactions with major currencies, which include the U.S. Dollar (USD), Japanese Yen (JPY), Euro (EUR), British pound (GBP), Swiss Franc (CHF), Canadian (CAD ) and Australian dollars (AUD).

An important stage of familiarization with the currency trading is understanding the exchange rate notation system. This is a fairly easy task, given that the designation of all the major currency pairs is the same type: on either side of the sign "/" are two characters whose value relative to each other expresses the rate of the currency pair: EUR / USD (euro to U.S. dollar ), GBP / USD (British pound against the U.S. dollar), USD / JPY (U.S. dollar to Japanese yen), etc. Sam slash ("/") characters in the designation of the currency pairs are often omitted and currency symbol is reduced to EURUSD, GBPUSD, USDJPY.

The essence of the foreign exchange market is very clear: to profit from the movement of the rate of one currency in relation to another: the whole currency market is composed of the currency pair, each of which shows the relative value of one currency versus another. For example, when we say that one euro yield 1 dollar and 34 cents, which means that the EUR / USD is 1.3400.

About Forex

Why thinking about working on increasing personal wealth, many choose exactly currency trading? Advantages of Trading Forex can be seen by a simple comparison of formulas trade: "Money = good. Product = money + income - expenses. " In the foreign exchange out of the equation excludes expenses (transportation, storage, rent, staff salaries, etc.) inherent in the standard "commodity" trade. Formula currency trading much easier and more efficient, "Money = more money = money + profit."

The Market Forex - What is it?

Forex (from the English Foreign Exchange market) - literally translated means "international currency exchange." In today's business environment Forex understood as a complex combination of all trade and investment activities related to the exchange of one currency for another at a variety of fixed rate. The main participants of the Forex market is the largest commercial and investment banks, the central banks of different countries, brokerage houses, dealers and other financial institutions (eg, such as pension funds and insurance companies). As the major currencies traded on the Forex, is considered to be the Swiss franc (CHF), Pound sterling (GBP), U.S. dollar (USD), Japanese yen (JPY) and the euro (EUR).

Direct profit from trading in the Forex is based on the laws of fluctuations of the exchange rates. In this case, it is the national currency becomes a commodity or medium of exchange, a similar, such as oil, grain or precious metals, which, in turn, made the money is not as popular way of investing in the more conventional stocks or bonds. The cost of goods in the Forex (ie one currency relative to another) is in direct proportion to the economic performance and levels of development, the owners of the exchange.

To profit from the trade of a currency to choose the right tradable "goods" and correctly predict changes in domestic and foreign economic policy of the country and often, which owns currency.

The advantage of the Forex market to other sectors of the financial market is the fact that trading in this market are made 24 hours a day and did not stop throughout the week. Each time zone is always willing to buy or sell the currency, while the stock market (stock) interrupts the trade at the end of the day, and resumes the next morning. By the 24-hour mode Forex market participants do not need to wait to react to this or that world events, such as the stock market.

Market Forex - how did it start?

Currency trading has a long history indeed. Its origins are thousands of years before Christ - then in ancient Egypt were first metal money. Themselves in a familiar currency transactions and today we began to develop in the form of the Middle Ages, when the first international bank using exchange payments. They were absolutely valid for submission to a third party, that is what contributed to the significant increase in the number of foreign exchange transactions. During this period the formation of the foreign exchange market in the classical sense. The very first Italian moneychangers money changers were considered successful in raising at the exchange rates of various states.

The first stock exchanges have appeared in the XII-XVvekah, though at the time they looked more of bill fairs. The oldest in the world to the Amsterdam Stock Exchange, whose history dates back to the XVII century. By the end of the same century, formed the London Stock Exchange, it is with its platforms division traders began to "bulls" and "bears" that is used to this day.

The modern foreign exchange market has developed not so long ago - in the twentieth century. Until the mid-thirties of the last century it was the center of London currency trading, respectively, the main currency for payments and provisions was precisely the British pound. British pound in the period acquired a very "telling" name - «cable» (telegram), which is not surprising, since the trade was conducted mainly via telex and telegraph.

Market Forex - a transition from the pound to the dollar.
After 1944, under the Bretton Woods agreement was the U.S. dollar became the reserve currency for all the capitalist countries, since only the United States has not suffered economically during the Second World War. At that time, the U.S. dollar was pegged to gold, which amounted to $ 35 per ounce.

The next milestone in the development of signs of currency trading has been the introduction of freely floating exchange rates in the late seventies of the last century. It was at that point the market Forex got a form that is kept up to date. A currency trading could be anyone, and the price of currency was to be in direct proportion to the current supply and demand on the market. The introduction of a floating exchange rate has led to a significant increase in trading volume in the market Forex: only for the first ten years from 1977 to 1987, it rose to $ 5 billion a day to 600, and by the beginning of the 21st century was about a half trillion dollars.

The history of foreign exchange was not without influence technological revolution. Trading process has changed during the time of the primitive systems of exchange currency on a "hand-to-hand", to more complex forms, using a variety of technical devices (telegraph, fax, telephone). To date, the most automated dealing systems, adapted for currency trading via the Internet. Ever-developing computer technology made it possible to trade foreign exchange available to more individual traders managed to increase the trading skills of speculators, and as a result, the growth of trade.

In order to make an independent bid today need to do is open an account with a Forex Dealer and download to your computer trading platform that provides the ability to trade any currency of the world, get quotes from leading vendors. The size of the minimum deposit down at times, as compared to those that were needed 10 years ago to enter this market.

Market Forex - history in the people.

Over many decades, professional history and foreign exchange trading, participants often become observers of ups and downs, successes and failures, discoveries and hoaxes. The Forex market has its own "legend" as any other area of ​​human activity. However - in the field of exchange trading, so emotional and economically significant, a great many legends of the adult, bright, textbook and memorable. Such as Laura Pedersen, who became the youngest trader. Starting to work on Wall Street in the 17 to the 20 it already had its own place on the American Stock Exchange, and by the age of 24, she earned the first half million dollars.

Speaking about the legends of the financial world can not think of Jesse Livermore (1877g.). It is he who is the most successful speculator in the history of exchange activity. Its first deal he made at age 17, and by the age of thirty, was already a millionaire. That he managed to have a huge market crash in 1907 - then just one day, he made three million. He made axiomatic postulate that "strict discipline - the success of a trader."

Not without its success stories, accompanied by incredible explanations. For example, Robert Prechter, who in 1984 won the U.S. Open for trading on a real money account. In the eighties, he was considered the author of the most successful flow forecasts of the financial markets, is among the five masters of the world of finance. For market forecasting ion used art, popular culture. According to him, the market behavior directly reflects the mood of the masses, in turn, reflected in the fashion, music, films, etc. Robert Prechter thought that see the future of the movement and the market can change in the length of the skirt, the colors of a tie, the popularity of the sports event, the design of buildings and cars. Despite the apparent absurdity of the theory, R. Prechter remained a successful player in the financial market.

William Delbert Gann - another mysterious figure of the world stock of games. He began his career as a trader in the early twentieth century, is quickly gaining popularity very talented trader, capable of surprisingly accurately predict not only the movement of the market, but the historical and political changes in the world. Despite the fact that according to him the basis of his calculations lie only natural laws available to any person able to produce simple math, he has used in his work a variety of astrological charts.

But, undoubtedly, the most famous figure in the world of financial trading and remains to this day, George Soros, whose fortune is now estimated at 11 billion U.S. dollars. Being not only a successful financier and investor and philanthropist in his life spent on the charity of the order of $ 5 billion. Most often it is a financial speculator, and he is especially known as the "man who broke the Bank of England ', set the stage for the" Black Wednesday "September 16 19 932 years.

Beginning of a career can be considered as a financier in 1956. D.Soros began with international arbitration, that is, the purchase of securities in one country and selling them in another. Soros has created a new method of trade, calling it a domestic arbitration - selling individually combined securities shares, bonds and warrants before they can be formally separated from each other.

Financial activities D.Sorosa was successful for more than forty years, and only at the end of the two thousandth's, he decided to retire from active financial activity and do charity work. George Soros made his fortune through playing for a fall ("bear" tactics), in which he used the theory, according to which decisions about purchases and sales of securities are made based on expectations of future price, and since expectations - a psychological category, it Information may be subject to impact. The attack on the currency of a country consists of a sequence of information attacks through the media and analytical products, combined with the real actions of currency speculators, shakes the financial market.

Market Forex - find your place!

Accessibility of the Internet allows you to actively develop online trading, which deals with financial instruments are made remotely. To be able to participate in the trading of financial need to have a landline or mobile computer with access to the Internet and register a trading account in our company.

Register your trading account now

SignalsBinary a financial platform that allows to profit from the efficient and successful investment funds on the international markets. We are interested in seeing our merchants achieve success when trading Forex. Our team looks forward to a long and mutually beneficial partnership with every client.

 

 

 

 

Mark Densel
Author: Mark Densel
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