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NPBFX Limited
Number of messages : 28
Points : 537
Date of Entry : 2017-03-18
Year : 47

Forex for Beginners

on Wed Sep 27, 2017 7:25 pm
What is FOREX?

FOREX is the acronym for the foreign exchange market where one type of currency is traded for another type of currency. FOREX is one of the world’s largest trading markets. While some traders on this market are just looking to exchange their own currency for a foreign currency, most participants are currency traders, which means they speculate on exchange rates and their movements, just like traders speculate on stock prices on the stock market. People who trade currency are trying to make money on the fluctuation of rates.

Rate fluctuations on the exchange are typically the result of actual monetary flows in addition to global macroeconomic conditions. All significant news that impacts the market is released publicly, so everyone who is trading on the market gets the news at the exact same time. This reduces “insider information” to almost zero.On FOREX, currencies are traded against each other and are expressed as xxx/yyy where xxx represents one currency and yyy represents the second currency.

So if you are trading euros against the U.S. dollar, one unit would be represented as EUR/USD or 1 euro = 1.0636 dollar. There is no universal exchange for a specific currency pair.The FOREX market is open 24 hours a day, Sunday evening until Friday evening. When the United States trading session ends, another session (Pacific, Asian and so on) will start. This means that all world currencies are constantly up for trade. Traders don’t have to wait until the market opens to react to significant world news. An average of $5.3 trillion is exchanged every day.
NPBFX Limited
Number of messages : 28
Points : 537
Date of Entry : 2017-03-18
Year : 47

Re: Forex for Beginners

on Wed Sep 27, 2017 10:22 pm
The History of FOREX

The FOREX exchange as it is known today began in 1973, but currency trading has actually been occurring since the first coins were introduced in the times of the Pharaohs of ancient Egypt. After World War II ended, though, the United States economy was strong relative to most of the European countries.

The U.S. dollar became the prominent currency at this time and was recognized as the global reserve currency. All other foreign currencies were measured against the U.S. dollar, which created a new financial network known as the Bretton Woods System. This agreement allowed currencies to fluctuate within one percent to the currencies’ par.

The Bretton Woods System was in effect from 1944 until 1973, when the agreement to use this market ended. The United Kingdom was faced with severe financial problems and began to float its currency.

This caused other currencies to drop in value and float their currencies as well. U.S. President, Richard Nixon is credited with bringing about the free-floating currency system that gave rise to the short-lived Smithsonian agreement in 1971. This agreement allowed currencies to fluctuate within a range of two percent of the currencies’ par. These boundaries were found to be too unrealistic and the agreement ended in March of 1973.

1982 marked the first time a currency pair was offered as a purchase option to the United States, with more currencies becoming available in 1983. By 1987, both the United Kingdom and the United States were trading heavily on the FOREX, but there were many other countries such as China, South Korea and even Iran (in 1991) participating as well.

The first online trading of currency occurred in 1994, which in turn led to the development of the Euro currency in Europe. The rise of the Euro threatened the dominance of the U.S. Dollar as the global reserve currency. The Euro is currently the official currency in 19 European countries.
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