Forex History

Since 1867 the "gold standard" has been in use to allow a national currency to be exchanged only for gold in order to "return" money and prevent governments from arbitrary emission, which accelerates inflation. But this "standard" was not able to solve all problems.
The country's growing economy led to the import increase to the point where gold resources were depleted. As a consequence, the amount of money in circulation decreased, interest rates grew and economic activity slowed down to the stage of recession. Then prices usually fell and other countries started to import cheap goods which led to an increase in gold reserves, monetary growth, lower interest rates and overall strengthening of the economy of the initial country. Most countries had been developing according to this "boom-bust" model before World War I, which interrupted the flow of commerce and gold.
After World War II and until 1971 there existed the so-called Bretton Woods agreement under which exchange rates of national currencies were fixed to the dollar, and the dollar itself was pegged to gold with the price per ounce set equal to 35 dollars. It was prohibited for countries participating in the agreement to conduct devaluation in order to improve the exchange rate of its currency.
Post-war reconstruction of the global economy and the increase in trade between the countries demanded a reconsideration of the fixed rate, and in 1971 the Agreement was "temporarily" suspended. Then the history of Forex began. By 1973, currencies of the most developed nations were freely convertible, and their exchange rates were mainly defined by supply and demand. During the 1970s volatility and turnover increased, new financial instruments appeared, and currency trading began to attract venturers.

Forex Vs Stock

Forex (Foreign exchange market) is an inter-bank market that took shape in 1971 when global trade shifted from fixed exchange rates to floating ones. This is a set of transactions among forex market agents involving exchange of specified sums of money in a currency unit of any given nation for currency of another nation at an agreed rate as of any specified date. During exchange, the exchange rate of one currency to another currency is determined simply: by supply and demand – exchange to which both parties agree.A stock market, or (equity market), is a private or public market for the trading of company stock and derivatives of company stock at an agreed price; these are securities listed on a stock exchange as well as those only traded privately.Stocks are usually arbitrary pieces of a company that the board of directors issues to the public so that ownership of the company is distributed among everyone with a piece of stock.The performance of a company’s stock is directly related to the performance of that company greater profits generated by the company translate into higher stock prices. Stocks can be sold off to make a profit or held for future gains.

Forex trading tools

Forex Trading Tools
In my last post I touched briefly on forex trading tools. I would like to go into more detail about how to use some of these and maybe answer some questions that many new traders have. The very first thing for everyone to understand is that forex trading tools and indicators are two very different things. I don't want to insult anyone but when you're new to forex some of this can be very confusing.A forex indicator could be classified as a tool to some degree because you are using it to help you make decisions in the market. I don't place too much weight on indicators because they are lagging by nature. What I mean by that is they actually calculate past data with complicated formulas in an attempt to "predict" where the forex market will go next.

Forex trading Exchange

Once you've identified a trading opportunity, the next step is to decide EXACTLY when to buy - and this is where many traders go wrong.Here we explain how to incorporate better market timing into your FOREX strategy - so that you can make bigger profits.Most traders time their entry levels incorrectly, so here's the right way to do it:Using Support and Resistance CorrectlyA basic wisdom of market timing is ¡°buy low, sell high¡± - well, the reality is, if you try this in FOREX trading, you'll end up losing money. First, let's define what support and resistance meansA support level is a historical price that traders come in, and buy to ¡°support the market¡± ¨C and the more times it's tested, the more valid the support will be.

Foreign Exchange trading

Foreign exchange trading is generally conducted in a decentralized manner,with the exceptions of currency futures and options. Foreign exchange hasexperienced spectacular growth in volume ever since currencies were allowed tofloat freely against each other. While the daily turnover in 1977 was U.S. $5billion, it increased to U.S. $600 billion in 1987, reached the U.S. $1 trillion markin September 1992, and stabilized at around $1,5 trillion by the year 2000.Main factors influence on this spectacular growth in volume are indicatedbelow.For foreign exchange, currency volatility is a prime factor in the growthof volume. In fact, volatility is a sine qua non condition for trading. The onlyinstruments that may be profitable under conditions of low volatility arecurrency options.

Forex Trading made easy

Are you kidding me? Forex trading isn't easy, it's about as risky a financial endeavor as you can legally participate in.Wait, let me rephrase that... foreign exchange trading is easy, success isn't. Yeah, that's right, that's my tag line. It's true.If you are looking for the easy button, here are some platitudes for you:Buy low and sell high.Have inside access to national economic reports.Witness a major international incident prior to the news reports.If you are willing to work hard, be patient, and work to preserve your capital, then here are some more helpful suggestions:Wait for a buying opportunity before entering a market.Manage your risk via position size and stop loss orders.Learn to recognize when you should not be trading.