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This page is about the history of the Forex Market. The Forex interbank market (FOReign EXchange market) was formed at the beginning of the 70’s in the last century. The main prerequisite for its establishment was the transition of the international trading from fixed currency exchange rates to floating currency exchange rates. The Forex market is a collection of contacts of agents working on a currency market and exchanging a particular sum of monetary units of a country for the currency of another country. The exchange rate is determined simply - by the supply and the demand. That is, the exchange is made only when the both sides agree to the current conditions. Thanks to the development of the international trade and removal of many currency limitations, the Forex international currency market has been constantly growing. In 1977, the turnover of the currency market was US$ 5 milliard a day, and in 23 years (as of the year 2000) the daily amount of currency participating in the conversion operations all over the world was almost US$ 3 trillion. It’s just an immense amount of money!
About 80% of all operations are speculation deals based on playing with differences in exchange rates. This activity involves both huge financial corporations and individual traders. At the present moment, the Forex currency market is closely connected with the most modern information technologies. Thanks to them, the activity on the currency market has become available to a most wide range of people. Using the systems of electronic trading, anyone who has a PC can become a currency dealer. Now even large banks prefer electronic trading to other kinds of currency operations. 11% of the FOREX market turnover are operations of electronic brokers. Many people get a false impression that FOREX is a place where you are catching the bluebird. Perhaps, there are people who have been simply lucky on FOREX, but they are only a few. Professional traders should say about this firmly: it all depends on the power of your intellect. One more feature of the currency market that we should pay attention to is its stability. Yes, don’t get surprised, exactly the stability, because FOREX, unlike the stock market, is not subject to a sudden shattering collapse. A crisis in a particular economic sphere provokes depreciation of shares of all companies that work in this sphere, while a crisis with a currency means only that some other currency has become stronger. The money is the most liquid commodity, it is sure to be always sold and purchased: this is the very factor which influences the stability of FOREX. FOREX is available 24 hours a day; it has no schedules, no opening and closing time. With the help of the Internet, being in Russia or another country of the world, you can make deals with clients who are on the other side of the globe. The currency market always gives you a chance to make a profit, as significant fluctuations in exchange rates happen several times a day. The mobility of exchange rates combined with the trader’s intellectual potential and the latest computer technologies allows the development of a highly profitable business. One more undoubted advantage of FOREX – is ease of entering this market. It’s impossible to set up a real business with the sum of money spent on learning the basics of the currency market, purchasing a computer and creating a deposit. Finding a reliable experienced broker is not difficult – the supply is huge on this market. The rest depends solely on the person who has decided to enter FOREX. The decisive factor in trading on FOREX is not the amount of investments, but the constant examination of the market, the growing understanding of its laws, universalization of your trading activity, and discipline in its conduct. The history has seen many examples when people relied too much on their capital and therefore ended in failure. The market is impossible to conquer with a swoop, but what you can and should do is to find out particular patterns, and foresee one or another pattern. The currency market has been changing considerably in the thousands-year history of mankind. But it is today that the changes one couldn’t even think of before have become possible: firstly, money is not tied to any physical carrier now, and secondly, thanks to computers and the Internet, most of the world currencies have been united into a single system that knows no limitations. |
