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Forex History: The Development Of Currency Trading And The Global Market

admin — Mon, 06 Sep 2010 14:57:21 +0000

Forex history is a fascinating subject that many traders do not even
think about. Forex has evolved massively in the last few decades but
the development of currency trading you will see that

forex history goes back a long way.

Early in the history of humanity there was no currency. People would
exchange goods and services based on whatever value those things had
to them. Pretty soon, however, most societies moved to a system where
all goods and services were valued in terms of one particular range of
items which became the currency. Studying forex history shows that
this might be precious stones, beads or teeth, but in most parts of the
world metals such as gold and silver were used.

Forex History: Currency Trading

Metal coins had the advantages of being easy to store, easy to weigh
and therefore regulate, and difficult to mine and copy so that the
market would not be flooded. Nevertheless they were inconvenient for
large payments to or from governments and kings. Soon, paper currency
began to circulate. This would originally be in the form of written
notes or IOUs promising to pay a certain amount of money. Eventually,
most countries established central banks to produce and regulate the
national currency. This was the beginning of forex history.

Until World War I it was always theoretically possible to go to the
central bank and ask for gold or silver in place of your bank notes.
Of course, this very rarely happened in significant amounts and many
national banks stopped keeping enough gold to cover. Occasionally,
however, such as in Germany after World War I, there would be a
disastrous run on the banks, leading to crazy inflation and the
collapse of the national economy. This was a major factor in the rise
of the German Nazi party and therefore could be said to have caused
World War II.

To prevent a similar disaster happening in a vulnerable nation again,
the Bretton Woods agreement was drawn up in 1944. This ‘permanently’
pegged all national currencies to the US dollar, and fixed the value
of the dollar against gold at $35 per oz. Around the same time, the
International Monetary Fund and World Bank were created to assist in
maintaining international economic stability.

Forex History: The Gold Standard

This held until the early 1970s. However, nations were developing at
different rates and in different directions, and in 1971 President
Nixon suspended the gold standard. The US dollar was dropped as a
reference point for most of the major national currencies, and the
relative values of different currencies began to fluctuate according
to economic conditions and market forces.

Suddenly it was possible to trade in currencies, and the financial
institutions were quick to recognize the potential. Banks had to
exchange money to supply their customers with foreign currencies for
travel and importing goods, but pretty soon they were exchanging far
more than they needed in order to profit from the continual rise and
fall in the values of the different currencies.

Gradually, private investors joined in the game and the forex market
mushroomed. The development of the internet meant that the market
became accessible to anybody, in theory. To accommodate the huge
numbers of potential new clients and because their costs were
dropping, brokers began reducing the minimum investment amount. At
this point in forex history, daily trading turnover has reached
between $3 and $4 trillion, more than the trading volume of all of the
world’s stock and bonds markets added together.

Forex History: The Development Of Currency Trading And The Global Market is a post from: Great Forex World

Forex Nitty Gritty Review

admin — Thu, 14 Jan 2010 20:41:00 +0000

In this Forex Nitty Gritty review we will take a close look at the new forex training system designed by Bill Poulos and his son Greg. Bill is a forex trading veteran with 35 years experience including trading and training others to trade successfully. So what exactly is Forex Nitty Gritty? What does it cover, is it right for you and how does it perform in practice?

What You Get

Forex Nitty Gritty is a full forex training system aimed at people just starting out in forex trading. If you have been attracted to the idea of speculative currency trading in order to make money online from home, but you really do not know much about foreign exchange trading or how to do it successfully, then you are going to need a good training system. Forex is extremely risky and if you jump in at the deep end without knowing what you are doing, you risk losing a lot of money. So read on to see if Forex Nitty Gritty could be the system that you are looking for.

As the name suggests, Forex Nitty Gritty covers all you need to know about forex trading, including how to get started. It covers the usual necessities like how to choose a broker, risk management, how to use charts, and which indicators you need (plus which you ones you don’t need and can forget about).But most importantly, you get a step by step trading method that allows you to take advantage of the mini trends that happen many times a day in the currency market. Unlike the stock market you can profit from currency trading even when the price is falling, so you have twice the opportunities to trade. This means that you can use a short term day trading system and be out of the market with your profits very fast. This is a system that focuses on the highest probability, lowest risk trades.

REVIEW FOREX NITTY GRITTY

As Bill Poulos says, this strategy can make trading a lot less stressful. And since stress is one of the main reasons why we make bad trading decisions, keeping a clear head is vital to success.The day trading system is simple and can be covered in as little as 20 minutes per day. This means it is something that you can easily do even if you do not have much spare time. Forget any ideas of having to be at your computer 24 hours a day to spot trading opportunities. With this system you can just log on and trade for a very short time, then get on with the rest of your life. This allows you to grow your funds from a low starting balance, while still covering a day job or family responsibilities.

Who Is It For

Forex Nitty Gritty is aimed at beginners who want to make money with forex trading. If you are attracted to foreign exchange as a way of making money but have not got started yet, this could be for you. It could also suit you if you have dabbled a little in forex trading but have not actually managed to make any money. Maybe you are even beginning to give up hope. Or perhaps you have used a forex robot, but without much success. Forex Nitty Gritty could suit you in any of those circumstances, and will put you back in control of your trading.On the other hand if you are already trading currency successfully with your own system, you probably do not need Forex Nitty Gritty.

GuaranteesThere is a 30 day refund guarantee if you are not 100% satisfied. Simply return the course for a full refund.In summary, Forex Nitty Gritty is a comprehensive introduction to the risky world of speculative currency trading. It provides a practical guide that can get you started and teach you how to trade for real so that you have the opportunity to join the thousands out there who are profiting from forex trading.

To learn more or get Forex Nitty Gritty Click Here

Forex Nitty Gritty Review is a post from: Great Forex World

Forex Chat: What Is Forex Trading?

admin — Wed, 13 Jan 2010 15:36:00 +0000

One of the most often seen questions in forex chat is, what is forex trading? This is due to the number of new people who are attracted to forex trading by advertisements and word of mouth, because they have heard there is a lot of money to be made here.

Forex is short for foreign exchange and it involves the exchange of one foreign currency for another. Therefore, forex trading can also be called currency trading.

The different currencies of the world are constantly fluctuating in value. Currency values are relative: you have to sell one currency to buy another, so if you take a pair of currencies such as the US dollar and the British pound, if one of them falls then the other will rise. If you can predict which one will rise, you can invest in that currency, wait for the rise and then change your money back. This is how a basic forex trade works.

To get involved in forex trading, you need a computer with a high speed internet connection, and then you need to find a broker and open an account. Brokers these days all operate on the internet so you can manage your own account and place your trades live from home, or wherever you and your computer are right now. You just log into your broker account and make the trade.

Sounds simple, right? However, there are risks. In fact, there are considerable risks. Forex trading uses high leverage, which means that you can control a lot of money with just a small balance. You might put up 1% of your trade or even less.

This is possible because currencies do not generally crash in a very short time. Even if one currency suffers a considerable fall, it will retain the majority of its value, provided of course that you are dealing in one of the major world currencies. However, this high leverage does mean a high risk for your small balance. Of course if you are successful, it also means a high return on your investment. This is what draws so many people to forex trading.

In order to control the risk, you can place a stop loss so that your trade is closed automatically if the price goes against you. All trades should have a stop loss in place so that you do not risk all of your funds on a trade.

These days it is even possible to buy a forex robot to trade for you. This is automated forex trading software that interfaces with your broker account to open and close your trades automatically. Forex robots or expert advisors are easy to find but they are not all equally successful. It is important to find a good one and then set it up correctly.

Even with a forex robot controlling your account, it is still possible to lose money. The forex market is not so predictable that any system can be 100% accurate. Therefore, nobody should be trading with the rent or food money. Even assuming that you are successful, you will want to leave the money there so that it can grow to support larger trades and higher profits in the future.

So even though forex trading can be very profitable, it is something that will be a part time hobby for most new traders at first. If you want to make enough money to live on, you need a large investment fund, and these take time to build. This is a point that is often overlooked in forex chat.

Forex Chat: What Is Forex Trading? is a post from: Great Forex World

Foreign Exchange News: Avoid These 3 Traps

admin — Wed, 13 Jan 2010 15:27:00 +0000

Foreign exchange news can be a good basis for day trading and forex scalping techniques, but there are some pitfalls that you need to avoid. It is all too easy to get trapped in a losing position when trading around the time of foreign exchange news announcements. Here are 3 possible problems to watch out for.

Foreign Exchange News

1. Spread

Spread can be the bane of the forex day trader. It is hard enough to maintain a profit on short term trades with a regular spread cutting into each one, but around the time of news announcements the situation worsens. Many brokers will increase spreads because of the uncertainties and the low volume of trading around that time. In some cases brokers will not implement new trades at all.

So when planning trading around the time of news releases, it is vital to take into account the likely higher spread, as well as checking that your broker will honor your trades. Some brokers will guarantee this, but the spread is still likely to be anything up to 5 times the normal level.

2. Slippage

Slippage is the difference between the price that you saw on your screen and the price that you actually get. In normal circumstances a trader might expect to get the price that he clicked on, although this can vary from broker to broker. Some have a reputation for nasty slippage even at steady times. However, when there is a foreign exchange news announcement, the prices will be moving so fast that slippage is extremely likely and can be big enough to cut into profits in a big way.

3. Effect Of Expectations

When trading on the basis of foreign exchange news, it is very important to take into account the prior expectations in the market. To take a simple example, imagine the US GDP (gross domestic product) is about to be announced. Generally speaking, if the US GDP is high, the US dollar will strengthen. So a trader who is expecting the news to report an increase in the GDP might invest in the dollar just before the foreign exchange news is due to break.

However, it could be that the foreign exchange news that market was expecting a high GDP to be reported and therefore some of the rise in price had already happened in the days leading up to the announcement.

If the foreign exchange news report is as expected, there will not necessarily be any further improvement in the value of the dollar. Worse, if the GDP is up but not to the extent that was expected, the dollar could actually fall following the announcement.

So a short term trade right around foreign exchange news releases will only pay off if the figures announced are significantly different from what was expected. Therefore it is clearly important for a day trader operating around foreign exchange news announcements to take account of the expectation in the market, as well as the likely figures to be released.

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Learn more about Foreign Exchange News visit this category in Great Forex World: Currency Trading Information Forex Factory News

Foreign Exchange News: Avoid These 3 Traps is a post from: Great Forex World

Forex Trading Guide by Ian Wright – ArticleCity.com

admin — Wed, 30 Dec 2009 03:30:43 +0000

Get a great free eBook on Forex 101, over 50 pages of pure content, no fluff or filler, just pure forex content. Get your copy now, see how on the right hand side.

Like many people I am sure you are interested to know more about Forex trading. To put it bluntly Forex trading can be either one the best ways to make or lose LOTS of money. Only those who take the Forex market seriously will be able to make money with it in the long term.

The Forex trading market is beyond a doubt the world’s largest market where all exchanges happen instantaneously. Thus, trades are a key challenge for even the most knowledgeable Forex bankers and traders. They have to learn and consider many factors before performing even a single trade.

At first when currencies began to be traded openly, only large banks were allowed to perform trades. These days, due to the advent of internet trading and margin accounts almost anybody can begin Forex trading. This in turn, has added to the liquidity of the Forex market, and has resulted in a huge increase in the number of individuals who are now active in the market.

So, does this mean it is easy to earn money through Forex trading? To answer this we must consider a few things.

Some data by Forex brokers seems to suggest that 90 percent of traders end up of losing their capital, 5 percent of traders have been able to break even and only 5 percent of them attain steady beneficial results. Thus, it seems that trading successfully is no simple task.

However, if you can learn to be among the 5 percent who make consistent money you can do extremely well by using Forex trading. To help you in this end I have listed five key ways to improve your odds dramatically of making money in the Forex market.

1. Education

Successful traders are knowledgeable about the Forex market. They have chosen to educate themselves about every single vital detail of Forex trading. The best traders know that every trade that they perform is an opportunity to learn something new.

2. Forex Trading System

All of the profitable traders have a Forex trading system or strategy. Furthermore, they have the will power to stick strictly to that system, because the best traders know that by sticking with their system they stand a far greater chance of earning money.

3. Price Behavior

Knowledgeable and successful traders also include price behavior in their systems. They have learned that prices can change quickly and suddenly but are prepared to deal with those situations when they arrive.

4. Trading Psychology

First-rate traders are aware of psychological issues that affect the choices of other traders make when Forex trading. They know that people do not always act rationally, and as a result this can alter the expected outcome of a trade. This can help them both when deciding to enter into a trade or when to exit.

5. Money Management

This is far and away the most important factor that will determine whether or not you become a successful trader. Averting the hazard of financial ruin is the main concern of all top traders. This means both adequately funding your trading account (only with money you can afford to live without of course) and never entering into trades that can potentially wipe out all of your assets. Better to start trading small and always use stop-loss orders to guarantee that your first trades are not also your last.

This is by no means an exhaustive list of everything you need to know but it outlines some of the areas you need to consider before making even that first trade. Now you know that it is not easy to earn money in the Forex market, however it is achievable.

However, success does not happen overnight and anyone promising you that it can is trying to sell you snake oil. It is an ongoing processes not something you pick up in a weekend. Trading success depends on the trader, and how hard you are willing to work to achieve your Forex trading goals.

Also, remember to try to have some fun. The clearest sign that Forex trading is not for you is if you find the prospect of learning about how the Forex market works boring or dull. If this is the case you won’t stick with it long enough to make money and you will be among the 90 percent who fail. Just remember these three important things: be disciplined in your trading habits, manager your money wisely and enjoy the experience of Forex trading.

About The Author

Ian Wright has always been fascinated with all forms of investing. Most recently, he has created a Free Forex Training Guide: http://www.free-forex-training-guide.com and has started a Forex trading blog: http://forex–trading–blog.blogspot.com.

Get a great free eBook on Forex 101, over 50 pages of pure content, no fluff or filler, just pure forex content. Get your copy now, see how on the right hand side.

Forex Trading Guide by Ian Wright – ArticleCity.com is a post from: Great Forex World

Best Forex Broker

admin — Mon, 21 Dec 2009 09:02:00 +0000

Get a great free eBook on Forex 101, over 50 pages of pure content, no fluff or filler, just pure forex content. Get your copy now, see how on the right hand side.

Best Forex Broker is a post from: Great Forex World