A Currency Exchange & forex market , a guide

Author – Richard Kapsch

The Bretton Woods Agreement was initiated in 1944 in an effort to keep cash from draining out of war-ravaged Europe. Currency values were pegged to the U.S. Dollar, which was then pegged to the price of gold.

The modern era of foreign exchange first emerged in 1971 with the collapse of the Bretton Woods Agreement. The U.S. Dollar was no longer convertible into gold, signaling an increase in currency market volatility and trading opportunities.

The collapse in 1973 of the subsequent Smithsonian and European Joint Float agreements signaled the true beginning of the free-floating currency exchange system that drives the markets today. Starting in the 1980's, computer technology extended the reach of the exchange marketplace.

Today, the values of the major world currencies are independent of each other, with intervention available to the states only through the central banking system.

Today forex is one of the most exciting, fast-paced markets around. Until recently, trading in the forex market had been the domain of large financial institutions, corporations, central banks, hedge funds and extremely wealthy individuals. The emergence of the internet has changed all of this, and now it is possible for average investors to buy and sell currencies easily with the click of a mouse.

Daily currency fluctuations are usually very small. Most currency pairs move less than one cent per day, representing a less than 1% change in the value of the currency. This makes foreign exchange one of the least volatile financial markets around. Therefore, many speculators rely on the availability of enormous leverage to increase the value of potential movements.

In the forex market, leverage can be as much as 500:1. Higher leverage can be extremely risky, but because of round-the-clock trading and deep liquidity, foreign exchange brokers have been able to make high leverage an industry standard in order to make the movements meaningful for FX traders.

Extreme liquidity and the availability of high leverage have helped to spur the market's rapid growth and made it the ideal place for many traders. Positions can be opened and closed within minutes or can be held for months.

Currency prices are based on objective considerations of supply and demand and cannot be manipulated easily by individual retail traders. It is moved primarily by large banks, investment firms, and multinational companies who buy and sell currencies for the purpose of hedging their day to day business needs.

The forex market provides plenty of opportunity for investors. However, in order to be successful, a currency trader has to understand the basics behind currency movements.

The modern era of foreign exchange first emerged in 1971 with the collapse of the Bretton Woods Agreement. The U.S. Dollar was no longer convertible into gold, signaling an increase in currency market volatility and trading opportunities.

The collapse in 1973 of the subsequent Smithsonian and European Joint Float agreements signaled the true beginning of the free-floating currency exchange system that drives the markets today. Starting in the 1980's, computer technology extended the reach of the exchange marketplace.

Today, the values of the major world currencies are independent of each other, with intervention available to the states only through the central banking system.

Today forex is one of the most exciting, fast-paced markets around. Until recently, trading in the forex market had been the domain of large financial institutions, corporations, central banks, hedge funds and extremely wealthy individuals. The emergence of the internet has changed all of this, and now it is possible for average investors to buy and sell currencies easily with the click of a mouse.

Daily currency fluctuations are usually very small. Most currency pairs move less than one cent per day, representing a less than 1% change in the value of the currency. This makes foreign exchange one of the least volatile financial markets around. Therefore, many speculators rely on the availability of enormous leverage to increase the value of potential movements.

In the forex market, leverage can be as much as 500:1. Higher leverage can be extremely risky, but because of round-the-clock trading and deep liquidity, foreign exchange brokers have been able to make high leverage an industry standard in order to make the movements meaningful for FX traders.

Extreme liquidity and the availability of high leverage have helped to spur the market's rapid growth and made it the ideal place for many traders. Positions can be opened and closed within minutes or can be held for months.

Currency prices are based on objective considerations of supply and demand and cannot be manipulated easily by individual retail traders. It is moved primarily by large banks, investment firms, and multinational companies who buy and sell currencies for the purpose of hedging their day to day business needs.

The forex market provides plenty of opportunity for investors. However, in order to be successful, a currency trader has to understand the basics behind currency movements.

 Europe. Currency values were pegged to the U.S. Dollar, which was then pegged to the price of gold.

The modern era of foreign exchange first emerged in 1971 with the collapse of the Bretton Woods Agreement. The U.S. Dollar was no longer convertible into gold, signaling an increase in currency market volatility and trading opportunities.

The collapse in 1973 of the subsequent Smithsonian and European Joint Float agreements signaled the true beginning of the free-floating currency exchange system that drives the markets today. Starting in the 1980's, computer technology extended the reach of the exchange marketplace.

Today, the values of the major world currencies are independent of each other, with intervention available to the states only through the central banking system.

Today forex is one of the most exciting, fast-paced markets around. Until recently, trading in the forex market had been the domain of large financial institutions, corporations, central banks, hedge funds and extremely wealthy individuals. The emergence of the internet has changed all of this, and now it is possible for average investors to buy and sell currencies easily with the click of a mouse.

Daily currency fluctuations are usually very small. Most currency pairs move less than one cent per day, representing a less than 1% change in the value of the currency. This makes foreign exchange one of the least volatile financial markets around. Therefore, many speculators rely on the availability of enormous leverage to increase the value of potential movements.

In the forex market, leverage can be as much as 500:1. Higher leverage can be extremely risky, but because of round-the-clock trading and deep liquidity, foreign exchange brokers have been able to make high leverage an industry standard in order to make the movements meaningful for FX traders.

Extreme liquidity and the availability of high leverage have helped to spur the market's rapid growth and made it the ideal place for many traders. Positions can be opened and closed within minutes or can be held for months.

Currency prices are based on objective considerations of supply and demand and cannot be manipulated easily by individual retail traders. It is moved primarily by large banks, investment firms, and multinational companies who buy and sell currencies for the purpose of hedging their day to day business needs.

The forex market provides plenty of opportunity for investors. However, in order to be successful, a currency trader has to understand the basics behind currency movements.