The historical ways of evaluating the currency value of a country by worth of Gold, finally came to an end much later after the Second World War. Even during the first World War, the value of Gold has been used to determine the value of foreign currency of a country. However, US dominated financial world had introduced Bretton Woods Agreement in 1944, where the Forex trading used to consider the dollar value of the currency of the concerned country as the key parameter.
The objective had been to fix the dollar value based on the rate of gold of the concerned country. The aim of establishing a stable market to get rid of any global financial crisis by prohibiting countries to devaluate their currencies, had been hindered by the phenomenal growth of Forex trading, which demands freedom from such control to take the ultimate advantage of the continuous influx from the foreign market. In fact the reign of gold could hardly face the challenges of modern economic boom all over the world. However the story of Frankenstein came into being, the US dollar itself got devaluated and that hit the final nail in the coffin to end the Bretton Woods Agreement era in 1971, allowing the new dawn of free floating real Foreign Exchange Market of today's world.

Nevertheless US dollars have always been playing a major role in Forex and reserves of US dollar serves as the prime factor in determining the country's wealth even today. The concept of globalization and the open market of outsourcing because of its proven advantages have made the core concept of foreign exchange more pertinent, where the foreign trade is hardly limited to big merchants only, rather it has now entered into the desktop computers of the professionals in their bedroom, where the concept of work from home has got its overwhelming popularity as a mode of extra income.
Outsourcing jobs from US & UK to the third world countries like India, China, Malayasia have ultimately helped to increase the foreign exchange worth of the country. Besides the core market of Forex trading, a huge amount of exchanges in currency has been going on every day. Though Forex is a free market for all, but it has been tested to be season proof, in spite of market deregulation or share market fluctuations or even political instability of any country in particular. Currencies move freely across the geographical boundaries and in spite of such a free floating, none of the major industrialized countries has faced any blow during the last three decades.

The Internet realm has given us the unique opportunity of online foreign currency trading, which uses mainly forex exchange software. As the very preliminary rule of foreign exchange never generates any scope for a physical bank or exchange, central in nature unlike the share market, various companies have emerged in the recent past to build up a virtual trading platform, where a lot of people can participate even without much knowledge of the subject. If beginner becomes the prime reason of worry, then anybody can take help of various forex news, which are available all over the Internet. The pictorial representation of hike and downfall of foreign currencies will always give you the comfort and smoothen your decision making process.
Posted by Grundgecop at 12:58 AM 0 comments
What is Forex

Forex market is an international money market. Forex formed its name from foreign currency exchange operation: FOReign EXchange, or FOREX, for short. Forex is one of the youngest financial markets and has had its present appearance since the 1970s. Due to the sheer volume of the money market, Forex is the most dynamically developing market.Forex’s daily trading rotations reach 4 trillion USD, that is 30 times more than the general volume of all stock market exchange in the US. Like any other market, Forex trades certain goods. In the case of the money market, these goods consist of national foreign currency. Fundamentally, currency rates are set by government institutions as well as commerce companies all around the world that need to convert currency for trading in foreign countries. They make up 5% of the general currency market rotation volume. The other 95% comes from speculative trading on the part of traders trying to earn profit from buying and selling currency at fluctuation rates. An important money market feature is its steadiness.The main financial market danger comes from sudden drops, or when the stock index collapses. However unlike the stock market, Forex doesn’t drop. When stocks depreciate, that means a crash is coming. But should the dollar fall, this simply means that some other currency will become stronger.Let’s take a look at the yen for example. Within a few months at the end of 1998 the price of the yen increased by 25% in relation to the US dollar. On particular days, the USD decrease was measured with a tenth of a percent. However a drop in the USD, as with any other currency, could not cause the money market to crash, and trading would carry on as before. This is the key to the market’s steadiness, which works for businesses as well. Currency is the most liquid and secure trading tool.Speculators have a great interest in so called liquid or base currencies. Nowadays over 85% of all deals are in base currencies, often the following currencies: US dollar (USD), Japanese yen (JPY), euro (EUR), British pound (GBP), Swiss franc (CHF), Canadian dollar(CAD) and the Australian dollar (AUD).Important to getting to know currency trading is understanding the exchange rate notation system. This is relatively simple if you remember that all currency pairs are noted in the same way. Two currency symbols are present on either side of the slash “/”. The correlation of their cost to each other expresses the rate of the given currency pair: EUR/USD (euro to US dollar rate), GBP/USD (British Pound to US dollar rate), USD/JPY (US dollar to Japanese yen rate) and so on.When defining currency pair symbols, the slash (“/”) symbol is usually absent and the currency pair notation is written: EURUSD, GBPUSD, USDJPY.The concept of money market operations is pretty clear: you earn profit from the movement of one type of currency rate in relation to the movement of another currency rate. The entire currency market consists of currency pair rates, where each one reflects the relational cost of one national currency compared to another. For example, when people say that for 1 euro it is possible to get 34 cents, this means that the currency pair EUR/USD rate equals 1.3400.

Download trading terminal for PC
Trading terminal InstaTrader for PC (Personal Computer) allows you not only to execute transactions on the Forex market using InstaForex, but also to obtain market quotes in terms of basic currency pairs, crosses and also worldwide stock indexes, and company news and overviews.
Posted by Grundgecop at 12:55 AM 0 comments
Fact #2 Forex brokers are not your friends
Forex brokers are not your friends, but rather your partners — they will do business with or without you. I think you can pretty much conclude this from the first fact.
You need much and much more knowledge than brokers teach you in basic Forex trading courses, you'll need much more skills and practice to be able to trade side by side with Big Forex players.

There are, however, such brokers, who never trade against clients by "making an artificial market", instead they process your order to the global arena. Such brokers are called ECN brokers — companies that offer Electronic Communication Network trading.
These brokers earn their money on commission fees that traders pay each time they open a trade. Thus, an ECN broker is interested in a long-term partnership with a client and client's overall success, so that a client will continue bringing profits to the broker by executing new orders.

What other surprises Forex brokers have in stock for you? Forex lesson on brokers' creativity will provide the answer.

Posted by Grundgecop at 12:54 AM 0 comments
Fact #1 What Forex brokers want you to know and what don't
Did you know that majority of Forex brokers which operate as market makers (Market makers don't put your orders on the global trading arena, they literally make the market for you inside their company by Buying what you Sell, and Selling to you when you want to buy), so, did you know that those brokers play odds game when luring you to open small accounts with them? They are more than confident that you'll lose your first account within 2 to 3 months of trading, and, since they make the market for you — trade against you — they'll have that money as a profit.

Forex brokers are excellent risk managers, so don't worry about them if you think they'll lose when you begin to win. They analyze clients' trading and risks, so that while still taking trades against one "easy target" client, they'll protect themselves against more advanced clients by not trading against them, but rather offsetting risks by immediately placing equal orders with other financial companies.
Good explanatory scheme about Dealer System can be found at http://www.100forexbrokers.com/stp-ecn-brokers

Besides that, we all know that brokers earn their income on spreads and commissions.
Forex brokers have direct interest in having you as their client; they won't tell you all those trouble stories about Forex trading truth to scare you out; their goal is to show that making money in Forex is an achievable goal, and you can be successful. To make you even more confident they'll offer low spreads, free trading signals and market reports, they'll give you tons of trading tools and advices, they'll even give you free strategies to trade upon... and yet, you are going to fail sooner or later, and they know it. Market maker Forex Brokers compete for clients, because if a client fails, he'd better bring that money to their company and not to a competitor.
Posted by Grundgecop at 12:54 AM 0 comments
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