Let’s look at a little forex trading history through the ages. Although currency, mostly paper certificates, has been around in one form or another since the days of Babylon, the usage of coins as a form of currency was begun in the Middle East. Not much was going on in the foreign exchange markets between those days and World War I. This all changed, however, after World War I, when there was an exceptional increase in speculation in the market. However, following the great depression in 1931 there was a tremendous slowdown in forex trading. From that year until 1973, there was little or no interest in that market.
Since 1973, supply and demand has caused a great increase in the interest due to many industrialized nations currencies freely flowing. Speed of information and price volatility increased throughout the 1970’s. The trading volume on the forex market has increased from 10 billion a day to 2 trillion a day in a mere 40 years, and , today, has become one of the most dynamic markets of its kind.
Where it is Now:
A great number of day traders had previously traded primarily in stocks and futures. But the forex trading market has become more liquid and offers greater opportunity for fast paced trading and the flexibility of round-the-clock trading, five days a week, 24 hours a day in the US, Europe and Asia. This allows for quick response to news from other parts of the world, no matter what your location. forex trading is very popular with speculators. Those interested may trade in both a Bear and a Bull Market.
Those choosing to trade in the forex market have the convenience of access to online, real time, quotes. There is also a global indices chart. Online, there is also a global foreign exchange update daily posted by the Bank of Nova Scotia. Having access to so much information and market commentary is a great boon for dedicated forex investors. However, the forex trading market is not for everyone. It is complicated and there is potential for great losses without having the education to make informed decisions in your trades.
Make Sound Choices:
Regardless of the investing vehicle you decide to pursue, keep a sensible amount of capital intact liquid, particularly in this difficult economic crisis. Building a nest egg will be much harder in the years ahead, which implies caution in how and with whom you invest. More important in these times, is not so much to produce additional wealth, as it is to hold onto what you now have left, in anticipation of worse conditions ahead. It’s better to be safe than sorry. If you are interested in learning how to trade forex then take a look at cmc markets which is a great source for learning and practicing. The history of forex trading is lengthy and has been lucrative. However, it is risky, so proceed with caution.
During the beginning of World War I, the gold standard broke down resulting from the political tension resulting from Germany’s aggression. The European powers felt a need to large military projects and the financial impact of these projects was so widely felt in their economies that their gold reserves wasn’t enough to cover the currencies that were being printed. The gold standard staged a slight comeback between the two World Wars but by the start of World War II, most countries had completely dropped utilizing it as a means of backing their currencies. However, gold has never ceased to be the ultimate form of monetary value.
Just before the end of the Second World War, the Allied nations surmised that they would need to set up some sort of monetary system that would fill the void left from the demise of the gold standard. Over 700 delegates worldwide formulated the Bretton Woods System (named after the New Hampshire location where the gathering was held) in July of 1944. What resulted was the formation of the following:
- a method for fixing exchange rates with the different currencies of the world
- the US dollar replaced the gold standard as the primary reserve currency
- the creation of the General Agreement for Tariffs and Trade (GATT), the International Bank for Reconstruction and Development, and the International Monetary Fund (IMF) to oversee global economic activities
But as history has demonstrated, this too would come to pass primarily due to the fact that for nearly 30 years after the creation of the Bretton Woods System, the US had to run numerous balances of payment deficits in order to continue being the global currency reserve. At the outset of the 1970’s, the US gold reserves were so depleted that the US Treasury could no longer cover all the US dollars that foreign banks held as reserves and on August 15th, 1971 that the gold reserve window was officially closed.