Foreign Exchange
-Getting Started on Forex-Investors.com
Introduction to Foreign Exchange
The Foreign Exchange is a huge financial market with daily volumes exceeding 4.0 trillion US dollars.
Most Influential Players in The Foreign Exchange Market
The most influential players in the Forex market are central banks, commercial banks, and institutional investors. Banks and institutional investors combined account for about 50% of daily turnover. Exporters, Importers, and other similar multinational groups account for about 10% of daily turnover.
□ Read more on: » The Basics of Forex Investing
The History of the World’s Exchange Rates
The 5th century B.C. silver drachma of Athens was probably the first currency that became accepted outside its issuing state. Since then, Gold has been the only real global currency. The Greek Drachma was followed by the Roman Gold Aureus and Silver Denarius which lasted until the early 4th century A.D. Afterward, the Byzantine Gold Solidus became the dominant currency, followed by the Islamic Dinar. During the 13th century, Florence Fiorino became dominant in the Mediterranean area, followed by the Venice Ducato in the 15th century. During the 17th century, the world’s dominant currency became the Dutch Guilder. Afterward, and until World War 2, the British Pound Sterling became the most accepted currency in the world. Since WW2, the dominance of the US Dollar is indisputable.
□ Read more on: » Exchange Rates History
Forex Regulation & Forex Investor Protection
Before opening and funding an account with a Forex broker, Forex investors should seriously consider the safety of their money.
Key Factors Ensuring the Safety of Forex Investor's Funds
There are quite a few variables that ensure the safety of money:
(i) Forex broker's regulatory status (license)
(ii) Forex broker's country of headquarters
(iii) Forex broker's compensation scheme in case of corporate insolvency
And after a Forex account is opened and funded:
(iv) protecting the account against Internet fraud
(v) protecting the account’s balance against extreme market volatility (trading small sizes and using tight capital leverage)
This article emphasizes the first 3 factors (license, headquarters country, and compensation scheme in case of corporate insolvency).
The Basics of Investing in the Foreign Exchange Market
The Foreign Exchange is a huge financial market with daily volumes exceeding 4.0 trillion US dollars.
Most Influential Players in The Foreign Exchange Market
The most influential players in the Forex market are central banks, commercial banks, and institutional investors. Banks and institutional investors combined account for about 50% of daily turnover. Exporters, Importers, and other similar multinational groups account for about 10% of daily turnover.
Central Banks
Central Banks play a key role in the currency market. Central Banks have the tools and incentives to control their domestic exchange rates in order to implement their monetary policies. Especially as concerns the American FED, the European ECB, the Japanese BoJ, the British BoE, and the Swiss SNB. You must never trade against these five (5) Central Banks.
The History of the World’s Exchange Rates
The different valuations of the world’s currencies have created the need for trading and hedging against market risk. The Foreign Exchange Market operates as a global platform for exchanging different currencies. Here is the short history of the world’s exchange rates.
Currencies that Dominated the World
The 5th century B.C. silver drachma of Athens was probably the first currency that became accepted outside its issuing state. Since then, Gold has been the only real global currency. The Greek Drachma was followed by the Roman Gold Aureus and Silver Denarius that lasted until the early 4th century A.D.. Afterward, the Byzantine Gold Solidus became the dominant currency, followed by the Islamic Dinar. During the 13th century, Florence Fiorino became dominant in the Mediterranean area, followed by the Venice Ducato in the 15th century. During the 17th century, the world’s dominant currency became the Dutch Guilder. Afterward, and until World War 2, the British Pound Sterling became the most accepted currency in the world. Since WW2, the dominance of the US Dollar has been undisputable.
The Basics of Forex Trading
The Foreign Exchange or Forex or Fx is the global market where governments, banks, corporations, and traders meet to exchange currencies.
What is the Foreign Exchange or Forex market?
The currency market is the world’s largest and most liquid financial market with an average daily turnover of over 4 trillion US dollars.
These are some facts regarding the Forex Market:
-The Forex market is open 24/5
-The most important currency trading centers are London, New York, Tokyo, Zurich, Frankfurt, Hong Kong, and Singapore
-Currency trading uses the ECN network (Electronic Communicational Network)
-The most traded currency is the US Dollar and the most traded pair is EURUSD
Subcategories
Trading Rules
Forex Trading Rules and Trading Tips for Currency Traders
