The trading parties may be Financial Institutions, Multi-national corporations, Banks, Central banks, Hedge funds, Money changers, Insurance companies, Speculators or Individual traders.

FOREX HISTORY

• The modern online Forex history begins in 1973. Even though currency trading has been around since the times of ancient Egypt, which at that time the market was extremely primitive, and there were no advance trading tools as today’s fundamental analysis, for example.

• The first currency coins were used at the times of the pharos, and the first paper notes were then introduced by the Babylonians. Later on, the roman coin called aureus was used, which was followed by the denarius. Both coins had worldwide use, making them the first global foreign currency coins.

The Bretton Woods System (1944-1973), came after the great instability of World War II. England and other European countries were left in ruins, after the war ended, while the US’s economy was left relatively stable and strong.

The USD became the prominent currency after WWII, mainly because of the war. The Dollar also became the new global reserve currency, and remained so throughout the rest of the Forex history. This was agreed upon in the Bretton Woods conference, when all of the other foreign currencies were pegged to the USD, and a new international financial network was formed.

In 1971, the Smithsonian Agreement was signed by ten of the major financial powers, but it’s attempt to improve stability to the current Forex history failed.

Free Floating exchange rates came into use when the Bretton Woods agreement ended. This occurred after this international financial system was in operation for three decades in the Forex history.

During 1973, the UK, facing financial problems, floated it’s currency. Other currencies began to lose value, and this led the European economies to also float their currencies.

1994 saw the first online currency trading introduced to Forex history. This had a large impact on the development of the Euro currency, and introduced a new major contender to the control of the USD in the Forex history. By 2002 the Euro became the official currency for 12 European nations, and in the past few years more nations have joined this agreement. The modern online forex history offered new options for the online trader, such as the use of margin account to leverage investments, and this is all thanks to the contribution of the internet to the forex history.

Forex is the marketplace for trading all the world’s currencies and is the largest financial market in the world.  It’s a decentralized market place that facilitates the buying and selling of different currencies in an agreed price. The vast majority of currency conversion is undertaken with the aim of earning a profit. The amount of currency converted every day can make price movements of some currencies extremely volatile. This volatility make forex so attractive to traders: It is estimated that, on average, $7 trillion is traded each day in the world Forex Markets.