What is currency trading ? - Mortrends

Forex Trading 

Forex Trading or Foreign Exchange is known as Forex, a decentralized global market in which currencies are traded and exchanged around the world according to currency exchange rates. The Forex market is one of the largest and most liquid markets where the average daily exchange rate is 5 Trillion dollars,This is a very large rate. All the global equities are not close to this volume. [1] The Forex market facilitates the buying and selling of currencies around the world. The mechanism for making a profit is by selling the currency in the event of a high price, There is a high degree of risk arising from swap transactions, which could lead to large losses for currency traders.

The currency is of great importance in the lives of individuals around the world. The individual needs to exchange and convert from one currency to another for the conduct of various businesses. For example, if a French tourist wants to buy a commodity from Egypt or pay for seeing the pyramids in Egypt , Will not accept the French currency there, as it must convert the euro to the Egyptian pound,Which is the accepted currency in Egypt, and therefore will exchange the currency according to the Egyptian pound at that time. This can be measured on different positions and different businesses, and thus shows the main reason that the exchange market is one of the largest and most liquid financial markets in the world. Individuals to exchange currencies is so important.

The most important thing that distinguishes currency exchange is that there is no central market for the exchange of cash; where the currency is traded electronically over the Internet, the various transactions between currency traders around the world using computer networks, and the market is open all day, 24 hours, The exchange and trading of currencies in each region according to the time in which, for example, at the end of the trading day in the United States, the trading market in Tokyo starts again, and the currency prices are constantly changing.

History of currency trading

In 1876, the idea of ​​stabilizing the world's currencies began by linking them to the price of gold. The gold standard was introduced. It was based on the consolidation of all paper currencies with solid gold. The idea was theoretically good; however, it led to stagnation and economic depression. The process, which led to the overthrow of this principle, and despite the decline in the price of gold, but was in fact eliminated this idea at the beginning of World War II; where the European countries did not have enough gold to support the paper currencies, which were printed in large quantities for the military funding .

In 1944, a decision was made to set fixed exchange rates and the US dollar was the only currency to be supported by gold. The system was known as Bretton Woods. In 1971, the United States announced that it would not support its currency In gold, and therefore stopped the exchange of gold against the US dollar, and decided not to link gold price and ended the Bretton Woods system, and in 1976 the foreign exchange market or foreign exchange market, which resulted from the acceptance of global exchange rates, Starts only m The mid-nineties solutions.