See also
Forex market (FX market) is an interbank currency exchange market. The term Forex is used for a currency interchange only, not for denoting all types of currency operations. The currency market operations can be trading, speculative, hedging or regulatory.
Thanks to fast development of a global net, Forex market offers real opportunities for every person of any age. Only Internet access and a trading platform are required.
In August 1971 the President of the USA Richard Nixon refrained from free convertibility of the US dollar into gold, and in December 1971 the Smithsonian Agreement was signed in Washington, according to which a 1% currency rate fluctuation versus the US dollar was replaced with 4.5% (for 9% of currency pairs which do not comprise the US dollar). This put an end to the system of the fixed currency rates. These reforms were targeted to make the policy of gold prices more liberal. Before the changes the currency rates were stable due to the gold standard, however, after that the floating gold prices led to an inevitable wobble of currency rates. This event gave birth to a new activity - currency trade, when the exchange rate became dependent not on a gold equivalent of a currency, but on the market supply and demand in this currency. In January, 1976 during the meeting of the IMF countries ministers in Kingston a new agreement on the international currency system was signed in the form of amendments to the IMF Articles of Agreement. A number of countries refused from pegging the national currencies to the US dollar or to gold. Nonetheless, only in 1978 this was permitted officially by the International Monetary Fund. From that moment on, the floating currency rates have become a principle of the currency exchange.
The new currency system was not based on determining a purchasing capacity of money on the ground of its gold equivalent value. The countries money - the treaty participants - stopped to have the official gold value. The exchanges started to be carried out in a free currency market at flexible prices.
Establishment of a floating rates system had led to that central banks received a right to affect the currency rates and exert influence on economic situation in the country by applying certain measures.
Importers, exporters and bank institutions supporting them became regular participants of the currency market as the liquidity of currency rates now can be reflected in financial results of their work either positively or negatively.
There are no accurate figures, as this market is over-the-counter, and there is no compulsory registration and publication of operations data. In 2005-2006 the daily Forex market turnover was changing by different estimations within the range of 2-4 trillion US dollars. A part of this turnover is provided by a marginal trading which allows conducting contracts for the amounts exceeding the real monetary funds of parties. Regardless of the character and the targets of operations, a huge turnover guarantees high Forex market liquidity.
There are plenty of adverts in the Internet about the ways to collect profit on Forex market, however, one should take into account that this work is not a full-time occupation and has no steady salary. Only you can determine your wage, depending on your loss or gain. This business is about starting capital and inevitable risks.
Marginal trade on Forex has a number of peculiarities: there is no career ladder, no huge initial capital, the operations are similar and do not require constant education, potential yield rate or loss risk are high. These characteristic features make the marginal trade attractive for beginning the stock exchange activity with a small start-up budget.
You can familiarize yourself with market trading on demo accounts. For that purpose you only need to choose a broker that interests you, download a trading platform and register a demo account. Every business can bring either yield or loss. To make profits exceed losses you have to study the FX market and the nuances of trade. As soon as you are able to observe the rules of currency market, you will become a successful trader.
