Introduction To Forex and Its History

In my last post in this Learning Center series I  gave some brief insight as to my journey in the Forex. In this article I will go over some simple concepts and Forex history. The Forex is a cash inter-bank and inter-dealer market that was established in 1971 when bank float exchange rates began to materialize between countries. Liquidity in this market is like no other. Prior to the recent and explosive international growth of the Forex the industry was limited to master traders who positioned themselves with a $100 million dollar account and were connected directly to the inter-bank currency exchange. Today, the exchange of currency has expanded from master Forex traders, banks, and trading floors to include home computers. The simplest definition of the Foreign Exchange is the exchange of one currency for another. Unlike the traditional exchange of the stock market, one may earn profits whether buying or selling within the Currency Exchange AKA Foreign Exchange or Forex. Banks are guaranteed a buy or sell twenty-four hours a day by the inter-bank currency exchange float. Through broker relationships and trading margin establishment, leveraged accounts are established and individual Forex traders are allowed to enter the market with home-based computers. Individual Forex traders now share the same leverage guarantee banks have.

To compare the Forex to other markets, the current