What is Forex Trading?
Simply FOREX is a term stands for Foreign Exchange
As the part (FOR) From the word Foreign and the part (EX) from the word Exchange.
First of all, be aware that the international currency market is the largest trading market at the moment.
You will understand the enormity of this market when you realize that the New York Stock Exchange, the largest stock exchange in the world, trades at $ 30 billion a day while trading in the currency market worth $ 5 trillion daily.
This is more than enough to realize the size of this huge market
Forex Trading History
Why is currency trading not common when compared to trade in stocks and commodities that have spread over a hundred years?
The reason is the freshness of the Covenant.
After the Second World War and specifically in 1947, when the victorious states signed the Bretton Woods Agreement to arrange the development of the world economic situation.
One of the conditions of this system was the revaluation of currencies against the US dollar as an alternative to gold as a means to help repair the damage caused by the war in Europe, and the most important result of this decision is the stability of the currency. Prices and set a minimum of volatility against the dollar and against each other.
For this reason, there was no opportunity for currency trading, which relied mainly on the purpose of currency fluctuations against the US dollar.
But in 1971, as a result of difficult economic conditions, US President Richard Nixon decided to separate the US dollar and currencies in Europe and Japan, which touched on the volatility of the currencies of Europe and Japan under the influence of strength or weakness of the US dollar and the American economic system,
From this history, the Forex market has grown simultaneously in the US, Europe, Japan, and other countries
How many traders are involved in forex investing?
However, given the modernity of the market and the lack of easy means of communication to capitalize on these price fluctuations, only major financial institutions had to trade in this huge market and it was impossible for non-bankers or small traders to invade this market.
But with the continuous development of communications and the rapid spread of computer and Internet use,
a large number of enterprises have managed to trade currencies and take advantage of opportunities that ultimately lead to great profits and very quickly.
As you know, the global forex and currency market is the latest market among all the stock markets, making it vague and unknown to most people who have been accustomed to trading stocks and commodities for decades, where the number of traders in the Forex market is about 4 million traders, according to the recent studies and by the utilization by forex brokers the advantage of what we called Margin trading the number of small traders has been grown in a massive way day after day.
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