Investors can make money by trading between the major currencies of the world on the Foreign Exchange (Forex) Market. The Forex is the best market to trade on because it is the easiest and you can do it 24 hours a day, five days a week. When the goal is to come up with a good system, stick to it, and make money, this is hard to beat. When compared to the thousands of possible investments in other markets, the Forex Market is easy to use, and people can trade nonstop almost every day of the week. This makes the Forex a more and more popular trading partner.
From the Pharaohs to the Middle Ages:
Foreign Exchange Markets have been around since the Middle Ages and are still going strong. Even before that, different currencies changed hands between regions and countries. This has been going on since the time of the Pharaohs, when the first money was made. It looks like the Babylonians were the first people to use paper bills and receipts, which made it easier for people to trade money with each other.
World War I Centennial in the U.S.:
Foreign Exchange Markets were very stable from 1876 until World War I. Everyone was on the Gold Exchange Standard, which made things stable. Gold prices now backed up the currencies! There was one big problem with the gold standard, though. When countries got richer and could buy more things from other countries, their gold reserves would run out. The country's currency was backed up by the same gold reserves. As one thing led to another, it wasn't long before the country was in a recession. Then its goods would look good to people in other countries, and gold would start coming back into the country to fill its coffers. Under the gold exchange standard, there was just too much up and down. There had to be a change.
From the 1930s to the early 1970s:
In the 1930s, not long after World War I, Foreign Exchange Markets became too speculative, which made them ten times more volatile. Things were getting out of hand, and something had to be done about it. From the beginning of the 1930s to the beginning of the 1970s, the Forex Market went through many changes that are still visible today. In fact, the Forex Market as we know it today didn't even start until 1973.
After World War II ended in 1944, the major governments of the world met in Bretton Woods, New Hampshire, to decide how to handle Foreign Currency Exchange going forward. This was done so that each country's economy could grow and change in a regular way. The Bretton Woods Accord brought together currencies and the International Monetary Fund (IMF) so that the world's economies would be more stable. The major world currencies were all set to be worth USD 35 per ounce of gold against the Dollar. The agreement was also made to keep currencies from jumping from one country to another and to cut down on speculation on the market.
Up until World War II, most other currencies were measured against the Great British Pound (GBP). During World War II, the Great British Pound lost value because German Nazis made fake money and gave it to the British. This made the U.S. Dollar the standard by which other currencies were valued. In fact, the damage done to Europe during World War II made it possible for the U.S. Dollar, which had failed during the Great Depression, to rise from the ashes and become the most important currency in the world.
The Bretton Woods Accord didn't last long, but it did last until 1971, which was long enough for it to do what it was supposed to do, which was to give Europe and Japan stable money after World War II.
Right now:
The Forex Market as we know it today started in 1973, when currencies were put into a free-floating system because none of the agreements or accords were in place at the time. In 1978, it became the law that all major currencies had to be free-floating. All of the major currencies move on their own in the world today. They are no longer bound by a certain deal. This can lead to more speculation, and sometimes central banks have to step in to get currencies back to where they should be. The Forex Market is mostly driven by how much people want and need different currencies.
If you want to take part in the first market ever set up to make money from changes in currency, you might want to think about the Forex Market. It was the first and has been tried and tested. It's also easier to understand and has more money moving through it than any other market. This is important when you're trying to figure out how to trade to make the most money.
