By D Wood
May 25, 2012
A BRIEF HISTORY
The Forex, FX or currency market is the foreign exchange market. The Forex in its present form originates from 1973. However, it has been around, in some form or another, since the time of the Pharaohs. It is a market exchange for changing money from one form or currency to another. If you want to travel from one country to another, you would have to exchange money, and this is what the foreign exchange market does, it trades currencies.
In 1973 the Forex market was started as the Bretton Woods Accord was ended. The Bretton Woods system was started after the second World War, it consisted of a set of rules and procedures to regulate the international monetary system, and it tied …show more content…
For example, if you were to sell ice to the Eskimos, it would not be a popular product as they have so much of it, and you would not get the same price for it as if you were to sell ice to the inhabitants of a Caribbean island, where ice is a scarce commodity. In the same way, there is a huge currency market which just concentrates on a few select currency pairs because they are the most active currencies. If you choose to trade in a less used currency, you might find not so many people are looking for a trade thus making trading less profitable. The most active pairs are the GBP/USD and EUR/USD. The foreign exchange market is the largest and most liquid financial market in the …show more content…
You can trade the Forex 24 hours a day if you so choose. The currency market follows the sun around the world, the sessions flow as follows. If we look at all times as Eastern Standard Time, Tokyo will open at 7 pm EST and close at 4 am EST. London will be the next market, opening at 4 am EST and closing at 12 noon EST. London has the added distinction of being the largest, oldest currency center in the world. It accounts for around 36.7% of all the trades around the world, making it the most important global center for foreign exchange, New York would be second with around 17% and Tokyo third with around 6%. Another distinction about the London market is that the time slot from 4 am EST till 10:30 am EST is well-known to traders as being the most active time when a lot of big moves are made in the market. After London, is the time for the New York market to open at 8 am EST until 5 pm EST. Another good time for trading will be at 5 pm EST until 7 pm EST, because there will be lots of activity in the market at this time as