Understanding Currency Trading Online

Forex is one the most important markets in the world. This market allows one currency to be traded for another. Although some traders are just looking to trade foreign currency, the majority of the market is comprised of currency traders seeking to make substantial profits, read more here.


The birth of the gold standard system was a landmark in Forex trading history. It was established in 1875. Every currency was equal in value to one ounce gold. This was a standard method of currency exchange.

World War 1 saw a collapse of the gold currency standard. Countries simply couldn’t afford to buy enough gold to exchange the currency their governments were printing to support war efforts. This gold standard was restored after World War I, but it was again dropped after World War II.

1944 saw the U.S. Dollar replace the gold standard to become the primary reserve money. 1971 was the last year that gold could be exchanged for U.S. dollar. This was the beginning of global floating rates, which were accepted in 1976. This was the birth the currency exchange we now know. This exchange was nearly entirely electronic in the 1990s.

What Currency Trades Do

Currency traders speculate on changes in exchange rates on Forex markets just as they speculate on stock price movements on the regular stock market. A currency trader can profit from small or large changes in exchange rates.

The foreign currency markets don’t have any real inside information so fluctuations in the exchange rate are caused by global economic conditions. Everybody knows about changes in currency as soon as they are announced.

Why Trade on FOREX?

Forex is the preferred currency trading platform for currency traders because it allows currencies to be traded 24/7 and can make a lot of money if done properly. This market is available five and a-half days per week. After the market closes in one area, it opens in a different time zone. Market prices can change rapidly and can be active. Market volatility can also be caused by the constant fluctuation in prices. Currency traders who don’t understand what they’re doing can lose their money as quickly as they make it. Trading is very popular once you have learned how it works.