Forex is one of the tools that can be used today to prevent our money from losing its value and make profits in the process. To put it simply, Forex is the global market that allows the exchange of two currencies against each other.
For example, when you travel to a country you usually exchange the currency of your country for the one you are visiting in a currency exchange. In these places, you can see different exchange rates from one currency to another. You can find that an American dollar can cost 100 yen, and think that with 100 dollars you will have a huge amount of money. When you do this type of trading you are actively participating in the Forex market, as you are exchanging one currency for another. In Forex terms, you sold US dollars to buy Japanese yen. Anyway in Forex Academy you can find many more examples and tips on forex trading.
Continuing with the above example, when you finish your trip and you have money left, you go back to the exchange house and you see that the exchange rates changed. If you’re lucky, the dollar may have gone down and the yen may have gone up, so you’ll get more dollars for your yen. These changes in the rates of one currency against the other are what allow you to win or lose money and what makes this market so interesting.
This market was born thanks to President Nixon in 1971 when he withdrew the United States from the gold standard in order to allow the value of the US dollar to float. No one could accurately predict how Nixon’s action would create a global industry of more than several trillion dollars.
In recent years, Forex has evolved from a relatively unknown and unavailable investment tool to an almost global phenomenon. The accessibility that computers give to Forex trading, the sudden emergence of multiple software tools and various Forex websites, coupled with all kinds of training and advertising offered over the internet, have made many investors want to try their luck to make a profit through it. Today many people in the world who operate in this market and many others want to enter.
What does the future of Forex hold?
Without a doubt, the Forex industry has grown exponentially in recent times, as online currency trading continues its growing popularity escalation. As such, the structure of the market has changed due to the expansion of participation in the industry, which is highlighted by the growing number of Forex brokers. Performance within the market has also changed, as the foreign exchange market was traditionally dominated by trade between distributors.
Technology has undoubtedly been one of the keys to this growth and is playing a very important role present and future of this market. The increased ease of entry into the market is largely attributable to the growing number of services and platforms. These have been backed by technological advances, which have had wonderful results, such as reducing the costs of operations, increasing the speed of transactions, and increasing transparency. As a result, e-commerce activity in the currency market has played a crucial role, now accounting for about 70 percent of daily turnover, compared to only 30 percent a decade ago.
Technology will continue to play an inevitable role in the growth of this industry. The extent to which brokers adopt the latest technological developments will play a crucial role as they earn credit for having a growing customer base and increase their market share. Some of the most recent technological advances we can find are trading algorithms and software written on specialized platforms such as MetaTrader, which can advise traders what trades to do. They can also program them to do operations automatically on a live account, making the whole process much more effective.
In line with this technological evolution, the industry has also taken a course towards mobile trading apps. At the same time, developments in online payments further facilitate the business process.
The world is very chaotic, and it is important to keep money always on the move. Forex is an excellent option to prepare for future economic crises that can affect such an unpredictable world. All you need is to invest time in your learning to unlock the potential of this market.