For encouraging investors who have less than 1 million dollars to trade on Forex the mechanism of margin trading is used. This mechanism was introduced to world currency trading in 1986.Margin trading lies in buying/selling currencies, using leverage and ensuring deposit, which allows traders to make trading contracts on huge sums and do not provide the real money for it.Margin trading became possible as speculative interests on Forex can be sati...
Before World War I, the monetary functions were performed by the so-called "gold standard" or simply by gold. Paper money was merely representing gold in everyday payments and could be easily exchanged for real gold (its amount was indicated on every paper monetary unit). That is why no problems with setting the currency rate could arise as rates were based on existing gold parity. The mechanism of gold points could work only when the gold was fr...
The international currency market (Forex) is an inter-bank market that was formed in 1971-1976 when international trading changed focus fixed currency rates to floating rates. The rate of one currency to another as defined by mutually agreed exchange rate.Today the currency market leaves all other markets far behind in terms of its trading volumes. For example, the daily turnover for securities is estimated at 300 billion US dollars - Forex opera...