A few years back, one of my mentors told me that it didn’t matter how much money I made in trading options or in business.
While I didn’t understand the gravity of his words, the thought of losing everything I had worked so hard for and spent so much time on made me want to learn. A brief history of the beginnings of the currency markets:The earliest economies in human history were based on┬ásimple bartering systems wherein one valuable commodity or good was traded directly for another. Valuable goods such as grains, livestock, and precious metals were deposited for safe keeping around temples and palaces.
In the 5th Century BC, the use of coins spreads from Lydia to Greece.During the next several hundred years, the Persians and Greeks used this newly established and highly portable form of currency to wage war on each other. Because of this manipulation inflation levels fluctuated and at times soared leading to rebellions and revolutions.In the year 306, Constantine secured control of the Roman Empire and removed the old currency from circulation and replaced it with the Solidus, whose weight and purity remained unchanged for the next 700 years.


As a result, over the next 20 years, inflation for the denarii rose 300% and created huge disparity between the rich and the poor. The definition of a reserve system is a foreign currency held by central banks and other major financial institutions as a means to pay off international debt obligations, or to influence their domestic exchange rate. A large percentage of commodities, such as gold and oil, are usually priced in the reserve currency, causing other countries to hold this currency to pay for these goods. Holding currency reserves, therefore, minimizes exchange rate risk, as the purchasing nation will not have to exchange their currency for the current reserve currency in order to make the purchase. In essence, what the reserve system does is force other countries to hold the reserve currency to aid debt and trade in the international markets. While there have been many reserves in history such as the Greeks, Romans, Byzantine, Arabian dinar, Florence fiorina, the gulden, and Spanish dollar, it was the British pound in the 19th century that started the traditional system we use today where central banks started issuing debt that could be converted into gold.The forex market is what we call a directional market, this is also known as a speculative or delta based market as well.


The forex market is the exact same thing: we simply take one currency and exchange it for another. It is also important to note that you can buy or sell any currency.One thing that is different is that currencies are not traded as a single currency, but as a currency pair as you are exchanging one currency for the other currency.
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Comments

  1. PRINS_666

    Time will need to make sure that.

    21.04.2013

  2. AntikilleR

    Funding, binary options trading and you might.

    21.04.2013