Forex trading is among the most popular financial market sin the world which has brought huge impacts in the trading world.

In the past, it was not impossible to make some transaction using electronic gadgets especially for the international payments which led to the silver and gold standard systems.Therefore, The history of forex is important in knowing the trends in the forex exchange market.If you are wondering when did forex start,Read on and find out.

History And Evolution Of Foreign Exchange

Lack of technologies made it difficult to process international payments. Therefore, I have provided A brief history of the foreign exchange market read and find out.

Gold Standard System

Forex history started in 19. century. This system was established in 1875 among the countries that were using silver and gold as the method of international payments.However, global supply and demand became affected on the international payments platforms because the value of these metals was not stable because it kept on fluctuating. This was the time when any amount would be converted to corresponding amount of gold as a standard system.

Despite the fact that gold had become a recognized monetary value the occurrence of world war brought some devastating effects to this system.

However nowadays the gold standard system is not used as a standard system but it plays a very crucial role because of its demand hence it has been used as an economic indicator because of its long term interaction with the US dollar.

Bretton Woods System or History of the forex market how it all began

So, when did the forex market start ? It was during Bretton Woods System.

Before the second world war camera to an end some countries striked a convention and decided to come up with an effective mode of international payment in Bretton which were attended by very many representative.After the convention the following aspects were brought on board:

-There was need to address the methods that were to be used in the forex exchange rates.

-The US dollar was seen as a perfect complementary to the gold standard system hence it has to be made a primary reserve currency.

There was the creation of international agencies who would supervise economic activities. These agencies include General Agreement on Tariffs and Trade(GATT), International Monetary Fund (IMF) and International Bank For Reconstruction and Development.

Relative economic strength in the floating exchange system is perceived as a long-term currency price change and the rate of interest between different countries whereas on the other hand short-term currency price changes means speculations, rumors, and disaster based on daily supply and demand for the currency.

Therefore central banks can intervene when there are extreme short-term current price changes as well as a floating exchange environment.That is why anytime the national currency is extremely low or high they can step in to ensure a balance is always maintained. The economy of the country is negatively affected when the currency is extremely low or extremely high and in the long run, the country will not be able to trade or pay off pending debts.

Therefore when this happens the Central Bank and the government tries to come up with intervention measures to help in moving the currency to a more favorable price rate.This is to ensure that the economic trends are stable so that the country can maintain its economic power.the good thing with floating exchange rates is that there will be no need for international management of exchange rates.This is unlike fixed exchange rates which are based on metallic standards.The currency of a country will depreciate if it has an account deficit.

Additionally, the floating exchange rate is more volatile and it uses scarce resources to predict the exchange rates. That is why the allocation of substantial resources to predict the exchange rate changes in an attempt to expose the rate risk.If the country is hosting high population of unemployed personel or inflation then floating exchange rates can be quite inappropriate because it might worsen the current situation.

The Electronic Communication Network

Top commercial companies traded free-floating finance markets because they had a good amount of money. Consequently,The internet and technology expansion has made it possible for any investor living in any part of this world to make a substantial investment in the forex market. When the brokers stormed in the market they started placing the electronic communication network instead of their clients which made them sell at a higher price so that they can make a profit out of it.

Retail and small investors who get an interest in forex trading can start trading with a small amount of money by signing up with a good broker.It is important to know that not all brokers are to be trusted because the Internet is full of scammers.Therefore you need to take the time to find an authentic broker who will help you to grow your account.

The electronic communication network has made forex trading very simple.You can now trade in the comfort of your home regardless of your location or time zone.This was initially introduced in the United States in the year 1990 to enhance electronic trading.This came to be because there were fast developments in technology and the internet.Signing up with the right brokers has been made easy with the electronic communication networks hence it seems top favours small traders.

Conclusion

The gold standard system was the first to be used in the foreign exchange market.Thereafter Bretton woods was developed after a meeting of 700 representatives but it, unfortunately, broke down. This paved the way for the floating exchange rate system which became popular shortly but it also followed suit and it failed. Therefore when the technology was flourishing electronic communication network was introduced in 1990 which completely changed the international monetary system because of the efficiency that it brought into the forex trading world.

So how old is forex ? Modern forex trading system developed after The Second World War.

Apparently, Forex has a long history and today the improvements that have been made are for the good overboard the small and advanced forex Traders. All this marks the important events in the history of the forex market.This gives you insight into how there has been an evolution in the exchange rates as Time goes.

No, forex is not rigged – forex trading is legitimate business as same as trading stocks or trading commodities, futures.
Forex trading is expanding its roots all across the world day by day and a lot of people have made incredible profits with forex trading. For some of the world’s population forex trading is a proper money-making source but there is also a category of people who believe that forex trading is rigged and it is not possible to make profits and money with forex trading.

So now the real question is that is forex rigged? And are all the people who claim that they have made money with forex trading just scamming? So if you have these kinds of questions, then this article is very beneficial for you. In this article, you will get all the information that will help you in clearing your doubts and queries.

There are many people who have been doing forex trading and have a lot of experience. So after researching and evaluating all the things that most of the experienced traders say and tell about trading, the simple answer is that forex is rigged but before jumping into any conclusions, understand the depth of this answer. Forex trading is rigged but not in a negative or fraud way, but in a way that it is manipulated and it is still possible to make decent money with forex trading if you have the proper knowledge. Everyone who is trading has full control and they can decide when they want to make and do the trade.

There is no shortage of trade ways and methods and you just need to figure out what is best for you. A lot of you might be confused about the rigged and manipulated thing, so to make you understand this properly, you have to understand that the majority of trading players are big commercial institutions like banks and they manipulate forex and other markets which includes futures, stocks, and cryptocurrencies but is true that making profits with the forex is possible. You just need to get you the trade volume with the required skills and mindset. Every power is in your hands. You will decide when to make a trade and when to get out but to make the calculated moves, you will need to learn. There are many YouTube videos available where you can easily get free knowledge.

Fx Trading: What Does it Mean?

Well, the fx fixing issue is not that in news from a very long time and it’s been a while when it was a headline on every mainstream media but it still arises sometimes. There was a time when banks conspiring with each other to create change in the market and at that time, this issue became the most talked thing and was everywhere. The reason why banks and other big players conspired together because forex is a huge market and it is not possible for a single bank or any big player to create a big change or movement in the fx market. Basically what happened in the forex scam is that the big players that are in the market for a very long time along with the different banks. These banks include Citibank, HSBC, JPMorgan, and many more.

So these big players and banks came together and manipulated the bank of Reuters which occurs at 4 pm (London time). So what they did was, they froze the prices during the time and it helped the banks in making a move right before the freeze and it results in a small change that was not that noticeable but that small turns into big when a lot of clients are taking your services for the FX trading. It results in a huge profit that is coming from the client’s pocket and the clients were not aware that their money is going. So it is always recommended that it is better to not to do any trade activity at the close market sessions and 4-6 pm EST for NY session is the suggested one.

Forex Manipulation?

As you may already that forex is the biggest currency market all over the world and transactions of trillions of dollars are happening every day. If talk about figures, then $5.3 trillion in transactions. As it the largest financial market, it can only be manipulated by bigger players. These major players are mostly investment banks, private equity firms, hedge funds, big corporations, and central banks.

Can You Do Forex Trading in USA?

The money you have deposited in your bank is used by banks to make more money with the help of forex trading and forex is not considered as an illegal activity in the USA. Forex is legal and anyone above 18 in the USA can do forex trading and invest their money. There are some rules like FIFO that help to protect the retail trader from any financial losses. If you use a USA broker, then there is a rule hedging is not allowed.

Most people hedge when they are in profit but everyone must follow this rule. Another point that everyone should take care of while using a US regulated broker that it is not possible to have short or long open on a pair and 50:1 is the leverage limit and all these rules and regulations are important because they help in keeping the money safer.

FX Fixing And Forex Scandal

It means that the government will fix the exchange rates between the two currencies. In simple words, at 4 pm London time daily exchange rates were fixed and on the basis of transaction time fix rates get calculated by WM- Reuters. This happened when many big players and banks like Citibank, JPMorgan conspired together and they banged the close. The term banging the close is a kind of disruptive activity used to manipulate the market in which the player buys or sells large quantities in an attempt to manipulate the prices and to distort the fix to make profits.

There are some changes in the forex like the 1-minute window changes to 5 min and the five-minute window is hard to manipulate and new changes for banks such as they are intended to hold to an ethical code of conduct but all the newcomers should try to avoid any kind of trade at the close of NY time session.

Forex trading is a changing market and when you have an open position through the trading day’s end, you can either get paid or can be charged with hefty interests on those open positions. This mainly depends on underlying rates of interest on two currencies in your pair. Your interest rate would also depend on how long you can hold forex position.

But answer is this : As you wish ! You can hold position 1 hours, a day, week, several months !!! Market conditions and your trading plan will decide !

Factors for holding forex position

How long can you hold a position in forex ? Here we have mentioned a few examples below, where we are going to present you the most accurate ways of calculating the total amount that needs to be charged or credited. While you might only factor in the broker’s commission and interest rates, there are a lot of other factors on which the storage for holding an overnight position would depend.

The answer here is that you can do as long as you’d like to! There wouldn’t be any limits for time but there are a lot of things to consider as these would be swaps and a lot of other fees that is carried by your broker that hinders some held profits.

The thing here to look out for is swaps. By swaps we mean a small fee charged for held trades and it can differ compared to a normal fee and this can also work well in your favor as you’re simply making more money off the swaps. There is a lot of other info on swaps as well. Various other factors to consider here are, the time-frame that you’ve entered or the analysis that you did.

A guideline generally followed by people is:

1hr entry: This position can be held ranging from an hour to a day entry: you can hold this for a minimum of 4 hours till a maximum of 2-3 days Daily entry: The minimum holding time for this is 1 day to maximum time of around a few weeks

These are somewhat typical holding times and what has been approached and traded before as well.

Most people typically close their trades by the day’s end or at least the week’s back end.

Then the following week you can look out for re-entry if the trade appears to be good.

There are various times such as GBP and USD pairs where you’re able to hold forex trades for long term with trading time of days and weeks. All these trades are quite good options to get you moving then only being with stop loss so here you’re able to lock in profits throughout the day. Later on you are also able to trade retracements as this would be the only way for hedging.

Of course, if you’ve approached foremost resistance, plenty of options would be available for you. While closing out on profits at this time you are simply able to move the stop loss like it was mentioned before.

As always you can simply make sure that you trade on demo levels before you’re thinking of trying on a few new strategies. A lot of options are available for twin trading when you’re having a demo account.

There are a lot of reasons as to why you would think of holding overnight trade as it would include that you’re watching continued weakness/strength signs or you simply go for profit that is long way ahead.

How can you go about holding forex?

The very first thing you need to do is make double check for stop loss and also you’ll have to be sure that you wish to keep it that way.

Later on you’ll also notice different swap points by the broker as this would also keep changing based on the current rate of interest and on different country forex brokers.

If you start noticing that resistance/support which shows up then maybe you’ll also be able to lock in any additional profits you make.

You can consider setting up something that is known as trailing stop that you can simply do with MT4 or with EA.

Here you’ll also keep on checking for all possible news. If some big news is there for you, you would want to reconsider as spreads are typically there. Big news and trade would also be against you.

These are a few essential things that you can consider. Also you’ve got a possibility that you’re looking to recover from previous lost trades. However, I wouldn’t make changes in stop loss to be sure that you’re being a part of the trade if you’ve never done trading before.

For how long you can stay in forex trading?

For this question you might find a lot of different variables, but mostly all this would totally rely on the beginning of the analysis. If this remains to be in contrast with the initial analysis, then it’s better to keep that trade out of options. Also again It would be highly advised to keep changing the stop loss that has been there but here it becomes quite an emotional situation to deal with especially when you’re losing on that particular trade.

Even when you’re trading emotionally, you can make this as your primary reason as to why you’re trading. Your way of trading would be similar to a robot and in due time this would be available.

If your trading deal touches a major support/resistance you can assure that you’ll be able to keep watch on price action whenever it becomes possible. In case if it doesn’t happen this way you can move up the SL or look and have profits partially at least for that particular area.

The emotion shouldn’t be taken out of a trade much earlier as this would to a certain extent be dependent on the mindset you’ve got and any other factor through which traders face issues.

There are a lot of indicators for determining the stock such as moving average and hull moving averages for existing trades that are working on different time frames while everything gets analyzed pretty quick at same time.

When it comes to how long you can hold forex position, traders can hold their trading positions for quite long that lasts anywhere from a few minutes to a few moving years. We can say that this is completely dependent on their objective as traders are mainly taking up their positions based on fundamental economic trends in different countries compared to other ones.

For example, a forex market trade with long term holding, or a position of trade purchase and hold would be quite fruitful for anyone who is used to making sale of dollars for buying euros in early 2000s and then they kept such position for many years. Great prospects of profits are available for strategies that are related to purchase and hold in forex trading and certainly additional profits when the particular trade features profitable overnight trading with surge in interest rates.

When does the forex market open after Christmas ?

The market for foreign exchange (Forex) is the largest financial market in the world, and the value of the trading volume daily is estimated at approximately $5.1 trillion. Hedge funds, banks and other large financial companies are the major traders in the Forex market. Usually the Forex market is open for trading all 24 hours of the day, and on five days of the week, starting Monday and closing on Friday. Saturday, Sunday are the weekend holidays for the Forex market. When the trading volumes are low due to holidays, off market trades can cause changes in foreign exchange rates with noticeable fluctuations. In addition to the holidays on weekends, there are other public holidays which affect the Forex market, changing it. These public holidays are Christmas, New Year Eve, and Thanksgiving Day.

Forex market opening after Christmas

Some Forex traders would like to find out when does Forex market open after Christmas. Usually the Forex markets remain closed on 26th December, the day after Christmas which is called Boxing Day. This day is a public holiday in Canada, Europe and Australasia. After a holiday for Christmas Day and Boxing Day, the Forex market will open on 27th market. However, this Forex market is mainly open for the central banks of different countries, it is often closed for retail traders. In some cases, the Forex market may be closed for the entire week starting from Christmas Day on 25th December to New Year’s Day, 1st January.

The Orthodox Church in Greece, Eastern Europe including Russia follows the Julian Calendar and Christmas is celebrated on January 7. Hence the Forex markets in these countries will remain closed on January 7, and open on January 8.

Please check in this website Forex and Bank Holidays Calendar in detail.

The market conditions change after the holidays and traders may have to alter their strategy for trading after considering these changes. Since most of the brokers are also taking a holiday on public holidays, hence traders are unable to trade without their broker. Since the Forex market is not located at a specific place, it is open all the time. However, all transactions are completed using online communication. Traders should be aware that though it may be a public holiday in specific countries of the world, the international Forex market never closes.

Internationally, the Forex market can be classified into four geographical regions Asian, American, European and Pacific. For each region, there is a city which is the financial center and the time frame for completing the various financial activities is also specified. Most people are believe that the Forex market is closed on weekend, they should realize that it is only closed for retail traders. It is always open for central banks of different countries and associated organizations. Hence the retail trader will find many changes when the public holiday is over.

Closed Forex market changes during a public holiday

Trading conditions in the closed Forex market during public holidays.

– Brokers are not available

The brokers are closed during public holidays and hence the market is also closed for the retail traders who rely on brokers. So the Forex market is less volatile since the trading volume is also lower.

– Lower trading volumes

In the Forex market, trading volume is amount of money which is traded during the specific time period. Since the Forex market is closed for retail traders on Christmas Day, the volatility is greatly reduced because of the lower trading volumes.

– Low Volatility

The main reason for the lowered volatility is the reduced trading volume. Due to the non-availability of brokers, the trading volume is reduced and volatility is also lowered.

Most of the financial markets in a country are closed, when there is a public holiday. When there public holidays in many countries like Australia, China, Europe, UK and US, all the financial markets are closed, and this has a greater impact on Forex trading.

Forex trading on public holidays

Usually only beginners to Forex trading or those who have finalized a strategy for trading on holidays will trade on public holidays. Each trader has a different opinion on whether it is advisable to trade on public holidays. Since beginners to Forex trading do not wish to lose the opportunity to make some additional money, some of the beginners will also trade on holidays. It is observed that these traders will not take the effort to understand market conditions and think they should not lose the opportunity to make some additional money. However, they do not realize that the market conditions are completely different on holidays.

A majority of the experienced traders in Forex, claim that trading on holidays is not profitable, since Forex prices could change any time. The main players in the Forex market are closed on holidays, hence the liquidity is less, making it difficult for the traders to analyze the market and trade. Since these main players are absent during bank holidays and public holidays, it has a major impact on the Forex market. Hence traders should be aware that they may be able to make some profit during holidays, yet it is so less that it is not worth the effort

Reasons for not trading Forex during holidays

Since most financial markets are closed during a public holiday, the liquidity is less. It is advisable to avoid Forex trading during public holidays due to the following reasons.

– Higher spreads

The spread is the difference in the prices at which a Forex trader can buy or sell a related asset. Forex brokers will usually increase the spread for traders on public holidays

– Liquidity

On public holidays, the large companies, banks are closed for trading so the liquidity is greatly reduced. These organizations decide the liquidity of the market with their high trading volume.

– Volatility

Due to the absence of large traders, the liquidity of the Forex market is reduced, and this also lowers the volatility. As a result, it also difficult for a trader to make much money trading.

Hence, on public holidays, most Forex traders do not trade since the higher spreads, lower liquidity and volatility reduces the possibility of making a reasonable profit. Yet there may be some traders who have developed a trading style which allows them to make money even when there is less liquidity and most traders are taking a break.

Conclusion

During public holidays, the major players like banks are not involved in trading, altering the market conditions significantly. The Forex market is not stable during the Christmas holiday week with some brokers on a holiday for the entire period. Usually the Forex market will open on 27th December after Christmas in most western countries. Since most traders consider trading on public holidays risky, they avoid Forex trading on these holidays.