THE BASES OF CURRENCY TRADING

Коваленко Ю.С.

The new floating currency system (established in 1971 by the Smithsonian Agreement) set the stage for today's currency market. Since the prices of currencies were no longer tied to a standard such as gold or the dollar, one country's currency could now be traded in relative terms against another country's currency.

In recent years, the widespread use of the internet and personal computers-which began in the 1990s-has taken currency trading to a whole new level. It is now possible for almost anyone to open an account and participate in the Forex Market.

Forex is a nickname for what is more formally known as the foreign exchange market. The foreign exchange market is the largest financial market in the world. It is estimated that somewhere between 2 and 3 trillion dollars worth of currency is exchanged every day. Forex markets do not have a physical site. Forex Market is considered an Over-the-Counter (OTC) market as it is run entirely through a continuous network of banks and brokers. There isn't a centralized location for exchange like many of the famous commodities markets. The Forex market is a pure market and free from any external control. It is considered a perfect market since the price of a currency is based solely on the supply and demand of a particular currency.