The history and current state of forex trading knowledge

The current status quo is actually not very good, because I have been involved in trading for a long time, and there is a lot of information about the exchange that can be queried on WikiFX, and users also have feedback on the current situation of the exchange.

The earliest trading of forex appeared in ancient times. The details of the history of foreign exchange development can actually be understood through WikiFX.

The Forex (foreign exchange) market, the interbank market, was established in 1971, when the international** shifted from a fixed exchange rate to a floating exchange rate. From then on, the exchange rate of one currency relative to another is usually expressed in an explicit way – an exchange relationship that both parties agree on.

The market has more trading volume than all others. For example, the global price** market is traded at about $300 billion per day, while the daily foreign exchange volume is $1-3 trillion. However, Forex is not a "market" in the traditional sense, and it does not have a specific trading venue like ** and **.

Forex trading is carried out simultaneously through ** and computer terminals in hundreds of banks around the world.

The foreign exchange market (FX or Forex) originated in 1973. However, since the time of the Egyptian pharaohs, the types of money have been constantly changing from one type to another. While the ancient Babylonians went down in history as the first people in history to use paper as a bill, it was the currency dealers of the Middle East who were the first in the world to trade money, exchanging the coins of one country for the coins of another.

In the Middle Ages, the need for other forms of money than coins began to emerge, as the way of choosing them was constantly renewed. These paper-based documents were used as convertible third-party fund payment slips, allowing merchants and foreign traders of the time to easily exchange foreign currencies and prosper the local economy.

The foreign exchange market refers to a trading place engaged in foreign exchange trading, or a place where various currencies are exchanged with each other. The forex market exists because:

1. ** and investment: Importers and exporters pay one currency when importing goods, and collect another currency when exporting goods. This means that they receive and pay in different currencies when they close their accounts.

As a result, they need to exchange some of the currency they receive for currency that can be used to purchase goods. Similarly, a company that buys foreign assets must pay in the currency of the country concerned, and therefore it needs to convert its national currency into the currency of the country concerned.

2. Speculation: The exchange rate between two currencies will change with the change in supply and demand between the two currencies. A trader buys a currency at one exchange rate and sells it at a more favorable rate, and he makes a profit.

Speculation accounts for the vast majority of transactions in the forex market.

3. Hedging: Due to the fluctuation of the exchange rate between the two related currencies, those companies with foreign assets (such as factories) may suffer some risks when they convert these assets into the national currency. When a foreign asset denominated in a foreign currency remains unchanged in value over a period of time, a gain or loss occurs when the value of the asset is translated into the domestic currency if the exchange rate changes.

Companies can eliminate this potential profit or loss through hedging. This is the execution of a foreign exchange transaction in which the result of the transaction is just offset by the profit or loss of a foreign currency asset arising from the change in exchange rate.