History
Forex trading may seem new and complex to most of the people but very little of forex trading is different from the trade done in earlier history of mankind. The methods and techniques have changed but basic phenomenon is the same i.e. “the simple exchange of assets or money”. The roots of Forex trading can be traced in ancient times when man employed all the skills and resources to use money and markets for his benefits. Our ancestors had their own strategies and methods. Their strategies have resulted in success and failures but all those strategies and methods can be used as historical record to understand the modern Forex trading.
“Silk Road”-a historical channel of Foreign exchange
“Silk Route” is one of the most known historical trade route. It served as channel of trade for centuries. By using this historical route, the traders from Asia, Middle East and Europe exchanged their goods. The exchange of goods is called barter system which is still in practice in many regions of the world. With the passage of time traders realized that barter system has many short comings: 1. it was cumbersome and time consuming; 2. it was inefficient, a bag of rice may not be exactly worth a goat or lamb. Currency was introduced as a solution. This was initial evolutionary phase of current Forex trade system.
Modern Forex Trade System
Current Foreign Exchange or Forex is the end product of the centuries of evolution and experience. It has lot to offer. Nearly $3 trillion is the daily volume of Forex market. Forex is the driving force for promoting the Global economy. During last two decades, Forex market has grown at immense speed. As the economic world getting together, the Forex is becoming the most critical market.
Sun never sets on Forex.
Forex generates the vast flow of money and business activities across the borders. It is a global market and it is not under the control of any single authority. It provides the investor an overwhelming opportunity without considering their geographic and ethnic backgrounds. Forex market remains open for 24 hours. Sun never sets on Forex. Trading starts at Sydney, Australia and move from time zone to time zone al around the planet until it finds the New York, the last market to open every day. Forex is an important force to bring the different people and cultures of the world closer to each other. It is enhancing the friendly relationships among nations.
Social Effect
A negative or positive change in forex market has effect on the people; both rich and poor. A change in the foreign exchange rate means rise of prices of luxuries of life and a sever change can make even the basic living difficult for one’s family. We are passing through the same type of crisis now days.