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FX history

History of Forex

To get the whole picture of what the Foreign Exchange (FX, forex) market is and how it functions it’s worth reviewing some the most important historical events that have affected the currency markets in the past.

First, to understand how currency exchange rates came into being we need to go back to its roots in the gold standard.

Gold standard

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The first shape of an exchange rate system was the gold standard which emerged in 18th century England.

​What the gold standard means is that the government guarantees to exchange a certain amount of gold (usually 1 ounce) for a certain fixed amount of currency. Basically, that’s what is meant when we say the currency is backed by gold. 
​
Because in order for the government to be able to maintain the exchange rate of the currency to gold it must have large reserves of gold and it certainly can’t print as much money as it wants without control. 

However, while this does create price stability sometimes more currency is needed, like during economic depressions and wars. And this proved to be the case in the past. Historically, during such times the gold standard was frequently abandoned and then returned when things got back to normal. Up until the end of the second World War, this is how things usually worked. This resulted in periods of hyperinflation, most famous of which was Germany in the 1920s. ​

Bretton Woods System 

In 1944, at the end of WW2,  the international world powers decided that they needed a new monetary standard and the Bretton Woods System was created. For this purpose, representatives from the Allied Forces and the Western world met in Bretton Woods, New Hampshire, USA. 
US dollar
They agreed to create a new monetary system, where the value of gold will be fixed only against the US Dollar at $35 per ounce, while the other currencies of the other participating nations will be only fixed against the value of the US dollar. From this event onwards, the US Dollar became and is still to this day the most dominant reserve currency in the world.

In addition to the foundation of the new monetary system, 3 international institutions were founded in Bretton Woods to watch and control global economic activity:
  • The International Monetary Fund (IMF)
  • the General Agreement on Tariffs and Trade (GATT)
  • The World Bank

End of the Bretton Woods System

However, even the US government couldn't maintain the fixed exchange rate of gold to the US Dollar and by 1971 didn’t have enough gold reserves to cover for the currency in circulation. Because of this, on 15 August 1971, then US President Richard Nixon had to abandon the gold currency. This practically made the US Dollar a fiat currency like the rest of the world currencies and marked the definite end of the Bretton Woods system and the gold standard.

​Although the 3 international institutions formed in Bretton Woods are still functional today, the monetary concept of currencies being backed by gold is completely dead. Now, currencies are just paper with a value not backed by gold or any other physical asset, but only by the word of the government. That is to say, a currency has value simply because the government says so.

This is probably also the reason why the whole speculation and online forex trading grown last years that much (of course, together with technology / computer innovations). Today's market moves, volatility and fluctuating prices create unique opportunities for forex traders.

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Content of FX Trading Revolution

Forex Education - Basics:

  • What is FOREX?
  • What Is Forex Trading?
  • History of Forex
  • Forex Market Growth Factors
  • ​Forex Trading Basics that You Must Know
  • Forex Trading Hours
  • Currency Pairs
  • Exchange Rate Systems and Currency Valuations
  • Participants of Forex Market
  • Introduction to Different Investment Options for Trade the Financial Markets
  • Introduction to Trading Instruments: FOREX, Shares, Commodities, Indices, Bonds, ETFs and Others
  • Insider Information about Interbank Trading​
  • What is a Forex spread?
  • ​What is a Forex Pip?
  • Forex Leverage
  • How to Make Smart Use of Leverage in Forex Trading
  • Forex Margin and Margin Call
  • Forex Rollover and Swap
  • Different Types of Forex Orders Explained
  • How the Prices on Forex are Created and Why They Move?
  • The Best and Most Successful Forex Traders
  • ​The Habits of Successful Forex Traders
  • How to Build Your Own Forex Trading System
  • 3 Winning Steps for a Successful Trading Journey
  • Forex Trading Plan
  • Researching the Forex Market
  • Using Stop Loss & Take Profit in the Forex Market
  • Forex Demo Account vs. Real Account
  • Forex Trading Platform
  • Why is Backtesting Important for any Forex Trader?
  • How much should I start with to trade Forex?

Forex Education - FX Brokers:

  • Types of Forex Brokers and True Comparison
  • ​What Forex Brokers Never Want You to Know!
  • Truth about Forex Brokers
  • Regulation in Forex Trading
  • Dirty Practices of Forex Brokers that Cost You Profits
  • How to Choose the Best Forex Broker
  • How Do Forex Market Makers Work?
  • The Hard Reality How the Vast Majority of ECN and STP Brokers Work
  • Hidden, Yet Regular Forex Trading Costs
  • Regulation on Forex, what does it mean for brokers, IBs and strategy providers?

Forex Education - Technical Analysis:

  • Technical Analysis Introduction
  • Forex Trend Definition
  • Moving Average Basics
  • Forex Trading with ​Commodity Channel Index (CCI)
  • Forex Trading with ​Relative Strength Index (RSI)
  • Forex Trading with ​MACD
  • Parabolic SAR: The Stop and Reversal Forex System
  • How Average True Range (ATR) Indicator Can Make You a Better Trader
  • Utilizing Momentum Indicator the Right Way
  • Stochastic Oscillator: Simplifying the Useful Indicator for Forex Trading
  • Getting Your Way Around the Ichimoku Kinko Hyo Indicator
  • Unveil the Amazing Story Behind Bollinger Bands
  • Trading Divergences of Forex Indicators
  • Explore the Average Directional Index (ADX) Indicator
  • The Awesome Oscillator and its Role to the Forex Trading
  • What Can Accumulation Distribution Indicator Do in Trading?
  • Why Traders need to Understand the Twist and Turns of Standard Deviation
  • Be a Forex Expert and Apply the On Balance Volume Indicator on Your Next Trade!
  • Trading Overbought and Oversold Levels with the Williams %R indicator
  • The Breakdown of MFI: Money Flow Index
  • Heiken Ashi Charts
  • How many indicators should I use on my charts? Why less is more!
    ​
  • Price Action Trading – Most Adaptable Method​
  • Support and Resistance Trading
  • How Fibonacci Retracement is Used in Forex Trading
  • Forex Trading with Pin Bar Pattern
  • Outside Bar: An Effective Forex Trading Pattern
  • The Most Used Candlestick Patterns
  • Price Action Trading: Tips to Profit from the Forex Market
  • How To Place Stop Loss Orders Correctly
  • How To Place Profit Targets Like A Professional
  • ​Range Trading Versus Trend Following
  • ​The Psychology Behind Round Numbers and Support Resistance Levels in FX Trading​
  • Forex Breakout Trading Strategies
  • Forex Chart Patterns
  • Dow Theory and Forex Trading
  • Price Action Reading in the Forex Market
  • Pivot Points in FOREX Trading
  • Pivot Points in Forex trading - The 70-80% rule (part 1)
  • Pivot Points in Forex trading – Market sentiment and support/resistance (Part 2)
  • Volatility in the Forex Market
  • Trend trading the Forex market
  • Trend Trading vs Range Trading - Which one to choose, how to combine them?

  • Introduction to Harmonic Trading and the ABCD Pattern
  • The Gartley and Butterfly Harmonic Patterns
  • The Bat and the Crab Harmonic Patterns
  • Elliott Wave Principle Introduction
  • Counting Elliott Waves and Types of Waves
  • Practical Application of the Elliott Wave Principle

  • Analyzing and Trading Cross Currency Pairs - Introduction
  • Analyzing and Trading Cross Currency Pairs – Part 2
  • Analyzing and Trading Cross Currency Pairs – Part 3
  • Analyzing and Trading Cross Currency Pairs – Part 4
  • Analyzing and Trading Cross Currency Pairs – Part 5

Free Forex eBooks:

  • Insider Forex Strategies by FX Trading Revolution

Forex Interbank Trading:

  • Forex Interbank Market Section
  • Forex Interbank Market Explained
  • ​How to Select a Prime Brokerage and Their Role
  • Liquidity Provider Definition
  • High Frequency Trading (HFT) Explained
  • ​What is Algorithmic Trading?
  • Integral FX Inside Trading Platform
  • Currenex: The Best Foreign Exchange Aggregator for Traders
  • Liquid X Trading Platform
  • HotSpot FX ECN
  • FIX Protocol - Financial Information Exchange
  • What is Forex VPS?
  • Forex Scalping Explained
  • The Rise of Foreign Exchange Aggregators in the Trading Industry

Forex Education - Money Management:

  • The Complete Forex Money Management Guide
  • Professional Forex Risk Management
  • 8 Tips How To Manage Risks in FX Trading like a Pro
  • Money Management in FOREX: Adding to Winners and Trimming Down Losers in Trend Trading

Forex Education - Psychology:

  • The Complete Guide to Forex Trading Psychology
  • Forex Trading Psychology Basics
  • Forex Psychology: Developing a Successful Forex Mindset
  • The Forex Psychology and Traders’ Comfort Zone
  • Psychology Behind Following a Forex Trading System
  • Importance of Being a Disciplined Trader in the Forex Trading
  • Avoiding Forex Trading Systems Pitfalls
  • Forex Trading Psychology: The Borderline Between a Trading Plan and Emotional Outbursts
  • Developing the Psychology of a Successful Trader
  • Most Traders Fail! Find out the 4 Stages of Mastering Forex Trading!
  • Forex Trading Personality Types
  • The Accurate Forex Trader
  • The Administrative Forex Trader
  • The Adventurous Forex Trader
  • The Artistic Forex Trader
  • The Detailed Forex Trader
  • The Facilitative Forex Trader
  • The Fun-Loving Forex Trader
  • The Independent Forex Trader
  • The Innovative Forex Trader
  • The Planning Forex Trader
  • The Socially Responsible Forex Trader
  • The Spontaneous Forex Trader
  • The Strategic Forex Trader
  • The Supportive Forex Trader
  • The Values-Driven Forex Trader

Forex Education - Others:

  • ​Forex Blog - all educational articles
  • Forex Fundamental Analysis Basics
  • Fundamental Analysis and Trading the Forex Market Using Fundamentals
  • Nominal vs. Real Exchange Rates
  • Euro & Currency Integration
  • Interventions of Central Banks in the Forex Market
  • Seasonal Patterns and Forex Trading
  • Correlation Forex Trading
  • Correlation Between Commodities and Forex
  • How to use the correlation indicator for MetaTrader 4
  • The Most Profitable Forex Trading Strategies
  • The Four Steps to Begin Forex Trading Profitably
  • MetaTrader 4 Introduction
  • How to Install EA, Indicator or Script to the MT4 (Windows & MAC)
  • MetaTrader 5 Introduction
  • cTrader: Advanced Platform for ECN / STP FX Trading​
  • Benefits of Forex Segregated Trading Accounts
  • How to Trade Forex Like the Big Institutions
  • Carry Trading in Forex
  • Forex News Trading
  • Trading Fundamentals – Differentiating between important and noise events. How misleading stories create abnormal price moves?
  • Forex Sentiment Analysis
  • FOREX Inter-Market Analysis
  • What is Slippage in FOREX and How to Avoid Trading Losses
  • How Forex Traders Can Benefit from Price Shading
  • FOREX Depth of Market, an Useful Tool for Forex Traders
  • Forex Hedging Explained
  • Forex Trading and Taxes
  • Forex White Label Explained

Forex Investing:

  • PAMM: Exclusive Opportunity for Investors and Successful Traders
  • PAMM Managed Accounts Invasion of Forex Trading

Forex Indicators:

  • High Frequency Trading Signals Indicator
  • Support Resistance Indicator
  • Correlation indicator
  • Overbought Oversold Indicator
  • Forex Spread Indicator
  • CCI indicator
  • RSI indicator
  • Market Profile Indicator​
  • Forex Sentiment Indicator
  • The Best MACD Indicator
  • Pivot Point Extra Indicator
  • How updates of our indicators work?

Forex Tools:

  • Daily Forex Analysis
  • Live Forex Charts
  • Breaking Forex News
  • Live Euro to Dollar Exchange Rate and Chart
  • Live Pound to Dollar Exchange Rate and Chart
  • Live Dollar to Yen Exchange Rate and Chart
  • Live Aud to Usd Exchange Rate and Chart
  • Live Usd to Chf Exchange Rate and Chart
  • Real time Forex Rates and Currency Heat Map
  • FOREX Economic Calendar
  • Currency Converter
  • Forex Pip Calculator

Forex Trading Strategies:

  • 4 Hour Chart Trend Following Strategy
  • Trading the Gap Forex Trading Strategy
  • Inside Bar Forex Trading Strategy
  • Forex Breakout Confirmation Strategy
  • Trendline Reversal Forex Trading Strategy​
  • MACD Trend Forex Trading Strategy
  • Double Bollinger Band, MACD, Stochastic Crossover Forex Strategy
  • Trend Trading with the ADX and the Parabolic SAR
  • Trading the Flag and the Wedge Chart Patterns
  • Pullback Forex Trading Strategy
  • The Triangle Pattern Trading System
  • Head and Shoulder, Double Top and Double Bottom Chart Patterns Strategy
  • Rounding and Triple Tops and Bottoms
  • London Session Forex Breakout Strategy
  • Range trading the Forex market
  • Larry Williams OOPS Trading Strategy
  • Master Candle Trading Strategy
  • High Probability Tall Candle Reversal Forex Strategy
  • Increase Profits by Analyzing Multiple Timeframes to Confirm Trading Signals
  • Range Trading with the ADX and Bollinger Bands

Forex Brokers Reviews:

  • Forex Brokers Introduced
  • Real Forex Brokers Reviews
  • Purple Trading Review
  • Pepperstone Review
  • Orbex Review
  • FPMarkets Review
  • LCG Review
  • FXPro Review
  • HYCM Review
  • XM Review
  • AvaTrade Review
  • ​Axiory Review
  • LMAX Review
  • ​FXopen Review
  • Think Markets Review
  • CMC Markets Review
  • Swissquote Review
  • IC Markets Review
  • OctaFX Review
  • Dukascopy Review
  • Trader.Online Review

Cryptocurrencies:

  • What is cryptocurrency?
  • Trading cryptocurrency
  • Cryptocurrency mining
  • What is blockchain?
  • Bitcoin introduction
  • Ethereum introduction
  • Litecoin introduction
  • Ripple introduction
  • Zcash introduction

Other trading tools:

  • Live charts of Stocks, Futures, Commodities and Stock Indices
  • Real Time Gold Price and Chart
  • Real Time Brent Crude Oil Price and Chart
  • Real Time Dow Jones Index Rate and Chart
  • Real Time S&P 500 Index Rate and Chart
  • Real Time DAX 30 Index Rate and Chart
  • Real Time FTSE 100 Index Rate and Chart
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