Foreign exchange market has a long-standing history. The evolution of interstate relations left its mark on the development of currency exchange transactions. 1971 is the starting point year for Forex. In August 1971 the U.S. president R. Nixon abolished the gold standard monetary system. The dollar’s value was not fixed against gold anymore, which immediately led to fluctuations of exchange rates. However, the exchange market as we know it today appeared only five years from that moment in 1976 when the Jamaica Conference took place. At the meeting of the ministers of 20 IMF member countries a new agreement about the international currency system was adopted. From that date free floating of currency rates was the only way to exchange money. The countries which accepted this system were no longer using the gold standard as the basis of their monetary system. Starting from that point the currency was freely convertible.
In 1979, pursuing integration targets, the EU members took measures to maintain stability of the national currency and tried to protect European market against the dollar intrusion. As a result, the European Monetary System (the EMS) appeared. It was based on the European Currency Unit or the ECU. With the course of time the ECU was used not only in interstate but also in private payments.
In 1990 the UK joined the exchange rate system, but two years after the falling of pound sterling, the UK government decided to exit the EMS.
In 1999 the ECU was replaced by the euro. The agreement was adopted by 12 countries and in 2002 the euro was introduced.
Owing to the development of information technology and fluctuations in exchange rates, it became possible to make money out of difference in currency rates. After the Internet appeared, Forex started functioning 24 hours a day five days a week which gave a way to private operators.
Today, Forex is the world’s largest exchange market. Currency trading volume around the world has hit $4 trillion a day. There are some distinctive features of the foreign exchange market:
- Market is open 24 hours a day, five days a week;
- Absolutely everyone can start trading with a Forex broker;
- High volume trading.
However, if you decide to trade on Forex, you should understand that this work demands a certain kind of knowledge, just like any other job.
Coppock indicator is a technical analysis indicator created by Edwin Sedgwick Coppock in 1962, first published in Barron\'s magazine. The founder of the indicator was asked by the Episcopal Church to develop a reliable instrument for long-term investors, which could be applied for S&P 500 Index.