The foundations of the international currency trading

The international currency market is the largest market in the world, dwarfed in front of all other financial markets.And you will realize the magnitude of this market when you know that the volume of trading in the New York Stock Exchange's largest stock exchange in the world up to 25 billion dollars a day while on the stock exchange are traded 2000 billion dollars a day!! .This is more than enough to realize the enormity of this market.Historical backgroundYou may wonder why the lack of reputation for trading in currencies when compared to trading stocks and commodities, which began in its present form almost since more than a century.The reason is the novelty of the Covenant.After World War II and in 1947 was signed between the victorious Powers, the Convention on the "Bretton Woods" to the arrangement of the global economy and the terms of this Agreement the process of currency appreciation against the U.S. dollar substitute for gold as a way to help rebuild what was destroyed by the war in Europe weakened, and was of the most important results of this decision is the stability of exchange rates and the lowest limit of fluctuation against the dollar and against each other.There was no room for trading currencies, which are mainly based on the exploitation of currency fluctuations against the dollar.But in 1970, and as a result of difficult economic conditions experienced by the United States decided to U.S. President Richard Nixon's decision to the famous break the link between the U.S. dollar and the currencies of Europe and Japan which led to the impact on currencies of Europe and Japan this decision severely affected, making a quick swing up and down under the influence of policy and economy of each country of these countries and under the influence of strength or weakness of the U.S. dollar and the U.S. economy, and this history of this market grew at the same time in the United States, Europe, Japan and other countries.However, due to the novelty of this market on the one hand and the weakness of the means of communication on the other hand it was impossible for non-banks and major financial institutions trading in this market is huge.But with the continued development and rapid means of communication and the rapid spread of computer use, and with the Internet revolution, individuals can become huge and since no more than a simple trading currencies and take advantage of opportunities that do not expire for outrageous profits and very quickly.As you can see the currency market is the most modern markets the rest of the financial markets, making it mysterious and unknown to most people who are accustomed to trading stocks and commodities for decades far as well as people who do not already deal with any of the financial markets.Why do people buy currencies of other countries?When a merchant of Egypt, for example purchase of goods from Japan must pay him the value of these goods in a currency acceptable to the seller the Japanese, often the seller will not accept the Japanese to get the price of his goods in Egyptian pound, but he wants to receive the eighth his commodities either in the currency of the town (yen) or currency acceptable in most countries of the world such as the U.S. dollar or euro or pound sterling.Here is not to the Egyptian merchant only to replace what he has of pounds for the purchase of U.S. dollars to Japanese sent to the seller for goods bought by him.If, on the Egyptian merchant to buy the dollar and pay an interview pounds.Similarly, if a person wants to travel to an Arab one European countries for tourism, for example they must buy local Bammelth common European currency (Euro) to be able to pay the buying of goods and services in the European countries he will visit.Similarly, if there is someone who would like to invest in Britain to buy real estate or stocks, for example to pay an astronomical value of these investments must be paid in pound sterling or the value of the currency of English accepted by the seller, such as dollars, if that replaces the actual local currency and buy the pound sterling.Those are the main reasons that drive someone to buy the currency of another country ..Trade, investment and travel.This applies to the States as it applies to individuals, States, including exchange of goods and services and selling Hraoua astronomical nation can be paid the value of imports must be paid in the currency value of the currency of that State or accepted by that State, so States have always buy because the currencies of other nations.As well as for investments of States and financial institutions that invest in the state to pay the value of these investments in currencies of countries which invest in currencies or accept such as the dollar and the euro and the pound.Did you know now why the currency market is the largest in the world?This is because there are millions of trade, investment and travel cases occur every day and everywhere all over the world, there is, if a continuing need for the purchase and sale of currencies every day, all over the world, here it is traded every day for less than $ 2 trillion .. !!This staggeringly large figure represents the value of currencies are bought and sold every day in various parts of the world.As mentioned, the main reason why people and nations are buying and selling currencies is the operations of trade, investment and travel taking place between individuals and nations.The purpose of access to other country's currency in all these cases is to use this currency in the exchange of goods and services between individuals and nations.People buy other currencies and not love them ..!!But because it enables them to obtain the commodity from another country, any people that buy and sell currencies as a tool for the exchange.But how do we buy currency?So that we pay the equivalent of another currency ..You should you ever go to a money exchangers and you replace what you have local currency in exchange for another currency, for example U.S. dollars.You are so you sell your currency and buy the U.S. dollar.Of course, in order to buy something, he should know the price .. As well as when you want to buy a currency must know the price in another currency.