Familiarization to the Actuality of the CurrencyMarket

I’ve stated that mechanical forex trading system may be workable, but for only a short time relative to the life of markets. You must learn to trade what you see and to understand what you see on a chart.

When I first began trading there was no such things as futures contracts for foreign currencies. Why didn’t they exist? Because there was no need for them! In the 1970’s all that changed when the US dollar went off the gold standard and began to float against other currencies. Following that, the Chicago Mercantile Exchange began to create currency futures to provide a place where currency traders could hedge the risks associated with dealing in foreign currencies. Some of these risks are direct and some are indirect. Direct risk is involved for those who deal directly in foreign exchange. Indirect risk involves companies who export or import and receive payments or make payments in the currency of another country.

That this has happened can be seen in areas of which most futures traders are ignorant. Five years ago foreign currency traders forex trading system were being paid huge salaries and anyone with a track record could virtually name his price. Following that, currency traders were no longer in great demand. Now, again, there is a huge demand for successful currency traders.

Currency futures are but a small representation of the $1.5 trillion dollar foreign exchange market. Professional currency traders use forex, forwarding contracts, derivatives of all kinds, and the futures pits, to deploy their various trading and hedging strategies. Looking at only the futures is like the blind man trying to tell what an elephant is like by feeling only the tusks.