Those who are into forex market will certainly be aware of the fact that it is always in a state of flux and change. It is extremely dynamic and what was relevant a couple of years ago may have become obsolete to say the least. However, compared to the history of forex, most of these changes have happened over the past three or four decades. This is because of various reasons.
The first reason is the size of the forex market which has become quite huge when compared to what it was during the early 70s. secondly, the advent of new technologies including the internet and mobile telephony also have given a new definition and direction to the way in which forex is perceived and conducted. Though the changes are quite a few in numbers, we will have a look at ten changes which have captured the imagination of customers.
- Fixed System To Flexible System
One of the biggest harbingers of change to forex marketing is perhaps because of the Bretton Woods Agreement. This enabled the international currency and monetary system to move from fixed exchange rates to a much more flexible system.
- Countries Free To Make Their Own Choices
Countries today can float their own exchange rates or could even adopt other exchange rates rules and practices which were not possible even a few decades back. This has again made the whole system much more flexible than what it was previously.
- Doing Away With Government Controls
There has been a major deregulation in the financial sector not only in our country but across the globe. It you look up reputed sites like CMC markets you will come across many instances where government controls and restrictions have been eliminated.
- Greater Freedom In Operation
Before these changes forex was restricted to watertight compartments and was available only to the elite few. Today, it is possible even for ordinary middle class people to get in forex trading and aspire to make money out of it quite easily.
- Diversification Of Investments And Savings
There also has been a fundamental change in investment and savings pattern. The entry of various investment institutions and fund managers has resulted in diversification of investments and it has moved beyond localized players to international borders. Multiple currencies also have come into play now.
- Tokyo And Uruguay Rounds Of GATT
The Tokyo and Uruguay Rounds of General Agreement on Tariffs and Trade (GATT) has given a new direction and momentum to forex trade. It has made it more open, transparent and has level playing field to forex traders from across the world. The NAFTA and U.S bilateral trade talks and initiatives also have started bearing fruit.
- Technological Advances
As mentioned above because of technological advances it is now possible to go in for transmission of large amount of market information on a real time basis. This has made it possible to identify and exploit profit making opportunities a relatively easy affair.
- Speed And Security
Today it is possible to execute big volume forex transactions safety and speedily. Hence the level of efficiency has also enabled costs of transactions to be kept at much lower levels than what it was possible a few years and decades back. The chances of fraud and duping of customers have also come down drastically because of various technologically enabled checks at various levels and at various events.
- New Out Of The Box Thinking
Another reason why there is a sea change in forex trading is because of the evolution of new thought processes and new practices and theories. This has resulted in the emergence of new financial derivatives and other such instruments.
- Better Understanding On An International Level
Finally it also would be pertinent to mention here that a combination of new technological, new forex derivative products, increased access to information, instant trading and ability to get started with low investments also have started playing a big and important role as far as forex trading is concerned.
At the end of the day there is no doubt that forex as our parents had understood has been replaced with a robust, easy to understand and perhaps even less risky mode of investment. The changes have just started bearing fruit and we are sure that more such changes will come over the years.