Since the early 1970s the Forex market has been profoundly transformed in size, structure, and operation. This transformation is also a result of structural changes in the world economy and in the global and international financial systems. Among the major changes and developments in the international and global financial market are the following: The change in the international monetary system from the fixed exchange rate system of Bretton Woods to the flexible/floating exchange rate system of today. With this new system in place, nations can choose to float their exchange rates or to follow other exchange rate pricing policies. Financial deregulation throughout the world and the elimination of governmental control and restrictions in nearly all countries. This results in more freedom for national and international financial transactions
A shift toward the institutionalization and internationalization of savings and investment. Now, funds managers and institutions around the globe have more capital to invest in the Forex market.
A shift to international trade liberalization put forth in multilateral trade agreements, such as NAFTA (the North American Free Trade Agreement).
Major advances in technology. This makes possible the instantaneous real-time transmission of market information worldwide, quicker (almost instant) transactions, and advanced communication availabilities among international institutions.
The development of innovative, new financial instruments and new theoretical approaches to finance and economics.
All these changes led to a shift in the development of international markets. As a result of this transformation of the Forex, markets have seen enhanced freedom, increased cooperation among nations (which increases activity and, in some cases, profitability and currency value), improvements in trading and informational efficiency, and the creation and implementation of better market techniques and instruments.
The Forex market is open 24 hours a day, so that you can be right there trading whenever you hear a financial scoop.
Unlike the stock market, a smaller market with tens of thousands of stocks to choose from, the Forex market revolves around more or less eight major currencies.
The enormous volume of daily trades makes it the most liquid market in the world, which means that under normal market conditions you can buy and sell currency as you please.