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In developed nations, state control of foreign exchange trading ended in 1973 when complete floating and relatively free market conditions of modern times began. [52] Other sources claim that the first time a currency pair was traded by U.S. retail customers was during 1982, with additional currency pairs becoming available by the next year.
Retail forex trading has been promoted by some as an easy way to make profits and has thus been the focus for a number of foreign exchange frauds. [9] In response, financial regulators in a number of countries have introduced restrictions or provided warnings about this type of trading as well as legal actions against perpetrators. [10]
Forex trading involves exchanging one currency for another. There may be practical reasons for this, such as traveling abroad, or traders may look to speculate and profit off of currency movements.
Major banks handle very large forex transactions, often in billions of units. [1] These transactions cause the primary movement of currency prices in the short term. Other factors contribute to currency exchange rates: these include forex transactions made by smaller banks, hedge funds, companies, forex brokers and traders. Companies are ...
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