Foreign exchange, alternatively abbreviated as Forex or FX, is a very broad subject and hard to represent in just a few hundred words. To futher complicate matters, Forex is a part of finance, and seems to be imbued with the same soporific character. You’d think that the chance to make lots of money with little effort would get people excited. I, on the other hand, think that Big Finance intentionally pretends it’s boring so they can have it all to themselves.
Forex is the biggest financial pie out there, and despite being the easiest to get a piece from, it has only recently become available for retail traders. Consequently, it’s not as well known to the public as other equities markets.
While we can speculate that ancient cultures had some form of foregin exchange when they traded along caravan routes, the modern concept of FX remained largely curtailed by the Bretton Woods system up until 1971. The system was the result of an agreement in which countries would fix their exchange rate to the dollar, and thereby to each other. With no practical variation between exchange rates, there was little room for speculation and market trading in Forex. That didn’t stop the black market, however.
Most equities trading remained rather isolated among specialists well into the 1990s. However, the easy access to information, automated processes and interconnectivity of the internet made accessing the market much easier. Finally in the early years of the new millennium, retail brokers became available to the general public through the internet.
While retail participation in the market remains relatively low (estimated at around US$160 billion out of over US$4trillion), it has been growing exponentially since its inception. Retail traders come from all walks of life and are particularly attracted to foreign exchange because of its liquidity and userfriendliness. The rapid growth of the online retail segment has created a concurrent exponential growth in the demand for quality Forex information.
Thus, the Forex writer is born. Unlike technical writers preparing manuals for experienced and often jaded traders, the new incarnation of writer for the currency markets needs to be versatile, knowledgeable, but also able to talk to someone who doesn’t have an advanced financial degree. His job is not necessarily to create new technical literature, but adapt the explanation of current market models and data for a new consumer.
Finding quality information that’s not laced with financial jargon is difficult for new Forex traders. Some sites have been able to adapt, such as Babypips, or Investopedia. Others haven’t, and I can’t cite them as examples because they no longer exist. Not only is intelligible information necessary, but the credibility and trustworthiness of the writer is paramount. Smart people are very slow to trust when their money is involved.
The good news is that as long as this disparity exists, there will always be a job for you and me. You, who need a writer, and me as the writer. We just have to be able to show we have something to say, and it’s worth reading.