Archive for: February 9, 2007

Money has been around in one form or another since ancient times , during which money changers exchanged coins from one culture to another. However , during the middle ages , the demand for another form of currency other than coins emerged as the method of choice. The Babylonians are credited with the first use of paper bills and receipts. These paper bills represented transferable third-party payments of funds , making foreign currency exchange trading ( also known as Forex or FX ) much easier for merchants and traders.

From the infantile stages of foreign currency exchange during the Middle Ages to World War 1 , the Forex Markets were relatively stable and without much speculative activity. After the war , the Forex Markets became very volatile and speculative activity increased tremendously.

From 1931 until 1973 , the Forex Market went through a series of changes - many of which have paved the way for the road ahead. The Forex Market , as we know it today , originated in 1973. Today , everyone is talking …

In my previous post , I quoted this :

” The first rule of trading is to survive ; the second rule is that all rules can be broken if that supports the first rule. ”

The Stock Market is a complex environment. Market condition changes every second , sometimes you know the reason , sometimes you don’t. Trading systems and trading rules are meant to guide us during our execution of trades.

Trading Rules are not carved on solid rock. At times we need to review and edit some of the rules that do not work anymore.

I would like to quote a driving example here …

Imagine if you are driving along the road and an oncoming truck is heading towards you in your lane , do you stay in that lane or swerve across to the empty lane ( assuming no vehicles there ) where you are not supposed to be ? The rules are clear , you are not supposed to be over there in the wrong lane. The system says not to do it , but reality …