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BRITISH POUND / US DOLLAR (GBP/USD)

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7 Fun Facts You Probably Didnít Know About Forex

04/08/2015 | 08:35am EST

What is Forex to you? A job? A hobby? A quick adrenaline fix? Maybe you didnít think so, but it can also be fun - when youíre not losing at least - so hereís the deal: while reading this article, donít trade so you cannot lose and Forex will be fun. Here are 7 funny or interesting facts you probably didnít knew about Forex:

Fact #1: During November 2008 inflation in Zimbabwe reached an estimated 79.6 billion percent. Soon after this hyperinflation, in 2009 Zimbabwe abandoned its currency and in 2014 it was still using other countries’ currencies. At the height of this inflation period the government restricted bank withdrawals to $Z500,000, which was around US$0.25 (source: Wikipedia). Imagine trading Forex and being long the Zimbabwean Dollar…

 
Fact #2: The GBP/USD pair is nicknamed the “cable”. This nickname comes from fact that during the 1800’s the rate between the Pound and the US Dollar was synchronized using a large communications cable under the Atlantic which connected the London and New York exchanges. If today you are complaining about your broker’s execution speed, think about how “fun” it was to trade Forex in the 1800’s.
 
Fact #3: In the mid 1990’s Forex trading was only available to banks and institutions that were able to put together $40 million to $60 million at least… and today we whine that $1K for first deposit is too much. Ok maybe we don’t whine that much, but imagine having to come up with that kind of money. In fact I don’t think I would even trade if I’d have that amount of money.
 
Fact #4: This is what 1 trillion USD looks like:


 
Now think about this: the daily turnover  for the entire FX market is 5.3 Trillion USD…
 
Fact #5: When you think about NYSE, I bet you always assume that’s where all the big-time action happens. Well actually the NYSE  daily volume is “just” about 22 billion USD. Sure, it’s more money than I’ll ever see probably but compared to Forex it’s something like this:

 
Fact #6: The term Bull refers to a trader who expects price to rise while a Bear is a trader who believes price will fall. These nicknames supposedly come from the way each of these animals strike: a bull charges with its horns, using an upwards motion and a bear slashes with its claws, moving downwards. There is another type of trader, although this one is less known: the Pig. I’ll be honest, I don’t really know where the nickname of the Pig comes from but it describes a trader who is not very sure about what he’s gonna do next and the consensus among traders is that “Bulls make money, Bears make money and Pigs get slaughtered.”
 
Fact #7: Have you ever heard the term “pipette”? Since brokers started to use 5 digit quotes more and more, the pipette is often confused with the “pip”. Instead the pip is the 4th decimal in a quote while the pipette is the 5th.
 
There you go friends, that’s about all I’ve got. Know more? I’d love to hear it!
 
About the Author – Rory McClellan
If reading all the above didn’t bore you too much, here’s a bit about me: my name is Rory McClellan and yea, I’m Irish. I studied Psychology but my diploma is sitting quietly in a drawer so rest assured, I will not try to shrink your head. I like to think of myself as a trader who writes, not a writer who trades… simply because I’ve been trading for longer than I’ve been writing. When I trade, I trade Forex and when I write, I write for forexiswhyimbroke.com. There we try to show people that Forex deserves a second chance even if it got them broke or close to. More importantly, we try to show Forex Traders how to avoid going broke in the first place, so pay us a visit.
 
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