Articles on Forex Markets

Introduction to Forex Markets

This article provides a basic introduction to the Forex market. It lists down the various characteristics that are unique to the Forex market and provides a brief summary regarding how they affect the trades that take place.

History of the Forex Market: The Gold Standard

This article provides a basic explanation for the gold standard. It also contrasts the modern system of freely floating currencies with the gold standard.

Bretton Woods Agreement and Smithsonian Agreement

This article provides a historical account of money. It explains how money became freely floating currency and therefore how Forex markets came into existence.

Advantages and Disadvantages of Currency Pegs

This article explains the pros and cons of having a fixed exchange rate regime. It also cites earlier instances where countries have either benefited or have been at a loss because of their currency pegs.

Common Terminologies Used in Forex Markets

This article lists down some of the most commonly used terms in the Forex market. It also provides a very basic explanation for the same terms.

Forex Trading vs. Regular Trading

This article lists down the unique features of the Forex market. It compares Forex trading with trading other financial assets in the light of these features and discusses their risk-return profile.

Understanding the Trading Cycles in Forex Market

This article explains how trends affect the Forex market. It explains that trends fluctuate in a particular fashion known as trading cycles. It also provides advice regarding trading in these different cycles.

How Are Exchange Rates Determined ?

This article tracks down some of the important factors which influence the determination of exchange rates. It also explains that exchange rates are relative and not absolute.

Types of Quotations in Forex Market

This article explains the direct and the indirect method of giving Forex quotations. It also explains the nomenclature used for abbreviating currencies as well as conventions related to giving Forex quotations.

Types of Orders in the Forex Market

This article explains the different types of orders available in the Forex market. It also explains how these different types of orders allow investors to manage the value of their holdings in a 24 by 7 environment!

Advantages and Disadvantages of Forex Market

This article provides a brief look at the advantages and disadvantages of trading in Forex markets. The advantages are mostly related to flexibility whereas the disadvantages are mostly about excessive risk.

The Importance of Forex Education

This article provides information about how Forex trading courses are conducted. It provides a list of benefits that traders would be missing on if they do not enroll in such a course. It also suggests that online courses would be more preferable if budget or time is a constraint.

Major Currency Pairs in Forex Market

This article provides a brief introduction about the 4 major currency pairs in the world. It also provides information regarding how these currency pairs relate to other currencies.

Types of Market Participants in Forex Market

This article provides information about the different types of participants in the Forex market. It also explains their motives for trading currencies as well the quantum of information that they are expected to have.

Types of Intervention by Central Banks in Forex Markets

This article explains about the different types of interventions by Central Banks in the Forex markets. It also explains the merits and demerits of each method and why one method can be preferable to another in a given situation.

Dollar Yuan Peg

This article explains about the dollar yuan peg. It explains how this peg works and why it has been the reason for a major imbalance in the balance of trade between the United States and China.

Forex and Labor Arbitrage

This article provides information about labor arbitrage and how it is affected by the Forex markets. This issue has been widely debated in the media in the recent past.

Carry Trade and Rollovers

This article explains the concept of carry trade and rollovers in great detail. It also lists down the risks that accrue as a result of carry trade and how one can mitigate such risks.

Concept of Special Drawing Rights (SDR’s)

This article provides basic information regarding Special Drawing Rights (SDRs). It also lists down the advantages and disadvantages if a Special Drawing Rights (SDRs) based system were to replace a dollar based system.

Interest Rates and Forex Market

This article explains the relationship between interest rates and exchange rates. It explains how this relationship can be complex and provides an easier simplified version.

Exorbitant Privilege: US Dollar

This article explains why the dollar system provides the United States government with exorbitant privileges. The article also explains why these privileges continue despite there being a lot of resentment in the market.

Advantages and Disadvantages of Freely Floating Exchange Rates

This article lists down the pros and cons of freely floating currency system. It also compares the same with the pros and cons of the fixed rate system.

Argentina Financial Collapse

This article explains in brief about the currency crisis that was faced by Argentina between 1998 and 2002. It explains the causes as well as effects of this massive crisis which is often compared to the Great Depression.

Asian Financial Crisis of 1997

This article recaps the 1997 currency contagion that took place in Asian countries. It also lists down the causes that led to it as well as the effects that were felt as a result of the crisis.

Currency Wars: “Beggar Thy Neighbor” Policy

This article provides an introduction to the concept of currency wars. It lists down the currency wars that have happened in the past and also explains why the present situation could also be viewed as an ongoing currency war.

Freely Falling Currencies

This article provides a critique of the freely floating exchange rate system. It exposes the flaw that currencies are compared to each other and not to a fixed standard like gold and therefore the exchange rates provide an extremely distorted image of reality.

Black Wednesday of 1992: The Day the Pound Sterling Came Under Attack

This article describes the events that lead to Black Wednesday i.e. the speculative attack on the British Pound. It explains how joining the European Exchange Rate Mechanism (EERM) at an overvalued price caused this economic disaster.

Russian Ruble Crisis of 1998

This article describes the Russian default of 1998. It enumerates the events that led up to the default of the erstwhile superpower as well as the consequences of the ruble crisis.

The Mexican Currency Crisis (Tequila Crisis) of 1994

This article explains the Mexican crisis of 1994. It explains the causes that led up to this crisis as well as the consequences of that followed as a result of it.

The South Sea Bubble

This article describes the South Sea bubble. It explains how the South Sea Company had no underlying business and that it was a Ponzi scheme which was simply dependent on the share price continually rising.

Tulip Mania of the 17th Century

This article provides a historical account of the tulip mania. The tulip mania was the first asset bubble in recorded economic history and provides an interesting case to understand the herd mentality that prevails in the financial markets.

Spanish Property Bubble of 2008

This article discusses the Spanish property bubble that was created between 1990 and 2006. It explains the causes that led to rise in prices till 2006 and the fall in prices post 2008.

Poseidon Bubble in the Australian Stock Market

The Poseidon bubble was a bubble that rocked the Australian stock market in the 1970’s. This article describes the causes that led to the bubble as well as the outcome of the resultant crash.

Bernie Madoff Scandal

This article provides a detailed account of the Madoff scandal. It attempts to explain how Madoff could have possibly pulled off a $50 billion dollar Ponzi scheme in the middle of the most regulated markets in the world!

The Dot Com Bubble of 2001

This article provides details about the dot com bubble of 2001. It also explains the role that the Fed i.e. the United States central bank inadvertently played in creating and bursting the bubble.

The Harshad Mehta Scam in India (1992)

This article discussed the Harshad Mehta scandal in detail. It discusses how Harshad Mehta could pull off such a huge scandal and what the motivations of the other parties involved were.

The Ketan Parekh Scam

This article provides information about the Ketan Parkeh scam which broke out in 2001. It compares this scam to the Harshad Mehta scam of the previous decade and draws parallels and differences.

Savings and Loan Crisis in the United States (1980’s)

This article describes the beginning of the savings and loans crisis, its spread and its end. It also explains how regulators played an important role in expanding the extent of this crisis.

The Failure of Long Term Capital Management (LTCM)

This article describes the rise and fall of Long Term Capital Management (LTCM). It provides a background as to how solely relying on mathematical models for financial decision making caused this massive failure.

The Albanian Revolution and Pyramid Schemes

The Albanian crisis is unique in the sense that Ponzi schemes became a national affair causing a civil revolution in this country. This article describes the Albanian crisis and examines the causes which led to this situation.

Puerto Rico: The Greece within America

This article provides a brief summary of the Puerto Rican crisis which is often compared to Greece. It explains why Puerto Rico is in massive debt and also explains the severity of the current situation.

Israel Economic Crisis: 1983

This article describes the Israeli bank crisis of 1983. It also explains the reasons which led up to the crisis and the measures taken by the government to contain it.

The Nordic Crisis of 1992

This article lists down the factors that lead to the Nordic crisis. It also explains the measures taken by the governments and central banks in the region to avert a catastrophe of this magnitude.

The Historic Iceland Crisis of 2009

This article explains how the Icelandic population allowed its banking system to fail in the 2009 crisis. It also explains how the crisis was large enough to bring the nation to the brink of starvation and how the economy seems to have finally rebounded.

The Latvian Crisis: A Short History

This article explains the Latvian crisis. It explains the cause of the crisis and the various measures taken to overcome the crisis. It also explains how a relatively new fiscal policy called “internal devaluation” helped Latvia economy recover and even thrive after the crisis.

John Law and the Mississippi Bubble

This article traces the history of John Law and the Mississippi Company. It also explains how the bubble was large enough to bankrupt an entire nation and bring it to a brink of revolution.

Brexit after Effects: British Economy Beats Slowdown Fears

This article explains why the British economy has defied Brexit predictions. It also explains why Brexit has not been a catastrophe but instead a trigger for economic growth.

The End of the Dollar Hegemony

This article explains the concept of dollar hegemony. It explains how this hegemony benefits the United States. It also explains how this hegemony could be overthrown and the resultant effects on the economy.

Why Devaluing the Currency is a Bad Idea ?

This article debunks the popular myth that devaluation of a currency is good for the nation. It explains how devaluation robs everyone else and benefits only a handful of elites.

What is Causing the Bitcoin Boom?

This article explains the reasons behind the price rise in Bitcoin. It also explains why most of those reasons are indicative of a bubble rather than a fundamental change.

The Big Fat Bitcoin Bubble

This article explains why Bitcoin is not a viable alternative to fiat currency. It also explains the reasons why the current rise in Bitcoin prices is nothing more than a speculative asset bubble.

Gold vs. Bitcoin

This article compares gold and Bitcoin. The suitability of both these assets as an alternative investment has been evaluated. The major differences between the asset classes have been listed down. The article ends with the conclusion that gold is still the better investment.

The Problem with Having Bitcoin Futures

This article explains the risks associated with Bitcoin futures trading. The commonly faced risks have been listed and explained in detail for the benefits of investors.

The Problem with Venezuelan Cryptocurrency

This article explains the details of the Venezuelan cryptocurrency called the petro. It explains what the petro is and then also lists down the major criticisms that have been leveled against the petro.

Traditional Bonds vs. Islamic Bonds Called “Sukuk”

This article explains the concept of Sukuk. It is then compared with traditional bonds. The similarities and differences between the two instruments are listed in this article.

How Decisions Made By Central Banks Affect the Stock Market?

The effect of manipulation of interest rates by central banks has been discussed in this article. This article explains why even a mere mention of an interest rate hike spooks the investors and causes a stock price crash. It also explains why the boom that was created by lower interest rates was unsustainable in the first place.

How to Leave the Euro?

This article explains how the Eurozone works? It explains the legal as well as the financial problems that a country is likely to encounter once it tries to exit the Eurozone.

Are We In A Stock Market Bubble?

This article tries to figure out whether we are in a stock market bubble as of now. The points in support of and against this argument have been mentioned in this article.

Why Does the Stock Market Crash?

In this article, the five most common causes of stock market crashes have been listed. The article differentiates between crashes and corrections. It also educates investors about the need to keep an eye on these important factors.

Hard Brexit vs. Soft Brexit

This article bifurcates between Hard Brexit and Soft Brexit. It explains the economic pros and cons of using both strategies.

What is Blockchain, Why is it so Popular, and Benefits and Challenges of Using it

This article introduces the readers to the concept behind the pioneering Cryptographic and Distributed Ledger based Blockchain technology. Using a mix of theory and practical uses of Blockchain, we argue that Blockchain has the potential to be a truly game changing innovation as well as lapsing into yet another tech trend that promised a lot. Further, this article also discusses how Blockchain which is the technology underpinning Bitcoin can lead to Disintermediation.

Cryptocurrencies and Taxation

This article explains how different tax regimes across the world tax Bitcoin and other cryptocurrencies. It also lists the implications of these tax rules.

Is This The Longest Bull Market in History?

This article explains the concept of Bull Run. It defines the way in which Bull Run and Bear Market are measured. It also lists the reason behind the current Bull Run and explains why they are not likely to continue.

Investing in Unlisted Companies

This article explains how investments in unlisted equity work. The advantages and disadvantages of investing in this asset class have been explained in this article. Some of the popular methods of investing in unlisted equities have also been explained.

Why Is Short Selling A Dangerous Financial Strategy?

This article explains the concept of short sales. It also explains some of the hazards which are most commonly associated with short selling.

Development Impact Bonds

This article explains the concept of development impact bonds. It also explains why these bonds are beneficial to all the parties involved. Lastly, it discusses some of the problems related to development impact bonds.

How Credit Enhancement Works?

This article explains the concept of credit enhancement. It mentions the advantages of credit enhancement. Lastly, it also lists the various methods of credit enhancement which are commonly used and explains their pros and cons.

How Ultra Long Term Bonds Work?

This article explains the concept of ultra-long-term bonds. It also details the use of these bonds by different countries. The case of countries like Austria and Argentina has been discussed in detail. The implications for America have also been listed.

How to Identify an Overvalued Market?

This article explains the process of identifying undervalued and overvalued markets. It also explains how the results should be interpreted.

How do Companies Choose which Exchange to List on?

This article explains the factors which companies consider before they choose to list their stocks on a certain exchange. It also explains some of the differences between the NYSE and NASDAQ.

The FAANG Sell-off

This article explains why the FAANG stocks are losing value faster than the other stocks. It lists the problems being faced by each of the FAANG companies. It also enumerates the quantum of loss that has been borne by the market in the FAANG crash.

Why are Investors Getting Spooked by an Inverted Yield Curve?

This article explains the concept of the yield curve. It also explains why an inverted yield curve is considered to be a harbinger of recession. Lastly, it also explains why the current sighting of the yield curve may not necessarily lead to a recession.

Catastrophe Bonds

This article explains the concept of catastrophe bonds. It also explains the different types of catastrophe bonds. Also, it provides detailed information about the risks inherent in catastrophe bonds as well as the type of investors who prefer to take that risk.

The NSE Co-Location Fraud

This article describes the co-location scam that the National Stock exchange of India has been found guilty of. It explains the modus operandi used in the scam and also lists the repercussions which the NSE has faced as a result of this scam.

The Economics of Blue Bonds

This article explains the concept of blue bonds. It explains how funds are raised using blue bonds and what those funds are used for. It also lists the common challenges which are faced by organizations issuing blue bonds. The financial viability of these bonds has also been discussed.

How the GameStop Saga Proves That Shoe is on the Other Foot for the Investors

This article uses Economic Theory to explain how the recent market frenzy in GameStop proves that the Balance of Power between Big and Small Investors is shifting. Using the cliché, The Shoe is on the Other Foot, we argue that technology has empowered Small Investors who are paying the biggies back in the same coin. On the other hand, the Status Quoits have won the day for now.

5 Principles of Forex Trading Systems

This article explains the concept of a Forex trading system. It also lists down the 5 basic principles that should ideally be used while formulating such a trading system.

5 Reasons Why Fundamental Analysis Does Not Work In Forex?

This article explains why fundamental analysis does not work in the market. It gives 5 reasons why such an analysis would actually be counterproductive in the Forex markets.

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