Forex is an ocean full of opportunities. The sheer size and reach of the market opens up immense possibilities for earning handsome return on their investments in short span of time. Like the rest of the world, forex markets too have been affected by the global financial recession. Global recession has been even more severe because of the failure of multi national banks which have been actively involved in forex trading. The panic caused due to the reckless decisions made by some premier financial institutions has caused severe credit crises which had affected the nation�s economy to a large extent. Due to the credit freeze many corporations are unable to avail bank credit which has affected the overall manufacturing capacity of the country. All this is not good for the nation�s economy which affects its currency too. Poor financial state of a country depreciates the value of the currency against other currencies. This primarily means that all fiat currencies which are not backed by any collateral, loose their value because of the loss of investor faith in that country and its economy. Another reason why currency value goes down is because of the efforts of the government to kick start the stalling economy, they indulge in quantitative easing which essentially means printing paper money to cover up for government deficits, expenditures and for de-freezing the credit market. Since the government is printing money without backing it with some collateral, the worth of the printed money is not more than the actual cost of the paper. This severely affects the overall currency as investors start loosing their faith and they turn towards real assets like gold and silver which have some intrinsic values. Movement of money from currencies to physical assets like gold also has a huge impact on the currency market. Recessions are always painful causing widespread panic in various parts of the country. Currency value depends primarily upon the economic stability of the nation. This happens because of the free floating nature of the currencies, as markets price these currencies in accordance to their countries economic stability and prosperity. Trading in forex in time of recession can be tricky because of the lack of any clear information and indicators. A clear strategy at this point may be to stay patient and trade only when indicators show some clear signs and opportunities. Recession has some advantages too, as smart investors can purchase a large amount of currency at discounted prices which they can sell at least two- three times their purchase value after the recession is over. Traders here should only buy major currencies like GB Pound or US dollar which has a high probability to bounce back after the financial panic is over.