HISTORY OF FOREX

      HISTORY OF FOREX 

Forex trading , which is the act of exchanging fiat currencies, is thought to be centuries old – dating back to the Babylonian period.

Today, the forex market is one of the biggest, most liquid and accessible markets in the world, and has been shaped by several important global events, like Bretton woods and the gold standard.

Forex trading is a legalized global business of exchanging different world currencies and other financial instruments that ought to be centuries old. Its earliest beginning dates back to the Babylonian period when trading through the barter system was practiced as a means of exchange.

The general conception is that forex trading  started in Amsterdam roughly 500 years ago. Beginning in Amsterdam, Forex trading then spread further throughout the whole world. Today, the forex market is one of the largest, most liquid and accessible trading market  globally. The industry had undergone several major shifts in the past, gaining shape through critical global events like the barter system, gold coin standard, Bretton Woods Monetary Conference, and the floating method.

It’s important for forex traders to understand the history of forex trading, and the key historic events which have shaped the market. This is because similar events could likely occur again in different, but similar forms – impacting the trading landscape. History tends to repeat itself.

HISTORY OF FOREX TRADING AND WHERE IT BEGAN.

The barter system is the oldest method of exchange and began in 6000BC, introduced by Mesopotamia tribes.

Under the barter system goods were exchanged for other goods. The system then evolved and goods like salt and spices became popular mediums of exchange.

Ships would sail to barter for these goods in the first ever form of foreign exchange. Eventually, as early as 6th century BC, the first gold coins were produced, and they acted as a currency because they had the critical characteristics like portability, durability, divisibility, uniformity, limited supply and acceptability.

Gold coins became widely accepted as a medium of exchange, but they were impractical because they were heavy.

In the 1800s countries adopted the gold standard. The gold standard guaranteed that the government would redeem any amount of paper money for its value in gold.

This worked fine until World War I where European countries had to suspend the gold standard to print more money to pay for the war.

The foreign exchange market was backed by the gold standard at this point and during the early 1900s. Countries traded with each other because they could convert the currencies they received into gold. The gold standard, however, could not hold up during the world wars.

Forex trading is a skill that once mastered, you can make money from it anyday and anytime without saying a word to someone.

It is that lucrative and it can be likened to you having a blank cheque where you write the amount you need daily while trading.

Further more ::

1. Forex simply stands for Foreign Exchange* .

Foreign Exchange (forex or FX) is the trading of one currency for another. For example, one can swap the U.S. dollar for the euro.
It is shortened as *Fx*
The foreign exchange market (Forex, FX, or currency market) is a global decentralized or over-the-counter (OTC) market for the trading of currencies.

This market determines foreign exchange rates for every currency. It includes all aspects of buying, selling and exchanging currencies at current or determined

prices.

In terms of trading volume, it is by far the largest market in the world, followed by the credit market.

FEATURES OF FOREX TRADING

1. It is the largest online market.

2. It is easy to start and cheap.

3. Anybody can trade forex

4. Anybody can learn the skill and make money from it.

5. It doesn’t consume time

6. There is no limit to your income

7. It operates 24 hours but closes on weekends

With these characteristics, if you are not in forex, you are missing money. That’s just the truth.

ADVANTAGES

1. Flexibility.

2. Leverage.

3. Accessibility.

4. Source of income.

5. Few fees and commission.

6. Zero tax.

7. Automation.

DISADVANTAGES

1. Potential losses.