HFM information and reviews
HFM
96%
FXCC information and reviews
FXCC
92%
FxPro information and reviews
FxPro
89%
FBS information and reviews
FBS
88%
XM information and reviews
XM
86%
NordFX information and reviews
NordFX
86%

Know the Past to Create Your Future or the Brief Forex History


Where did Forex come from, and why we should know about its evolution? Global Forex market daily turnover hits $6.6t in 2020. Impressive, isn't it? Even if you aren't a trader at all, you must have met the word Forex at least once. However, not many people know that despite its popularity foreign exchange market is a relatively young formation. Forex, the way we see it today, appeared only 47 years ago.

The exchange as a process dates back to the Babylon times. In this case, how has Forex been shaped over the centuries to become one of the biggest and most liquid markets of all time? The major global economic events have formed it!

History tends to repeat itself. The same events may occur in different forms but with a similar impact from time to time, changing the trading environment. To save your future self from the negative consequences, you have to know the past.

How it All Began


The first thing that comes to mind when talking about an exchange is the barter system. Appeared in about 6000BC this method of getting goods has evolved in the course of time. Salt and spices were the popular mediums for exchange, and they acted like ancestors of the first gold and silver coins.

A coin played a crucial part in that time and became a widely accepted medium of exchange because it was portable, durable, uniform, limited, and acceptable. However, golden coins varied in content and size, and it made a certain amount of difficulties - a recognized standard necessity appeared.

The Gold Standard Introduction


In the 19th century, several countries adopted the gold standard. The international payment through gold was affected by the supply and demand of the metal. Hence, this monetary system aimed to fix the domestic currency prices and guarantee their value.

This idyll was broken during World War I when more money was printed to cover all the expenses. Although the system was trying to come back between the wars, but it was no use. The gold standard became irrelevant and stopped being the ultimate monetary value form.

Forex Market Becoming


All the previous stages were just the preparation before FX was formed. At the beginning of the article, we've mentioned several major economic events that shaped the foreign market. Let's discover these highlights.

Bretton Woods System


World War II showed that the universal monetary system was highly needed. Countries wanted to have a stable environment for their economics to restore themselves. Therefore, in July 1944, the Allies representatives met in Bretton Woods to discuss the arrangement, which allowed economics to maintain worldwide trading with more effectiveness.

Bretton Woods discussion resulted in the following:

The agreement set the US dollar as the only currency against gold, and the other currencies were pegged against the US dollar. It stabilized the exchange market for a while. But it was impossible to cover the high greenback demand with limited gold reserves. The global economy slowed down, and the failure of Bretton Woods came to the fore. In August 1971, the US president refused the system.

Free-Floating System


When the Bretton Woods agreement ended, it became clear that the currency market constantly evolved into a free-floating one with exchange rates based on supply and demand. From that time, a new international financial system - or just the Forex market the way we have it today - was formed.

This major event had a strong connection with the UK financial problems in the 1970s. The country floated its currency to save the value, which led to the fact that other currencies started to lose positions. That was the reason why the European economies floated their currencies as well.

The floating exchange rate system allowed the government and the central bank to keep their currency price favorable for international trading or at least try to do that.

Online Trading Era


With impressive capital turnover, the free-floating market was popular among large companies, commercial funds, and banks. Mass growth of technologies and communication helped make exchange rates fairer while the developing Internet inspired banks to create their own trading platforms. Started from 1994, online trading became possible and any trader in the world has had access to the Forex market and traded regardless of time zone or location.

Since then, anyone can find a broker to their liking, register, and start trading right from their houses. Now any trader can choose a convenient option. Brokerage companies offer different account types with their own advantages and capabilities. For example, FBS has the Demo account where people can trade virtual funds in the real market conditions. They take no risks and train before real trading.

Technological development is so progressive now that traders are able to close and open orders not only in front of their computers but also with the help of their phones - mobile trading platforms give you such an opportunity. Just download the app and manage your orders right in it.

In the modern world, there is no problem to find any information on Forex trading. The multitude of various educational materials for traders of different levels is available for free - from online webinars and articles for newbies to economic news and trading tips from analytics.

Together with technical improvements, the Forex legislative base development also has gathered pace, especially in European countries. The regulators have introduced strict policies to provide traders with honest trading conditions and supervise broker transparency.  

While the gold standard has gone, the golden age of a free international currency market with easy access for everyone has begun. Let’s enjoy it together!

#source


RELATED

Cognitive Bias That Can Affect Your Trading

A cognitive bias is a systematic flaw in reasoning that can lead to making wrong decisions while investing. A common maxim in investing is that "you are your own worst enemy"...

The Psychology Of Trading: How To Manage Your Emotions

The psychology of trading is one of the cornerstones of success, ignoring it can lead to disaster. For example, Nick Leeson single-handedly...

Trading Psychology: What Makes You Lose Money

All traders are different, but mistakes of psychological nature do not depend on gender or geographical factor. This allows us to highlight several of the most common problems...

Psychology of trade profit targets

Closing the trade at the most favourable price level is equally as important as getting into the trade at the right time. In the end, the price level...

3 things you can do after a long day of trading

Did you have a long and exhausting day of trading? Then you need to find ways to rest your mind and body. Recharge your powers by taking advantage of quality relaxation...

Is earning money online trough forex trading really possible?

Well - it is - but it is not that easy. You cannot enter the financial market expecting to become a millionaire within a few days. But if you are willing to put some time in it...

Overcoming Fear: What Leads To Losses In Trading

Everybody makes mistakes sometimes - that's absolutely normal. Mistakes are especially common at the beginning of the professional journey. But the problem is not about them...

Here's How to Trade Smart During the Coronavirus Outbreak

You are more likely to panic when your investments drop and quickly sell out your assets, however, this is not the best way to react when the markets go down...

Behavioural Biases in Trading: How to Avoid Them

Financial economists like to believe investors make investment decisions based on the principles of rationality and optimising returns. However, in the real world, this simply isn’t true

The power of trading psychology

Identifying your strengths as opposed to weaknesses can really help you step up your trading game. Learn how to do it with three simple steps...

How our fears prevent us from quitting the unsatisfying career?

You may have heard the famous quotation: "Have the courage to follow your heart and intuition. They somehow already know what you truly want to become". There are the...

Top 3 Meditation Practices for Forex Traders

Trading is often a very stressful job that requires traders to be in a constant state of concentration. It’s no secret that following theory is only a part of what traders need to do to become successful...

Why Women Trade Better Than Men

According to statistical evidence collected by Warwick Business School, women traders outperform men by 1.8%, despite trading...

Empowering Women in Trading

The celebration of International Women’s Day often places emphasis on the need for greater gender equality, and empowerment of women. However...

How to Succeed in Forex Trading

When entering forex, proper training is paramount. Relying solely on intuition is not sufficient to help one succeed in this field. Analysis and proper manipulation of the market...

How to boost your mojo

Trading is not a 9-5 job that finishes when you stop. it never sleeps. When you're not trading, you're reading and learning to get better. But there are times...

It's all about your Trading Psychology

As you prepare to start your trading day, what's the first thing that comes to mind? Is it your trading strategy? Are you thinking about different ways to minimize risk in the markets and boost your profits...

Gambling Psychology In Trading

A lot of people decide to start trading because they think it is an easy and quick way to earn money. They treat trading as a game, falling victim to the so-called gambling psychology...

Transforming Tension into Triumph: Mastering the Mindset for Effective Trading

The psychological landscape of trading financial markets is both complex and nuanced, requiring not only technical acumen and strategic prowess but also a mastery over the inner game...

Five Trading Myths You May Believe Are True but Aren't

Want to know some truths about trading? Regrettably, the trading world is one of the spheres with many trading myths – things that sound like facts but are not...


Editors' Picks

How to Choose the Best Forex Advisor 2025

Key Factors to Consider When Choosing a Forex Advisor. Risk Management. Fees and Costs. Compatibility with Your Trading Style.

Automating Success: The Benefits and Risks of Using Forex Expert Advisors

This article explores the benefits and risks associated with using Forex Expert Advisors, providing insights into how traders can maximize their potential while mitigating potential downsides.

Best Forex Brokers 2025

By prioritizing factors such as overall rating, regulatory compliance, trading conditions and platform reliability traders can make an informed decision that aligns with their trading needs and aspirations, setting the stage for a potentially prosperous trading journey.

The Top Forex Expert Advisors 2024: Performance, Strategy, and Reliability Review

An annual roundup reviewing the most successful Forex Expert Advisors (EAs) based on their performance, strategies employed, reliability, and user feedback. This piece would provide insights into which EAs have been market leaders and why.

The Evolution of Forex Expert Advisors: Navigating the Path of Technological Revolution

The concept of automated trading has been around for decades, but the accessibility and sophistication of Forex EAs have seen significant advancements in the past few years. Initially, automated trading systems were rudimentary, focusing on simple indicators like moving averages.

Best Forex EAs – Forex Expert Advisors Rating

Expert Advisors (EAs) Rating features high-quality Free and paid Forex EA most popular on the market today.

Vantage information and reviews
Vantage
85%
FP Markets information and reviews
FP Markets
81%
IronFX information and reviews
IronFX
77%
T4Trade information and reviews
T4Trade
76%
Exness information and reviews
Exness
76%
Just2Trade information and reviews
Just2Trade
76%

© 2006-2025 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.