History Of Forex Trading

History Of Forex Trading

During the end of world war II, virtually the entire world was undergoing so much chaos which majority of the western governments did feel the dare need to come up with a system that would stabalise worldwide Economy.

Commonly Identified as the “Bretton woods System,” this treaty did set all currency’s exchange rate against the gold. This system did established the entire exchange rates for just sometimes unfortunately, while the major world’s economy was growing and changing at different speeds, the rules governing the operation of the system become obsolete and limiting for that matter.

Soon enough, in the year 1971, Bretton Woods Agreement got done away with and received a replacement by another currency valuation system. The new system had the US dollar at the pilot’s seat, it is at this time that a considerable evolution of Forex market did occur, consequently leading to a free floating system in which both the exchange rates got established by the demand and supply of the respective currency.

Although, the above move was difficult at the start, advances in the technology and in communication infrastructure, eventually made it much easier.

And when 1990s finally emerged, we give thanks to the computer nerds and the massive growth of the internet ( you better say cheers to Mr. Al Gore) various individual banks started to come up with their own trading platforms. This Platforms were specially designed to give a live streaming of live quotes in the Forex market to their clients, in order to enable the clients to instantly execute trades just by themselves.

In the meantime, some of the most smartest business minded machines that does marketing, initiated the internet based Forex trading Platform for the individual traders.

These internet based trading platform is what is famously known as the Retail Forex Brokers”, it is this entities that did make it very much easier for individuals to trade simply by allowing smaller trade sizes. Dissimilar to the interbank market where the standard size of trading is usually 1 million units, the retail brokers did allow individuals to order trades with as little as 1000 units.

Retail Forex Brokers

Previously, it is only the biggest speculators and very highly capitalized investment funds were able to participate in the Forex Trade, that is Currency Trading, But, we give our gratitude’s to the Retail Forex Brokers and their foundation which is the internet, This is not the case anymore.

Having virtual nil barriers to entry, anybody, Tom, Dick and Hurry, can simply contact the Forex Broker and open an account, goes a head to deposit some money in the account, and then just Trade Forex from the comfort of his or her home, Forex Broker usually come in two forms .

1. Market Makers; just from their names they do make or rather set their own ask and bid prices just by themselves

2. Electronic Communications Networks also known as ECN, this brokers on the other cannot set their own bid and as price instead they use the best Bid and Ask price that is readily available to them from various institutions, found on the interbank market