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Explained for beginners: Forex trade histroy
Source: | Author:finance-102 | Date2023-03-09 | 257 Views | Share:
Forex trading, also known as foreign exchange or currency trading, is the buying and selling of currencies in the global marketplace. Forex trading has a long and fascinating history that spans many centuries and continents.

Forex trading, also known as foreign exchange or currency trading, is the buying and selling of currencies in the global marketplace. Forex trading has a long and fascinating history that spans many centuries and continents.


Origins of Forex Trading


The history of forex trading can be traced back to ancient times when people began to trade goods and services with each other. As early as 2000 BC, Babylonians traded with the people of Egypt, exchanging goods such as grain, spices, and precious metals. However, it wasn't until the rise of international trade in the Middle Ages that the need for a standardized currency exchange arose.


The first known currency exchange dates back to 12th century Venice, where moneychangers would exchange currencies for a fee. These moneychangers would also lend money to traders and travelers who needed it, paving the way for the first currency market.


In the 17th century, Amsterdam became the center of the world's first international currency market. Here, foreign currencies were traded for the first time in the form of bills of exchange, which were used to facilitate trade between merchants in different countries.


Modern Forex Trading


The modern forex market as we know it today began to take shape in the 1970s. In 1971, President Richard Nixon ended the convertibility of the US dollar to gold, which had been the basis of the international monetary system since World War II. This move, known as the Nixon Shock, effectively ended the Bretton Woods system and paved the way for the free-floating exchange rates that we have today.


The rise of electronic trading in the 1990s revolutionized the forex market. Previously, currency trading was mainly done by banks and large financial institutions. However, with the advent of the internet and electronic trading platforms, individual traders could now access the forex market from anywhere in the world.


Today, the forex market is the largest financial market in the world, with an average daily trading volume of over $6 trillion. The market is open 24 hours a day, five days a week, and is accessible to anyone with an internet connection.


Conclusion


The history of forex trading is a long and storied one, spanning many centuries and continents. From the ancient Babylonians to modern-day traders, the forex market has undergone many changes and innovations. Today, the forex market is a global network of banks, financial institutions, and individual traders, all working together to buy and sell currencies from around the world.


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