HFM information and reviews
HFM
96%
FXCC information and reviews
FXCC
92%
FxPro information and reviews
FxPro
89%
FBS information and reviews
FBS
88%
Vantage information and reviews
Vantage
85%
XM information and reviews
XM
82%

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

In the red: How color affects a trader’s behavior

Have you ever wondered how the colors on the chart affect your trading? Color has a powerful effect on our psychology and emotional state. The psychological effect of color...

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...

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...

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...

Why Forex traders lose money

Let's address the issue of losses, and ask ourselves why Forex traders lose money. Learn real statistics and actual reasons why forex traders lose money...

Forex Trading Traps: 4 Tips How To Avoid Them

You open an order, the market goes against you, trading systems do not work, the order is closed by Stop Loss...

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...

Learning and personal development in trading psychology

Trading psychology refers to the study of human psychology and the way it can affect trading behaviour. It is considered a key contributing factor to determining trading outcomes, positive and negative, because of its influence on decision-making...

Stay Away From Suspicion

Suspicion can damage the image of what we perceive as real. When you choose to do what you like but your mind is clouded by suspicious thoughts, then there...

How to defeat the fear in Forex trading?

Fear is a natural emotion that people face a lot throughout their life. And since Forex is still quite a risky business, many traders, both beginners and experienced ones, have...

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...

Errors of traders when opening a transaction

Human's brain was formed in the conditions very different from the ones traders have to work with now. Many decision-making patterns characteristic for...

Trading, the business of opportunities

Globally, people are interested in business ideas that guarantee a steady source of income. It becomes more attractive if such ideas can be implemented at their...

How to be a Successful Trader? Tips to Improve Your Trading Mindset

You might have heard a lot of trading coaches say that a positive trading mindset is crucial if you want to achieve something in the trading world. Sounds unlikely, doesn’t it? But reality shows that trading mindset is...

Yes, we can: women in trading

We take the biggest inspiration in the stories of other people. They encourage us and help us find our way. This time we learn about the stories of four women...

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...

How to Cope with Your First Failure on the Market?

If you've suffered your first loss trading, you may feel like giving up. But, remember, this is a turning point for you and your trading journey. Stop now, and you will...

Five Reasons Why Traders Lose Money

By various estimates, 90% of traders have lost their deposited funds (completely or partially) at least once while trading in Forex. We compiled the most...

Could Forex be best job you'll ever have?

Forex trading allows you to be free and explore your true passions. Find out all the reasons why it could be the best job ever. Some people are not cut...

Is trading mindset more important than trading strategy?

Strategy is very important for entrepreneurs and can help them make a profit. Many entrepreneurs often mistake strategy as the most...


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.

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%
FXNovus information and reviews
FXNovus
75%

© 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.