When did Forex Trading Start: A Comprehensive Review
Forex trading has become one of the most popular forms of investment in the world today. It has become a lucrative business that helps traders make profits regularly. But, have you ever wondered where the history of Forex trading began? In this article, we will discover when Forex trading began and how it has evolved into the multi-billion industry it is today.
The Beginning of Forex Trading
The roots of Forex trading go back to the 19th century, where people would exchange currency informally. However, Forex trading began in earnest in the early 1970s. Before that, trading between various countries was subject to fixed exchange rates, which were decided by the Bretton Woods Accord. This made it difficult for investors to speculate on currency prices.
However, in 1971, the Bretton Woods Accord broke down, and Nixon took the US off the gold standard. The US, as the currency of the world, soon floated its Dollar, causing other countries to do the same, which led to the forex markets we know today.
Evolution of Forex Trading
Forex trading has come a long way since it began in the 1970s. As technology advanced, the forex industry also evolved to offer various trading platforms, better software, and more advanced tools. This was also accompanied by the shift to electronic trading.
In the past, Forex traders would make trades by calling their brokers and placing orders. This was a slow process, and traders could miss opportunities due to delays. But now, trading is done online via various trading platforms. Also, forex trading can now be accessed by individuals worldwide, making it one of the most accessible and liquid markets in the world.
The Growth of Forex Trading
Today, Forex trading is one of the largest financial markets in the world, with around $6.6 trillion traded daily. The growth of Forex trading has been possible due to advancements in technology. The evolution of the internet, mobile trading, and electronic trading platforms has made Forex trading more accessible, and provided traders with better tools to make informed decisions.
Also, Forex trading offers traders the opportunity to make profits in all market conditions. With traditional investments, such as stocks or mutual funds, traders can only make money when the markets are rising, but Forex trading allows traders to make profits when markets are falling as well. This makes Forex trading a versatile option for investors.
How to Begin Forex Trading
If you're looking to begin Forex trading, there are several things you need to consider. First, you need to understand the basics of Forex trading. This includes learning about the various terms and concepts, such as Pips, Lots, Leverage, and Margin, that are unique to Forex trading.
Secondly, you need a trading account with a reputable Forex broker. A broker provides you with access to the Forex market and offers you the necessary tools and resources to trade effectively. You also need to choose a Forex broker that's regulated, secure, and experienced.
Thirdly, you need access to a trading platform that's compatible with your trading style and offers the necessary tools to trade. There are various trading platforms to choose from, such as MetaTrader 4/5, cTrader, and TradingView.
Conclusion
Forex trading began in earnest in the early 1970s after the breakup of the Bretton Woods Accord. Since then, it has grown into one of the largest financial markets in the world. The advent of technology has made Forex trading more accessible, and provided traders with better tools to make informed decisions.
If you're looking to begin Forex trading, you need to start by understanding the basics of Forex trading, finding a reputable Forex broker, and choosing a trading platform that suits your trading style. With the right knowledge, tools, and resources, Forex trading can be a rewarding investment option for both beginner and experienced traders.