The word Forex which is taken from the expression of Foreign Exchange and it is a global decentralized or over-the-counter (OTC) market for currency trading. Since the Forex broker has a global nature, knowing its historical background is going to help you to work with it better and become a professional trader. Here, in this article, the history of Forex broker and Forex market from the very beginning to its future is covered; therefore, you can go for it and gain the essential knowledge of chronicle.
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The History of Forex Broker
Everything in this world has its own story and knowing the story of them is going to show us what are their power points and weak points. In this regard, for being successful in the realm of Forex trading, you must know the story of it and all the stories which is related to currency exchange. Since, human beings are the type of the creatures which always seek for communication and trading, the story of Forex story goes back to the ancient time and it make progress during different era.
Ancient Period; where it all began
Once upon a time, there was an ancient, civilized, and powerful empire named Egypt and in 259 BC, this ancient kingdom started an economic activity which effect the economy of the whole world in a way that ends to Forex market. According to evidence of coinage exchange, the currency trading and exchange has happened in Ancient Egypt and then in the other ancient civilization like Roman and Mediterranean empires.
In those days, people did exchange of currencies for their essential demands such as food, house, and war equipment. It was from those days that the difference in value of currencies started; for instance, if the Greek coin was bigger or more golden than Egyptian, the trader were able to earn more than one Egyptian coin in exchange of Greek coin.
Medieval and later
After the middle age period, the exchange of currencies shifted to the first network of international banks. This movement provide a good opportunity for a famous, powerful Italian house, named Medici, to open banks in foreign locations in 15th century. They established this bank on behalf of textile merchants in order to facilitate currencies exchange in a large scale.
During the 17th and 18th centuries, an active Forex market in Amsterdam started the exchanging currencies between agents from Kingdom of England and the County of Holland.
Early modern period
In the study of history of Forex broker, the roots of modern Forex trading begun in the 19th century. The leader of this type of trading in America in 1850s was Alex. Brown & Sons trading agent. In 1880s, some new participants engage in the business of foreign exchange trading. However, many sources think of this possibility that the biggest event in the history of currency trading was the creation of the Gold Standard Monetary System in 1870s.
Before the First World War, the gold standard’s fate was doomed and it was because of the political tension that German spread in the world; therefore, European powers felt the need for military projects. In this regard, they started to print more money for investing on military requirements; because there wasn’t enough gold for the sake of such transactions. So, the gold standard underwent little revision during the interwar years.
Modern to post-modern
Modern to post-modern era play an important role in the history of Forex broker. In the period of 1899 to 1913, holdings of countries’ foreign exchange raised 10.8% annually and from 1903 to 1913, there was 6.3% raise in holdings of gold. The pound sterling was used as the world’s foreign exchange in half of the world in 1913. Some other active foreign exchange trading in this period of time were London, Paris, New York and Berlin.
By the 1928, foreign exchange trading was an integral part of the financial movements and the most countries reduced the gold standards with the outbreak of World War II. However, gold has always saved its value and it is considered a safe shelter in any time.
After World War II
In 1944, the United Nations felt that it is required to establish a monitory system to fill the hole which was created because of the reduction of gold standard. Thus, more than 700 representatives met in Burton Woods, New Hampshire. This gathering led to replacement of gold standard with dollar as the major reserve currency.
The Bretton Woods Accord was scrapped During President Nixon’s tenure and the result was a free-floating currency system. The failure of the Bretton Woods Accord and the European Joint Float led to the Forex marketing from 1972 to March 1973.
After 1973
After this time, the history of Forex broker is faced with a lot of huge changes; that is because of the emergence of monitors which replaced the traditional methods of telephone and telex for obtaining trading quotes. In mid-1980s, the electronic Forex trading begin a revolution in progress of foreign exchange and the Internet was a big-time proceed. Nowadays, Forex market is the largest financial market in the world by daily $4 to 5 trillion trading.
The Future of Forex Broker
Nowadays, Forex trading are so popular and many brokers are working successfully in this great platform. It is expected by many financial experts that Forex trading grow more and more and the future it will be more brilliant. The increasing number of participants in the Forex marketing signify the fact that it is going to be on more serious global financial plan that gather more traders for earning biggest profit.
History of Forex Broker ; The Bottom Line
For being more successful in the Forex trading, it is better to know more about its historical background. It is going to help you to increase your knowledge of Forex marketing and Forex brokers and consequently, you can use the details to guess what it the next destination of Forex brokers and trading. All in all, the history of forex broker is divided into many eras from ancient time to nowadays.
