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history of forex trading

In the history of forex trading until the end of the 90s, the only ones doing business were jetsets or wealthy people, large financial institutions such as central banks, private and government banks, and large commercial companies like Apple or Toyota. They can trade forex for trading purposes, paying debts, hedging (hedging), or investing. Large capital is needed, and not just anyone can do forex business.

After the development of the internet around the world in the late 90s, the forex market was finally able to be followed by almost all individuals, from entrepreneurs to housewives, young and old. The brokers also started designing forex so that they could be traded individually by retail. So now, from money changers, banks, to motorcycle taxi drivers who hang out in front of your alley ... everyone can jump into the Forex market!

Amazing isn't it !? Read the full history of forex trading below.

History of Forex Trading

The history of forex trading has traces since ancient times. Starting from the golden era to online forex trading, following his review.

In the history of forex trading until the end of the 90s, the only ones doing business were jetsets or wealthy people, large financial institutions such as central banks, private and government banks, and large commercial companies like Apple or Toyota. They can trade forex for trading purposes, paying debts, hedging (hedging), or investing. Large capital is needed, and not just anyone can do forex business.

After the development of the internet around the world in the late 90s, the forex market was finally able to be followed by almost all individuals, from entrepreneurs to housewives, young and old. The brokers also started designing forex so that they could be traded individually by retail. So now, from money changers, banks, to motorcycle taxi drivers who hang out in front of your alley ... everyone can jump into the Forex market!

Amazing isn't it !? Read the full history of forex trading below.End of Barter Period and Commencement of Money Exchange

In the history of human civilization, it is known that the exchange of goods between individuals begins with a barter system. For example if someone needs a goat to meet another person who sells two baskets of apples, then agrees to exchange one another, then a transaction can occur. However, over time, bartering alone is not enough to make ends meet. The problem, especially the barter system, is what if you can't find someone whose needs and stock of goods to be exchanged are exactly right !?

In order to overcome the shortcomings of barter, payment instruments or exchange tools in various forms were created. In this period, humanity used shells, beads, rare stones and precious metals as a medium. However, please note that each region can implement its own "currency" based on what is considered the most valuable, recognized by the community, and is portable (easy to carry anywhere).

Because every region in the world uses a different "currency," traders who conduct transactions between regions or cross-island and cross-continent shipping often require a universally accepted currency exchange reference. In many locations, it was agreed to use precious metals such as silver or gold as a medium.

The kingdoms that stood at that time began to print "money" each by determining the content of certain precious metals in it. In turn, exchange is based on these levels. This is the beginning of the exchange of currencies in ancient times.

When did the currency exchange take place? Byzantine records (around the 4th century BC) show that the monarchy monopolized the exchange of money. Then Papyrus's notes also show that currency exchange was done in the era of ancient Egypt. Other regions ranging from Australia, Indonesia, China, India, to Europe have their respective records. So, this is not something that suddenly appeared in modern times.

Exchange of money has been going on since ancient times, but the history of modern forex trading as it is now actually pioneered after World War II. Here's the story.

There was a lot of chaos and economic crisis at the end of World War II, so the governments of the Allied countries felt they needed a system that would be able to unite the global economy. Then the "Bretton Woods System" was formed to realize that dream.

In the Bretton Woods System which was born in the city of Bretton Woods, the state of New Hampshire, United States in 1944, for the first time there were official rules to regulate monetary relations between countries. The United States, which at that time held two-thirds of the world's gold reserves, insisted that the system be based on gold and the US Dollar. Finally, this system requires all countries involved to me

link the value of the currency to gold and US Dollars. However, it did not last long.

On August 15, 1971, the United States unilaterally severed its currency relationship with gold, thus automatically ending the Bretton Woods system. Dollar value is no longer obtained from gold reserves owned, but only from the promise of the US government alone. This action actually made the US Dollar a reserve currency for many countries in the World. At that time, exchange rates between currencies were no longer determined by default, but by following a simple economic system: demand and supply. A new phase in the history of forex trading was born, namely the floating exchange rate system.

After that, the transactions of main currency transactions are carried out by banks; while other parties such as the government and companies need to contact the bank as an intermediary. Companies that need can contact the bank via telephone, then the bank records at what price a currency is bought or sold. From this, the interbank market is created as an over-the-counter network where currencies are exchanged and the exchange rate changes dynamically.

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