| Foreign exchange or Forex Trading exists in a foreign | | | | always be exchanged for gold, this practice did not |
| exchange market where one currency is being traded | | | | occur often, giving rise to the notion that what if |
| for another and is by far the largest financial market | | | | there was an oversupply of paper money without |
| in the world today, but what is the history of Forex | | | | having the gold reserves to back it up? |
| trading? | | | | This notion led to devastating inflation and resulted in |
| Looking back to the early days, trade began when | | | | political instability and steps were taken to protect |
| the value of goods was expressed in terms of other | | | | local national interests and foreign exchange controls |
| goods, thus, the start of an economy based on a | | | | were introduced to prevent market forces from |
| barter system or the changing or trading of goods | | | | punishing monetary irresponsibility. Forex trading was |
| between individual market players. | | | | at a standstill, fueled by the uncertainty that was |
| This began the process of interchanging or trading | | | | built by the fear of worthless foreign paper |
| different forms of items or merchandise, but as the | | | | currencies that are of no actual value. |
| system developed, so were the obvious limitations | | | | Towards the end of World War II, the United States |
| that have been realized with such a system, which | | | | stood at the forefront in the passing of the Bretton |
| encouraged early man to establish a more accepted | | | | Woods agreement in July 1944. |
| means of exchange. | | | | Decades later, with all global economies seeing better |
| In their efforts to develop a common benchmark | | | | days with the rapidly evolving global trade system |
| value for any good or item, early civilizations resorted | | | | leaning towards favorable foreign economies, Forex |
| to trading goods and services with payments ranging | | | | trading began to bounce back. Forex trading then |
| from teeth, feathers, ornamental stones and later, | | | | developed into the largest global market by far, |
| metals like gold, silver and bronze, which became the | | | | which was bolstered by international agreements |
| generally-accepted forms of early currency. | | | | lifting restrictions on capital flows in many countries, |
| It later evolved into the minting of coins from any | | | | allowing market forces the freedom to adjust forex |
| preferred metal of value, progressing years later as | | | | rates according to their perceived values. |
| paper currency among stable political regimes, which | | | | Today, the foreign exchange market is the biggest |
| served as government IOU (I owe you) notes which | | | | market in the world, averaging 3 trillion US dollars a |
| were commonly used during the Middle Ages. Forex | | | | day, with the history of forex trading as one of the |
| trading started before the first World War, as central | | | | most influential and dramatic stories that have served |
| banks all over the world supported their currencies | | | | to strengthen the global economy. |
| with gold reserves and although paper money could | | | | |