If you’re asking how forex trading started, the journey of foreign exchange began thousands of years ago but evolved into its modern form in the 1970s, when currencies began floating freely against one another. Here’s a breakdown of how it all began and how we got to today’s global forex market.

1. Ancient Beginnings: Barter to Coin

• In ancient civilisations, trade began with the barter system.
• As economies evolved, coins made of gold and silver began circulating across regions.
• These early forms of currency exchange laid the groundwork for foreign trade.

2. The Gold Standard (1800s – Early 1900s)

• Nations began fixing their currencies to a specific amount of gold.
• This provided stable exchange rates and facilitated global trade.
• However, during World War I, countries abandoned the gold standard to print more money for war efforts.

3. Bretton Woods Agreement (1944)

• After World War II, 44 allied nations met in Bretton Woods, USA.
• They agreed to peg their currencies to the US dollar, which was convertible to gold at $35 per ounce.
• This created a semi-fixed exchange rate system to stabilise the global economy.

4. Collapse Of Bretton Woods And Birth Of Modern Forex (1971–1973)

• In 1971, US President Nixon ended the dollar’s convertibility to gold.
• By 1973, major currencies began floating freely — meaning their value was determined by supply and demand in the open market.
• This marked the official beginning of modern forex trading.

5. Rise Of Electronic Trading (1990s Onward)

• The internet and technology revolutionised forex trading:
  • Retail traders gained access to real-time data and online platforms.
  • MetaTrader 4 (MT4) launched in 2005, becoming the most popular retail trading platform.
  • Leverage and global access made forex one of the most attractive markets.

6. Forex Today

• Over $7.5 trillion is traded daily, making it the largest financial market in the world.
• Participants include central banks, institutions, corporations, and individual traders.
• Traders can now access the market 24 hours a day, 5 days a week, from anywhere.

Conclusion

If you’re asking how forex trading started, it began with ancient trade, evolved through the gold standard and Bretton Woods system, and became what we now know in the 1970s, with the free-floating currency era. Today’s global forex market is a result of decades of economic evolution, globalisation, and technology.

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