Some may have you believe that forex is a boring realm of investment and that it follows a very linear path. However, such couldn’t be any further from the truth. If you look beneath the surface you will find that forex has a deep and vast history, with roots that date back hundreds (if not thousands of years). Forex actually has a fairly remarkable past, so with that said; the following are six fun forex facts that you probably didn’t know.
Forex trading may have seen its boom in the 1980s, due to the advent of the digital age. However, it is by no means a new idea and it origins date all the way back to ancient times. The very first currency transactions were handled by “Money-changing people” back in Biblical times, as such was mentioned within the Talmudic writings. These individuals were known for helping people change money, while taking a commission for their service.
The forex exchange we see today first began life back in 1850s America. Alexander Brown and Sons first started trading foreign currencies and were undoubtedly a market innovator of the time. They would eventually be followed by J.M do Espírito Santo de Silva, following their approval to trade forex the business of forex trading really picked up and competitive rates of commission became common place.
Changing the Game
Everyone seems to believe that it was the Internet that changed the way forex is approached and handled. In some senses that can be considered true, but it was in the mid 1980s that forex truly entered a new age. Developed by Reuters and aptly named Reuters Dealing, electronic forex trading via a real-time closed network chat system changed the game forever. It was the precursor to the Internet based systems we see today and would probably still be in use if the Internet had not become so popular.
You may know that the GBP/USD currency pair is nicknamed the ‘cable’, but you may not know why. It was originally given such name because prior to the fibre optic and satellite technology that is used today being implemented, a steel cable that ran under the Atlantic legitimately connected the exchange. Lag may be bad at times during today’s market, but you should be thankful that your trades don’t rely on the performance of a single cable.
An Exclusive Realm
Nowadays anyone can get involved with forex due to the advent of the Internet, but it wasn’t always like this. In the mid 1990s it was a trading arena that was almost exclusive to banks and corporations, who could offer the markets over $40 million in liquidity.
No Everyday Will be a Winning Day
PhD researcher John Forman conducted an in-depth study that showed that over 99% of forex traders couldn’t string four back-to-back profitable quarters together. It shows that in spite of thinking ahead, market volatility can unravel even the very best of trading strategies. Remember, loses are inevitable when it comes to forex and it pays dividends to not get hung up on them.
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