History of Forex Trading

Forex comes from the two words "Foreign Exchange" and one usually refers to other phrases such as ‘Spot FX’ or even just ‘FX’. One of the simplest definitions of Spot FX is "Forex trading is the exchange of currencies at varying exchange rates, which result in profit (or loss) for those who participate as traders."

What we today know as Forex trading was born in 1971 when floating exchange rates began to materialize. This Forex market has enjoyed tremendous growth, especially since the dawn of the Internet where it has advanced with massive strides to help normal retailers to make trades anytime 24 hours a day in every country of the world.

Initially to trade in the Forex market was the domain of only large banks, companies and governments, or anyone with millions of dollars. After having come to the minimum trade of a few hundred thousand dollars, today each trade needs just ten thousand dollars and with the use of leverage this means that a retail customer can now have a minimum deposit level even below one hundred dollars only.

Thus meaning currency trading is open to people of various economic levels and not just the highly privileged status. People from all walks of life have begun to join in and personally we have seen some lower middle class gentlemen, drop their primary businesses to take a pie of the Forex market.

Earlier, the FOREX interbank market was not meant for and even did not cater to small retail segments. Changes in the minimum transaction size and minimum deposits and also changes in the earlier-strict financial requirements all of this means that small retailers and traders are now included into participating in this market.