It is said that learning from the past is the best way to predict the future. Now, let's go back to the past a bit to learn the history of the market from its inception until it's as complex as it is today.

The source of currency exchange


The concept of currency trading or exchange can be traced back to ancient times, when traders from different sectors demand currency exchange when trading from one country to another. In ancient Egypt, the first coin was used, and then paper money appeared in the Babylonian times. The process of currency exchange continued until the Middle Ages and began to be maintained by inter-national banks, which was the first early form of the forex market. This has spurred the development of Europe and spread to the Middle East. Therefore, it can be said that the forex market has the longest history compared to all other markets. It is also an advantage for the remaining markets.
History market Forex?

Gold standard system


The gold standard system is a financial system used in which transaction criteria are based on a fixed value of goods (here is Gold). That means a certain amount of gold is assigned as a unit to exchange with other currencies. It started in 1816, when the Pound was set to be worth the equivalent of 123.27 grams of Gold. It also means that the value of British banks has been determined and vice versa it also helps the British currency keep its value in the market. The United States also adopted the gold standard system in 1879 and the US dollar replaced the British pound when European countries stopped using the gold standard system because World War I broke out.


Bretton Woods system


When World War II ended, the status of the great powers changed. Britain must experience a heavy financial and crisis crisis, while the United States maintains its status after the war. The US dollar was crowned and became the new standard in the financial market. Then at the Bretton Woods conference, the international decided on the value of currencies at fixed exchange rates for US dollars, taking the US dollar as the main reserve currency and it was the only currency. Guaranteed in gold. This is called the Bretton Woods system.

Free exchange rate system


In the 1970s, a number of great powers, including Britain, went through many things; Financial scarf and began to float their coins. The Smithsonian Agreement was signed in 1971 to create a more flexible agreement than the Bretton Woods agreement, whereby the rates of currencies could fluctuate more than before. The European market also tried to find a way out of its dependence on the US dollar to ensure the flexibility of other currencies as more and more joint ventures and many contracts were signed. Afterwards, both the Smithsonian and the European Union of Freedom were broken, signaling the official move to the free-floating floating system at which every currency's exchange rate was due to supply-side relations - demand decision. At that time, governments were free to choose to control, partially control or completely float their currencies.
Online trading - The great revolution of the foreign exchange market

In 1994, online currency trading began to launch, with the first foreign exchange (forex) transaction being conducted via the internet. This can only be realized when there is a combination of technical progress, telecommunications infrastructure and policy innovation. Since then, the forex market has grown to the present day, with 5000 billion dollars traded each day. The big change in the forex market is that anyone can now invest in this market. Most participants in forex trading are mainly due to this market's over-investment opportunity.