History of the Spot Forex (Part A)
The Foreign Exchange Market was established in 1971 with the abolishment of fixed currency exchanges. Currencies became valued at floating rates determined by supply and demand.
The Forex grew steadily throughout the 1980’s, but with the technological advances of the 90’s Foreign Exchange Market grew from trading levels of $100 billion a day to the current level of $3.2 trillion.
Retail Spot Forex Trading has only been seriously active since around 1997 and 1998. During the 1970’s larger retail traders could trade Forex contracts at the Chicago
Mercantile Exchange. Often called the “The Chicago Merc” or “The Merc” the CME was founded in 1898 as the Chicago Butter and Egg Board.
Originally, the exchange was a non-profit organization. The CME has seen changes abound in recent years. The exchange went public in December 2002, and merged with the Chicago Board of Trade in July 2007 to become CME Group, Inc.
On August 18, 2008 shareholders approved a merger with the New York Mercantile Exchange.
CME trades several types of financial instruments: interest rates, equities, currencies, and commodities. It also offers trading in alternative investments such as weather and real estate derivatives.
Since Forex trading is a 24/7 market starting on Sunday afternoon and ending on Friday afternoon, in 1996-to-1998 online retail Forex trading became practical. Internet-based market makers would take the opposite side of retail trader’s trades (called dumb money).
you can shear sheep many times, but you can only skin them once.
These companies created Forex platforms that provided a quick way for individuals to buy and sell on Forex spot market. 1998-to-2001 began the massive stampede process that has evolved into today. Back in the old days, the wild, wild, west was born as gunslinger traders with aspirations of quick and easy profits lined up to grab their piece of the pie.
The rapid development of the Euro Dollar market, which defined meant US Dollars deposited in banks outside the US, was a major component for speeding up Forex trading.
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