There are many people that do not know that the concept of Forex trading began many years ago. Of course, when the system was first started, it did not involve the exchange of money. Instead, the people of various parts of the world would use a kind of barter system.
The barter system involved trading one item or service for another. This system was started during ancient times. The timing of this system can be proven because it was written about in ancient texts such as the Bible. The various items that were traded between one tribe and another did not involve money. People would trade food for weapons, meat for vegetables and fruit, and animals for cloth. Basically, this system involved trading one item that one tribe needed for an item that another tribe needed. This shows that the idea of foreign exchange began centuries ago even though it did not involve the trading of money.
Trading came a long way because people eventually realized that they could make coins out of the metals that they found. For example, coins were made from silver, bronze, and gold. Then people were able to use these coins to purchase goods and services that they needed from other tribes. People would travel to festivals that were held in order to trade in their coins for the items that they needed. This was the beginning of the foreign exchange currency market. Coins were traded so that people were able to care for their basic needs.
After awhile, trading became extremely popular, and this was when things began to change. People were able to exchange their silver and bronze coins for gold coins. There were a great number of people that did this, and so there were places that were started that would exchange coins for people. These were the first banks. However, the issues that arose were that the exchange rate of gold was not stable. This was when people decided that they should get together in order to work out agreements that would help to establish rules and regulations.
The Bretton Woods agreement was one such agreement that helped people to establish rules. For example, this agreement set a steady exchange rate for the price of gold. This was a great help to people because then they could rest assured that the amount of gold that they had, and the price of it, would not change.