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A History of Forex: How Online Forex Trading Developed

Ancient Currency Trading

Forex trading dates back centuries. Ever since man started developing coins out of precious metals, currency trading has gained pace. It was first practiced in Egypt and after that, it was practiced by Babylonians with the help of paper notes.

Modern Forex trading is much different as compared to the initial primitive currency trading.

Initial Evolution of Online Forex Trading

Online trading only made its debut after 1994. Earlier, Forex trading was mostly just limited to the bigger institutions and investors did not have any access to it. Only these big institutions could muster up the capital which was needed to trade as a low amount of leverage was provided during those days.

After the advent of the online trading platform, however, it has become much more accessible retail traders also.

ForexSignal.com has been providing Forex services to the individual trader since 1998, and we worked directly with one of the first individual Forex trader brokers, FXCM, since they were founded in 1999.

See a list of our favorite Forex brokers.

Regulatory Changes

In 2000, the commodity monetization act ensured that new regulations were built pertaining to online Forex trading. That is when the security derivatives, as well as the currency derivatives, were very easily traded.

in 2009 after the stock-market crash, CFTC and the NFA implemented what is now known as the NFA compliance rule 2-43. Due to these new rules, in 2010 the margin requirements to trade Forex were drastically increased.

By 2010, 10% of the total Forex trading was now being done by the retail traders. This 10% amounted to $150 billion per day. In 2011, the NFA proposed the maximum leverage options which can be facilitated to the retail traders. When you look into the leverages which are provided even after the new rules by the NFA, you would realize that it is more than sufficient for most of the retail traders. Ever since 2011, there haven’t been any major changes to the rules and regulations governing the online Forex trading platforms.

In April 2013, the online forex trading market swelled to $5.09 trillion in daily volumes. The online forex trading by retail traders reached an all-time high of $282 billion in daily volume in 2016.

Trading Forex Today

From its early modern beginnings in 1994 all the way up to today, the online Forex trading platforms have flourished not just for the institutional traders but also for the retail traders and have become much more accessible than ever.

The most popular trading platform used today is MetaTrader4. Find out why.

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A History Of MT4, and Why the World Won’t Convert to MT5

meta-iconWhat is MT4?

MetaTrader4, which we will refer to in this article simply as MT4, is an electronic trading platform generally employed by online retail foreign exchange speculative traders. It was developed by MetaQuotes Software and published in 2005. The software is licensed to forex brokers who offer the software to their customers.

History of MT4

MetaQuotes Software Corporation was established in Russia in the year 2000. Its first product, the FX charts, was online charting software that is used for margin foreign exchange trading for Windows PCs. Its gained immediate popularity among traders because of its convenience, speed, functionality and low cost compared to other specialized software that was available at that time. The triumph of FX charts motivated MetaQuotes to commence a new, more ambitious project referred to as the MetaQuote trading platform.

Although it bore a few similarities to FX charts, it was actually a new program, written completely from scratch, with more features than its predecessor. In particular, the new platform came with its programming language, the MetaQuotes Language (MQL), which enabled the users to program their trading strategies. It turned out to be even larger success than FX charts, and before long they were working on a new program referred to Metatrader.

Metatrader added a range of features to the MetaQuotes platform trading, and was again re-written from scratch to enable it to be faster, memory intensive and less processor. In addition to being able to trade Forex and CFDs, it could also be employed to trade futures and came with a new version of the programming language called MQL2. Further improvement and development followed, including the first mobile version of MetaTrader for PDA Palm, which was an immediate success with traders.

For the next version of MetaTrader, MetaQuotes aimed to develop MT4, on the basis that it was the company‘s fourth trading platform. Again, this was completely written from scratch, and it took almost two years to complete. Even before its launch in 2005, several brokers had decided to switch over to the new platform, and soon many more brokers were rushing to switch to MT4, which rapidly became the new standard for foreign exchange trading.

MT4 was developed with MQL4, which is significantly improved programming language used to create indicators and Expert Advisors (EAs), and is largely responsible for the explosion of interest in automated trading.

Popularity

Today, MT4 is the industry standard platform for online Forex, CFD, and the future trading; and has been chosen by almost all the leading brokerage firms, including FXCM, AvaTrade and Pepperstone. In fact, it has become so popular that even MetaQuotes themselves could not convert traders to their newer and improved platform, MetaTrader5 (MT5)

MT5

MT5 was released in 2010 with a host of new features and improvements, as well as the ability to trade stocks. However, the acceptance by clients and brokers has been very slow, and it has so far failed to match the success of its predecessor.

Here’s why:

3rd Party Applications:

There is an extensive community of trading programs that has built up around MT4 and the popularity of third-party applications such as Expert Advisor (EA) and Indicator software programs that are not compatible on the new MT5 platform.

The number one reason why millions use MT4

By comparison, the range of third-party programs for MT5 is quite low, which reduces its usefulness as a tool for automated trading.

The Future of Mt4

Unless MetaQuotes can create an effective bridge from MT4 to MT5 without having to redo all the current 3rd party applications, it is hard to accept the possibility that MT4 will be discontinued or that users will be required to upgrade to MT5 any time soon.

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700+ Pips and the JPY Keeps On Giving

Did You Get Your JPY Slice?

Hopefully you were also on the Yen train these last few days. Our Trend Trader system once again entered positions last week in anticipation of a strengthening JPY against the majors.

Over the last 7 years, the EUR/JPY, GBP/JPY, and AUD/JPY has consistently yielded the rewards.

If you were not on the Yen train with us, join the Trend Trader family today and enjoy the ride with us!

Below are screenshots of a few of the trades we closed on April 4th.

040417_eurjpy040417_audjpy040417_gbpjpy t

 

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You CAN Benefit From Forex Market Swings

Never A Dull Moment With Swings

As long as our world remains uncertain, we can expect Forex market swings to happen all the time. One of the reasons we have been involved with Forex exclusively for the last 19 years is that “there is never a dull moment.”

It’s these changes in events and never ending breaking news that helps fuel these moves that create Forex trading opportunity almost daily. Our Trend Trader program has been set up to constantly monitor there changing events and identify trading trends and opportunities as they unfold.

Fed Announcement – Major Market Catalyst

The U.S. Dollar rally build up to the highly-anticipated interest rate hike from the Federal Open Market Committee on Wednesday was met with a Greenback sell-off when the actual announcement hit. This created a ripe field of Forex swing trading opportunities. Here are just a few of the trades we closed out since the Federal Open Market Committee (FOMC) announced the interest rate hike last week on March 15th.

SELL USD/JPY at 114.81, opened March 15th and closed March 20th for 226 pips.

SELL EUR/USD at 1.0623, opened March 10th and closed March 20th for 106 pips.

SELL USD/CHF at 1.0137, opened March 9th and closed March 16th for 173 pips.

Of course many of the trades are still open and trading and we may keep them open to fully take advantage of the ongoing move.

View full past performance.

Forex Market Webinar

presenters for webinar - teri and ben

Upcoming Forex Webinar – presenters Teri Patterson and Ben Lewis

Learn more about how you can benefit from Forex market swings with a free upcoming webinar.

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Trade Copier & The Human Touch

Trade Copier – The Human Touch

Unlike a robotic EA, a Trade Copier can benefit from the human touch. The EA software itself doesn’t just generate automated trades based on the data in the MT4 chart, which could be set up incorrectly or based on false market data. Rather a Trade Copier, such as the one from AForex.com takes trades generated by a trading system on a master account, and trades are monitored and supervised by human traders as they are copied into the follower accounts.

navigatorThese trades are copied using EA technology from the main account, referred to as a “master” account to the follower accounts, called the “slave” or “Client” accounts.

As long as the Aforex software is online and running at the time the trade is placed in the Master account, all slave accounts will receive the exact same trade directly in their MT4 platform. The best way to keep an MT4 account online 24 hours a day is with a VPS.

Unlike EA’s set up like a robot, you don’t have to download the EA on to each chart in your MT4 platform. You just run it once, on any chart and any time frame, and you’ll automatically receive the trade copied into your MT4 platform.

Trend Trader  – Trade Copier

The beauty of the AForex Trend Trader strategy is that since 2010, the strategy has given profitable performance on a consistent basis year after year. Results are tracked and verified by 3rd party myfxbook and shows that from November 16, 2010 – February 6, 2017 it has returned 605% Gain.

Not only is the strategy well documented and historically profitable (please see risk disclaimer for more information about risk), the software is constantly updated to work well with current versions of the MT4 platform. The software is easy to use and easy to set up, and our well-trained account representatives are available to make sure that the software is set up correctly on your VPS, or ours.

If you are like so many traders who already trade on the MT4 platform, and you are looking for a solid EA, why not try out the Aforex Trader Copier system.