Forex and other financial markets are a world in itself, which lives its own life. The history of exchange is long and curious; it is rich in facts that can captivate anyone interested in trading and investment.
World’s first exchange
The basics of trading were established back in early 13th century at European fairs – and they haven’t changed much since then. However, the first exchange is believed to be the fairground in Bruges, Belgium. This – largely impromptu – commodity exchange existed since 1409. The first dedicated building for an exchange was built in Antwerp in 1531.
The first exchange in Russia
In Russia exchange trading didn’t take root at first. Peter the Great, known for his reforms, established an exchange in Saint Petersburg, modelled after its Dutch counterpart, back in 1703, however, it took some effort to drive the merchants in there. As for Moscow Exchange, it wasn’t opened until 1812. By the middle of 18th century, commodity and stock exchanges were opened in literally all major Russian cities.
How Forex trading started
Forex market was established when the US government decided to abolish the gold standard in the early 70ies. This made it obvious that international currency system can no longer exist in its earlier form, and by 1978 the International Monetary Fund had drawn up a concept that foreign currencies would be traded on the basis of floating exchange rates.
The biggest stock market collapse
The biggest collapse in financial markets happened in the United States in 1929 – this was the end of a speculative boom in the stock market. Beginning in the 20ies, investment in stock became hugely popular in the US, with stock prices skyrocketing due to massive purchasing activity. When the bubble burst and traders started selling, the market collapsed. Dow Jones lost more than 40% in a week. The crash caused a long-lasting stagnation in the economy and became the reason for changing some trading rules.
The largest exchange
Whether you are trading in Forex or in any other market – you must have heard about New York Stock Exchange, rightfully considered the largest exchange in the world. This is where more than 3,500 companies’ shares are traded and Dow Jones index is calculated. Interestingly, the number of exchange members is constant and limited to 1366 persons. This is why membership is extremely expensive, you have to part with millions of dollars for a place in that building. Or you can just trade through Forex brokers.
The most controversial traders
Nick Leeson’s name became widely known thanks to a motion picture based on his true story. He was a successful trader at a British bank who was sent to Singapore to head a branch office there. As a result of aggressive trading, essentially betting against Nikkei Stock Average falling, Leeson lost about 1.5 billion dollars in 1995, causing the bank to go belly-up. However, the record in this category is held by Julian Roberts, the head of an American hedge fund titled Tiger Management. His activities in late 90ies cost investors 17 billion dollars when the stock of technology companies in which the fund invested crashed.
The most unusual investor
Some 5 years ago, the editors of a Russian magazine Finance. ran a curious experiment. They wrote company names and financial assets on 30 cubes of the same size and had someone choose 8 of them… that someone being a monkey. And what do you think? By year end, this “investment portfolio” showed better performance than 90% of Russian managers!
The most expensive error
Wrong strategies often lead to major losses. However, you can lose millions just as easily by just not paying due attention. One trader in Japan wanted to sell a single share, and ended up selling... 610,000 of them! This fateful slip of focus resulted in 350 million dollars lost and a short-term collapse of Japanese stock indices. So please be careful placing orders with your trading terminal!