Forex Game Nation

If you are concerned in forex trading, you are likely to come across the term interbank forex trading from time to time. You might see it discussed on websites or forums. The meaning isn’t always very clear and you have to know a bit about the history of forex trading to understand it.

When hopeful currency trading started, after the relaxation of the gold standard which fixed relative currency values till the 1970s, it actually only involved banks and other large financial institutions such as fund executives. It was rare for private individuals to be concerned unless they’d money connections. Most of the institutions – which are typically just called banks for simplicity – would have their own dealing desk where their staff would barter with other banks, either on a trading floor in one of the finance centers, or by wire or telephone to other locations around the planet. The average Joe could only join in on the act thru a broker, and even then, only if he had plenty of money to invest.

So initially the forex market was almost totally interbank, that means between banks. All of a sudden there was the potential for the average bloke to connect up to the foreign exchange market.

Brokers responded to this by creating software platforms which would allow people to log in and manage their own account. So gradually it became easier for people to trade from home.

More and more of these retail traders have been coming online in the last few years, getting concerned in the currency market to make money – or often , unfortunately, to lose it. That’s what can occur if an amateur is not well enough prepared for the swift moving and dodgy environment of the fx trading market. You continue to may see the term ‘interbank’ employed in a way that includes the whole of the currency market and those that trade it in, but exactly it should not be used that way any more.