If you are involved in forex trading, you are probably going to come across the term interbank currency trading from time to time. You might see it mentioned on web sites or forums. The meaning is not necessarily very clear and you have got to know a little bit about the history of forex trading to grasp it. When hopeful foreign exchange trading commenced, after the relaxation of the gold standard which fixed relative currency values till the 1970s, it truly only concerned banks and other large money establishments such as fund executives. It was rare for personal people to be involved unless they’d money connections. The majority of the establishments – which are frequently 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 financial centers, or by wire or phone to other locations around the world. But then the internet began to take over from the telephone as the main trading medium, and at the same time it became more and more common for average citizens to have a home computer and a broadband connection. Suddenly there had been the aptitude for the average bloke to attach up to the foreign exchange market. Brokers answered to this by making software platforms which would permit people to log in and manage their own account. This reduce costs and made it advantageous for many brokers to take on clients who weren’t dealing in many thousands of greenbacks, but far littler amounts. So gradually it became less complicated for folk to trade from home. More and more of these retail traders have been coming online in the last few years, becoming concerned in the foreign exchange market to earn money – or frequently unfortunately, to lose it. You continue to may see the term ‘interbank’ used in a way that includes the whole of the forex market and people who trade it in, but strictly it shouldn’t be used that way any more. There is a difference between retail foreign exchange trading and interbank forex trading.
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