The oldest forex broker in the world has been around for decades. But, which company is the oldest in the history of forex and currency exchange services?
Modern forex trading dates back to the early 1970's when the United States allowed its currency exchange rates to free-float in the market. However, currency exchange itself has long existed as an integral part of global trade since the ancient Babylonian era around 5000 years ago. Thus, the history of forex could be traced back from thousands years ago up to the current forex brokerage business model.
Who is the Earliest Currency Exchange Service Provider?
Initially, humans relied on the barter system to exchange goods between one another. Then starting from the Metal Age, gold and silver became means of payment that functioned as intermediaries in the exchange of goods and services. At a later stage, political regimes and dynasties across the world saw the need to regulate gold and silver coins as vital instrument to maintain domination in their respective regions.
Each regime wants to use money as an instrument to declare their power and prosperity. To facilitate trade abroad, cross-border traders consequently have to exchange their money in each region. The circumstances gave birth to "currency exchange services" at ports and trade centers, including along the Silk Route and all around European trading centres.
Further, people began to think about how to ease the burden of cross-border traders who normally had to carry vast amounts of precious metals and were prone to robbery. Hence, "banks" emerged to facilitate payments based on trust.
Let's say, an exporter from Paris needed to pay for the luxury glass mirrors imported from Italy to France, then he can simply send a letter to the bank in Genoa or Milan to pay the artisans. He then had to pay the corresponding amount of money (plus commission) through the bank's partners or branches in Paris. The payment order in this case may also involve an exchange between the currency used in France and the currency used in Italy.
Therefore, banks were the earliest institutions to provide "forex brokerage services" (or more precisely, currency exchange services). Unsurprisingly, top forex dealers nowadays are usually banks that have been around for decades. For example, BNY Mellon, that was established in 1784 or Morgan Stanley, that was founded in 1935. Forex experts from Berenberg Bank, the second oldest bank in the world, which was founded in 1590 in Hamburg, are also often quoted by the mass media today.
The Oldest Forex Broker in the World
The existence of forex and CFD brokers today is a consequence of three major trends in the financial world. They are:
- The development of derivative assets and hedging in Western financial centers.
- Multiple efforts to boost access toward financial investment activities for retail investors and traders.
- Accelerated technology development in the financial sector.
But, which forex broker is the oldest in the world? There is no clear chronology of who was the pioneer in the global forex industry. There are several companies that could be said as "candidates" for top figures in the history of forex. Here are four of them:
The company, which claims to have been founded in 1996, now holds licenses from the UK FCA and CySEC Cyprus. iForex have a fairly good reputation in the European region despite its dubious offshore background. Learn more about iForex here.
iFOREX was founded in 1996 by a group of bankers and forex traders. It claims to be one of the largest and most respected firms in the industry. The company is licensed by the BVI FSC, while the iFOREX Group's European subsidiary is an investment firm licensed and regulated by CySEC.
The company tries to offer traders innovative and user-friendly platforms, constantly updated financial news, and 24-hour support. Clients who open accounts in iFOREX are therefore able to trade whenever they choose, using the system they prefer while receiving instant professional support when needed.
iFOREX also says it has hedging capabilities not offered by all brokers with real-time margin protection, ensuring limits and automatically executing risk management precautions to prevent a negative account balance.
On another positive note, the company takes cybersecurity seriously, by enforcing firewalls and Secure Socket Layering (SSL) as encryption services to funnel sensitive information such as clients' personal data and passwords.
This broker advertises direct access to global markets, including 90 currency pairs, commodities, indices, shares, ETFs, and cryptocurrencies. Furthermore, trading in iFOREX offers a range of soft commodities including soybeans, wheat, corn, cocoa, coffee, and cotton. Product pricing and service offered are also quite transparent with enough information available on the company's website.
After choosing an instrument, traders can enter the deal size and click Buy or Sell in the trading platform. iFOREX tries to provide a comfortable environment for trading by presentling leverage up to 1:400. They also offer traders to practice with a demo account.
iFOREX provides clients with easy-to-use trading platforms customized to meet clients' experience and needs. Their platform accommodates trading functionalities with live and historical data about clients' account balance and open positions. Their platform is available on mobile and Web.
Unlike some brokers, iFOREX does not seem to offer trading with MT4 and MT5 platforms. With their web-based platforms, traders can access a variety of features directly from traders' computers, such as opening and closing deals, depositing and withdrawing funds and viewing account history without any downloading necessary. Based on the review of their clients, the web-based platform is ideal for traders who travel often and need full accessibility anytime and anywhere.
iForex also shows trading sentiment on their mobile app. This is a quick and easy way for a trader to see which way the market may be leaning. Traders will get a respectable mobile charting package. The information is displayed, and various technical studies can be easily added to help make trading decisions. The mobile app has advanced security measures such as fingerprint match identification to open the app for trading.
Furthermore, iFOREX has very few special features commonly found in other brokers. For example, there is no automated trading algorithms, or an ability to engage in social trading. Other services like VPS are also not offered.
If traders need a broker with satisfying customer support, iFOREX might be a good option. Online chat is available for both new and existing clients. All clients can receive customer support and technical assistance 24/7 globally, with offices located around the world and immediate service in clients' native language.
iFOREX scores very well in terms of educational products. Traders can easily find information for major trading products such as CFDs and forex. There is also information about analysis and several videos that beginners will find especially helpful.
Furthermore, They accept any method of payment, including VISA, Mastercard, Skrill, Wire Transfer, Neteller, and many more. iFOREX does not charge commissions.
Based on the review above, iFOREX has some unique features. Traders can choose a range of products besides forex. iFOREX also has good customer support available 24/7 globally. But, it is important to consider that they do not use platform MT4 and MT5 which is often found in other brokers.
OANDA initially started as a North American-based website providing free online currency conversion. The site is said to have been started since 1996. The company has evolved so far since then to be the current respected forex broker as well as provider of advanced trading technology. Learn more about OANDA here.
Traders looking for brokers with accurate precision, OANDA can be an option. That is because OANDA is a broker that provides quotes with 5-digit accuracy and active price movements that follow market developments. Order execution speed is also faster in this broker.
It provides benefits for novice traders, as they can trade with smaller volumes using the calculation system based on currency value, unlike other brokers adopting the lot system.
Founded in 1996, OANDA was built by Dr. Michael Stumm who is a lecturer in Computer Engineering at the University of Toronto, Canada, along with his colleague, Dr. Richard Olsen of The Olsen Ltd., which is one of the leading econometric research institutes. They have a head office in San Francisco, United States.
OANDA branch offices can be found everywhere. Some of these offices are located in the United Kingdom, Singapore, Japan, and Canada. With this number of offices spread, OANDA has increasingly attracted the attention of clients worldwide.
OANDA's company is registered under several well-known jurisdictions in financial trading. They are regulated by CFTC and NFA in the US, FCA in the UK, ASIC in Australia, and many others. Traders do not need to worry anymore about security when trading in OANDA. However, these advantages make trading rules at OANDA more stringent compared to other brokers.
For example, OANDA only allows maximum leverage of 1:20, because the rules in the US and Japan do not allow leverage above that. Besides, the registration procedure is more complex due to various additional requirements that are not submitted by other forex brokers. On top of that, hedging is not allowed in one trading account as the client must open an additional account to hedge.
Nevertheless, OANDA is known for being a leading broker with many advantages offered. OANDA faces increased market risk during periods of price volatility, such as economic and political news announcements. When market spreads increase or decrease, their pricing engine widens or narrows spreads accordingly. That way, traders can get the latest conditions from price movements in the market more quickly.
Prices move very fast in the market. Especially when news releases have a large impact on market volatility. This condition is often exploited by brokers to take advantage of clients with Requotes. However, traders do not need to worry about additional costs when trading with OANDA.
The company never withdraws Requotes so traders can get maximum profit. When traders are unavailable to monitor open positions, they can set take profit orders to lock in profits and Stop Loss orders to help protect against further losses.
As an experienced and well-known online forex broker, OANDA is committed to maintain an efficient trading environment that reduces latency and provid tools to help clients manage the degree of acceptable slippage.
With a fast & reliable trading platform by OANDA, clients' trades are executed in 0.012 seconds. This suits traders who choose brokers based on execution speed.
Because of this exceptional execution service, it is not surprising that OANDA won many awards, including the winner of the world's Best Retail FX Platform at the prestigious e-FX awards. The broker is also voted number 1 for Consistency of filling trades at quoted prices, Execution speed, and Reliability of platforms.
There is no minimum deposit or minimum balance required to open an OANDA account. Deposit and withdrawal can be done easily. OANDA provides a variety of payment method facilities, including Paypal, Wire Transfer, Credit Card, and Debit. Traders can adjust it to the region where they live.
OANDA provides more than 100 trading instruments, including 71 currency pairs, 16 indices, 8 commodities (Brent Crude Oil, Copper, Corn, Natural Gas, Soybeans, Sugar, etc.), 6 Bonds, and 23 Metals.
The fxTrade and MetaTrader platform are available at OANDA. These platforms can be used for Desktop and Mobile. Another plus is they have an OANDA Technical Analysis that exists in collaboration with a technical analysis provider called Autochartist.
With these platforms, clients can monitor price movements easier and automatically recognize patterns created on charts, as well as receive alerts when the awaited patterns appear. Access to this technology can be enjoyed free of charge.
In conclusion, OANDA is an ideal broker for traders in need of fast execution backed by many years of experience. The company is also a good alternative for those looking for a well-regulated broker with flexible trading and deposit conditions.
3. ETX Capital
The British company was founded as Dusrolgraph Ltd in 1965, then changed its name to Monecor (London) Ltd in 1973. Its business initially focused on providing financial intermediation services. Then in 2002, Monecor launched a brand new trading services called TradIndex which later rebranded into ETX Capital. Learn more about ETX Capital here.
4. Saxo Bank
Saxo Bank was founded in 1992 with banking licenses, but it has never provided traditional banking services to date. Saxo Bank does not extend loans, nor does it accommodate saving deposits like the usual commercial banks. Instead, the company facilitates online trading on forex, stocks, CFDs, futures, etc for institutional and retail clients. Learn more about Saxo Bank here.
Saxobank was founded in 1992 in Denmark, which began as a brokerage business. At present, they have penetrated the online banking and forex trading business internationally. The company is known as one of the best in the industry.
Their innovative platforms have been used by Microsoft's global institutions, Barclays Stockbrokers Ltd, and TD Waterhouse. The platforms include SaxoTraderGO, an award-winning trading platforms and is offered as Saxobank's flagship. Two other platforms are SaxoTraderPRO and SaxoInvestors. Each platform has advantages and functions.
SaxoTraderPRO is suitable for use by advanced traders and institutional clients, which trade faster via quick-close all features and view exchange order books and execution reports in real-time. On the other hand, Saxo TraderGO is a platform for retail traders. This type of platform offers easy portfolio management from a single account. For example, traders can get live and historic reports of net holdings.
As for Saxo Investors which is a user-friendly case-product platform tailored to retail investors, there are several advantages including browsing curated themes and pre-made screenings. Also, clients can choose between diversified investment portfolios. It is a responsive platform accessible from any device.
The Saxobank website accommodates the needs of international clients, with dozens of languages available on the Saxobank website. Besides English, there are also Japanese, Mandarin, French, Italian, Indonesian, and many more.
When clients choose Saxo, clients are choosing to trade with a fully regulated industry leader, who adheres to strict regulatory requirements in 15 financial centers around the world, including the UK, Singapore, Hong Kong, and Denmark.
Another advantage is traders have so many choices of instruments that can be traded on Saxo, covering 40,000 instruments across 184 forex pairs, 9,000 CFDs, 19,000 shares, 200 Stock options, 2,500 ETFs, Futures, Gold, Silver, and many more.
Since the company also serves as a bank, the speed of execution at Saxo can be guaranteed. However, some traders may feel that Saxobank is not suitable for individual trading, as the minimum capital is too large and the spreads and commissions are considered burdensome for so many clients. The spread which is charged by Saxobank for each pair is quite large, so it is not suitable for scalpers. Meanwhile, the commission that must be paid by traders to this broker starts from USD1.
Furthermore, Saxobank often stops trading for a few seconds before the release of important news and only activates it again after the news is released. This makes news traders do not have the best opportunity to act on Saxobank.
Actually, The deposit value can be adjusted according to the level of account chosen by the clients. There are three levels in Saxo Accounts, including Classic (minimum funding is 500 Pounds), Platinum (minimum funding is 50,000 Pounds), and VIP (minimum funding is 1,000,000 Pounds). Clients can use leverage 1:200 and a minimum lot of 0.05.
Traders are spoiled with various kinds of facilities provided by Saxobank. Each aaccount level has its own facilities offering that can be adjusted to the needs of traders. The higher the level, the more complete the facilities provided.
For example, traders who have VIP accounts will get personal relationship managers, and direct access to trading experts 24 hours. These facilities are not found when traders choose Classic and Platinum accounts.
For Corporate Clients, Saxobank provides 40,000 instruments, with 1: 1 support from expert account managers and the security that comes from their 25+ year experience.
If clients meet professional criteria, they can join Professional Accounts at Saxobank. The criteria in question include having a financial portfolio that exceeds around 500,000 Euros, having placed at least 20 relevant trades in significant sizes over the last four quarters, and having worked in the financial sector for at least one year.
Moreover, Saxobank provides more than 100 institutional specialists operating from offices in key financial centers, including Denmark, London, Singapore, Shanghai, Hong Kong, Switzerland, and Dubai. The client can choose the location closest to their area. With this kind of support, Saxobank is optimistic for delivering the right solution for the business of clients.
From the explanation above, it can be concluded that Saxo is more suitable for deep-pocket forex traders who are interested in forex trading as an investment portfolio. The broker's business focus is also more towards institutional clients rather than retail clients.