History of retail FOREX.

Nowadays, when on-line FOREX became so popular among individual traders, it seems to me that the majority of participants still don’t know how it all started and then developed over the years. I’m just curious if anyone knows how and when the retail Forex began and what has changed since then? Is there anyone who wants to share his knowledge or opinion on this issue?

I can't say exactly where it started as I don't know... I did, however used to work for a company called Frankwell Investment Services in 1998 and we were doing retail FOREX. This was a Hong Kong based company and they apparently had been doing it for some time before 1998 overseas (I believe it was in the early 90's, maybe late 80's) . They claimed to have been the first to have brought the retail FOREX industry to the United States. Maybe true, maybe not.

here
http://en.wikipedia.org/wiki/Foreign_exchange_market#History

You’re right. I also met them back in 1995 and heard the same thing from them.
In any case, it came from South East Asia some time late 80’s – early 90’s. Most of the first dealers, if not all of them, were bookies registered and operating out of Hong Kong, Singapore or Macao. The oldest European forex brokers used to be bookies as well. Some of them still are.
That time dealing spread used to be 10 pips on most of the currency pairs plus $30-$80 commission per $100.000 contract on top of it. Because of that, survival rate among retail traders was virtually equal to zero.
The first company that introduced on-line trading to retail customers was CMC from London, UK in 1995.
When I began trading in 1993, the best charting software was provided by Knight Rider. It was DOS based platform with the ability to draw lines, fibo levels and a dozen of basic indicators. First Windows based charting software that could be used for forex market has been developed by Omega Research.

retail forex has recently gotten more user friendly IMO. in the 80's and 90's there were "bucket shops" on every corner in florida and places like costa rica. the term bucket shop referred to a bunch of brokers (and i am using that term loosely) sitting around calling leads, and a big bucket in the middle of the room. the client would be closed, and their check/wire would go into the bucket. if they won, theyd get paid out of the bucket. if the contract expired, obviously the bucket would get emptied, and the business owner would be paid. i am obviously referring to forex options here and not spot. the options would be so far out-of-the-money however that you would have a better chance of seeing the good lord walk the earth again than hitting your strike price. (for those who dont know a strike price is the price at which you buy your option at)for example you would buy a 2 month option in USD/JPY at like 8 cents away from the spot price. ex: spot price is 85 cents and you buy a call (long) option at 93 cents. nowadays with much heavier regulation these types of operations are not around much any more. i dont know this for sure but one would have to assume that by what you read on the NFA website about firms getting shut down left and right. www.nfa.futures.org (http://www.nfa.futures.org) i think also the general knowledge held by even a novice investor coupled with general skepticism would make it hard for retail forex scammers nowadays to actually make it worth the trouble of running retail forex firms. I mean, the disclaimers and risk disclosures on the brokers account documents nowadays are so well explained they might as well say, "YOU ARE A STUPID STUPID PERSON FOR PUTTING YOUR MONEY IN THIS CRAZY FOREX MARKET, NOW IF YOU STILL WANT TO DO THIS, EVEN THOUGH YOU ARE STUPID TO, SIGN HERE!" i think it will be completely regulated at some point but what do i know. i think im getting a little of topic here so i will conclude.
later trader