Forex Statistics

Forex Statistics

The Forex market is a fast-paced, dynamic arena – one that is often maligned. But investing in Forex can be a profitable venture – so long as you’re armed with the proper information.

By Tim Fries
https://tokenist.com/investing/forex-statistics

Forex is the world’s biggest money market; leaving stock markets way behind with a daily trading amount of over 6 ½ trillion U.S. dollars. Too fast-moving for some, it has yielded splendid results for those who are willing to roll up their sleeves and do the work. Shifting into high gear in 1973, and by the 90’s – thanks to the internet – forex became accessible to the population at large as well as to big banks.the internet opened it up to regular folks -. Today, over $6.6 trillion changes hands daily, dwarfing stock markets. This currency trading market weathered the pandemic with flying colors due to the market swings resulting from this global catastrophe.

The foreign exchange market is the largest and most liquid market on Earth. We’ve compiled a list of important, up-to-date, actionable statistics regarding Forex trading so that you know what you’re getting into if you choose to trade Forex.

These statistics have been sourced from credible, authoritative websites, as well as international surveys, central banks, and other financial institutions. The data we’ve compiled is derived from sources which include:

The Bank for International Settlements’ triennial survey released in 2019
Euromoney magazine’s 2019 FX survey
The Federal Reserve Bank of New York
The Bank of England
The Australian Foreign Exchange Committee operating under the Reserve Bank of Australia
The Bank of Japan

Although the broader market has experienced a variety of unexpected, negative effects due to the COVID-19 pandemic, the Forex market has remained relatively unscathed – at least for now. In fact, the volume of trading has increased due to the volatility that the pandemic has brought on.

It is impossible to tell how the pandemic will affect the foreign exchange market from here on out, but up to this point, the increased volatility of the global economy has brought about a huge amount of opportunities for Forex traders – particularly in the short term.

Originally published at https://tokenist.com

What you’ll learn

History of Forex Trading
Size of the Forex Market
Forex Trader Demographics and Statistics
Forex Broker Stats
Forex Currencies
Forex Currency Pairs
Forex Market by Country
Forex Trading vs Cryptocurrency

History of Forex Trading 📜

Forex trading as we now know it began in 1973, after the collapse of the Bretton Woods system, which tightly regulated exchange rates. However, Forex trading has existed in one form or another for a very long time – just about as long as humans have used coinage.

There is evidence that Forex trading, or an early form of it, occurred in ancient Babylon, Egypt, and the Byzantine Empire. In the 15th century, the famed Medici family of Florence opened banks in foreign lands specifically for the purpose of facilitating trade and currency exchange. The first true Forex market was established in the Dutch city of Amsterdam, some 500 years ago.

The story of modern Forex trading begins with the gold standard. Adopted by various countries around the world in the late 19th and early 20th century, the gold standard guaranteed the value of national currencies. Any note could be converted into a certain amount of gold.

The expenses of WW1 meant that countries had to start printing large amounts of money that weren’t backed by gold – this led to inflation, and the eventual abandonment of the gold standard in 1931.

After WW2, a new system was put in place with the Bretton Woods agreement. The US dollar was pegged to gold, at a fixed rate of $35 per ounce. The dollar became the world’s reserve and reference currency – and other national currencies were fixed to the dollar.

Eventually, the budget and trade deficits of the US, as well as its dwindling gold reserves, led president Richard Nixon to abandon the Bretton Woods system in 1971. By 1973, the modern form of Forex trading had already taken shape.

But that isn’t quite the end of the story. For the longest time, Forex trading was an arena that was solely available to large institutions with a huge amount of capital, such as governments and banks.

However, the 1990s brought with them a perfect storm for Forex trading – dozens of economies had begun the transition to capitalism, and technology, particularly the internet and electronic communication networks, revolutionized communication and information exchange.

All of a sudden, the barriers that prevented your average Joe from giving Forex trading a try were gone. The advent of retail Forex brokers allowed individual forex traders to invest far smaller sums – and it was no longer required to have an army of brokers and traders at your beck and call to participate in this form of investing.

That brings us to the present day. Now, Forex trading is popular in a number of jurisdictions. There are a number of regulated forex brokers in the United States, and several other leading countries as well.

But what does the future hold in store? We don’t claim to know for certain, of course – but today’s technological advancements are already beginning to have an effect on the Forex market. The rise of cryptocurrencies, in particular, will surely have a large effect on the foreign exchange market by the end of the decade.

Size of the Forex Market 🌐

According to BIS’s 2019 triennial survey, trading in FX markets reached an incredible $6.6 trillion per day in April of 2019.
The worth of the entire global forex trading market is estimated to approximately $2.4 quadrillion – in other words, around $2409 trillion.1
Global GDP in 2019 amounted to roughly 142 trillion dollars – meaning that the annual turnover of the forex market is almost 17 times larger.2
The forex market dwarfs even the largest stock exchanges in the world – for example, Nasdaq has a daily volume that averages around $200 billion.
Over 170 currencies are traded on the global forex market.3
Although it is already immense, the forex market hasn’t slowed down or become sluggish. Some forecasts, such as the one from the IMARC group, predict a compound annual growth rate of 6% in the next five years.4
The Forex market is the largest and most liquid asset market on earth.5
Retail Forex trading – that is to say, trading that is done by individuals, accounts for only 5.5% of the entire Forex market. Large institutions are still getting the biggest slice of the cake – thankfully, it’s an enormous cake.6
Five businesses maintain a 40% share of the global Forex market, according to Euromoney magazine’s 41st annual FX survey released in 2019.7