The Forex Market is sometimes called the ‘market that never sleeps’ and is a popular platform for trading foreign currencies. With this form of trading, you can switch or trade euros for dollars or any other type of currency. The Forex market is widely popular and embraced in many places around the world. Many traders prefer this market because it features high benefits and is considered one of the most profitable exchange spaces for business transactions. Regardless if you’re already trading Forex or just trying to get started, there are probably a few things you don’t know. Today we’ll take a look at 15 interesting facts about the Forex Market.
15 Interesting Facts About the Forex Market
Though you may know some of these Forex fun facts, let’s see if we can list some that you don’t know yet!
#1 – 5.3 trillion dollars traded daily in the Forex Market
Though this number can vary between trading days, on average, 5.3 trillion dollars are traded in the Forex market each day. This number has been steadily increasing since the 1990s and recently even topped out at $6.6 trillion in a single day.
#2 – 4x volume of trading in Forex compared to the Global Gross Domestic Product
Yes, you read that correctly! The total worth of the Forex trading market is four times larger than the global gross domestic product.
#3 – 126,119, if spending $1 per second
This figure represents the number of years it would take to spend the value of the daily turnover in FX. It’s safe to say that’s more money than a person could (or should) spend in a lifetime!
#4 – 170 different currencies are traded around the world
Currencies are what drive Forex trading, so it only makes sense that many of the world’s currencies are traded on the platform. With Forex, you can choose from types of money such as the Japanese Yen, United States Dollar, the Euro, New Zealand Dollar, Swiss Franc, Indian Rupee, and many more.
#5 – 85% of all Forex trades occur on only 7 currency pairs
Among all of the different currencies traded on Forex, the highest volume comes from seven currency pairs. These pairs are Euro to United States Dollar, USD to Japanese Yen, Great Britain Pound to USD, Australian Dollar to USD, New Zealand Dollar to USD, USD to Canadian Dollar, and USD to Swiss Franc.
#6 – 90% of all foreign exchange transactions include the US Dollar
As you can see from the seven most commonly traded currency pairs, the US Dollar is hugely popular with Forex traders.
#7 – 66% of US currency held overseas by private individuals, foreign governments, and institutions
Of all the US currency traded overseas, about 66% of it is held by private individuals, foreign governments, and other institutions. While these assets can serve numerous purposes, most of them are held to ensure that central governments have backup funds if their national currency decreases rapidly in value or becomes completely insolvent.
#8 – 53x foreign exchange trading volume compared to NYSE
Sure, trading stocks, bonds, and commodities on the New York Stock Exchange is popular, but the volume of foreign currencies traded through Forex is 53 times larger.
#9 – 12x foreign exchange trading volume compared to the Futures Market
The same thing can be said for the Futures Market, but the difference isn’t as vast as it is between Forex trading and the NYSE. Still, though, foreign exchange trading has volumes that are 12 times larger than that of the Futures Market.
#10 – 21% market share of Deutsche Bank, the largest foreign exchange dealer
Deutsche Bank is a force around the world and has been for many years. It consistently ranks as one of the world’s largest banks, but most people don’t realize it is also the largest foreign exchange dealer. In fact, the bank controls 21% of the market share in terms of Forex trading.
#11 – 41% of all Forex transactions are conducted in the United Kingdom
While the largest foreign exchange dealer is located in Germany, most transactions are conducted in the United Kingdom, as nearly 41% of all Forex transactions are organized there.
#12 – 5% of total volume in Forex is attributed to retail traders
Forex investors and traders come from a wide variety of backgrounds. Most of the Forex market volume is conducted by financial institutions such as central banks, investment managers, commercial banks, multinational corporations, and hedge funds. Only a small percentage, 5% to be exact, accounts for retail Forex trading worldwide.
#13 – 11% female traders represented in the Forex Market
Judging by the statistics, Forex trading is a largely male-driven industry. Female Forex traders only represent 11% of all traders around the world. While some misconceptions exist, such as women don’t take part in foreign currency trading because they are bad with numbers, this couldn’t be further from the truth. Among the active women in this industry, some are very successful, with some even being considered influencers.
#14 – 44% of Forex traders are between the ages of 25 and 34
It seems that Forex trading is gaining popularity among younger people. In fact, 44% of all traders are between the ages of 25 and 34. Young people tend to gravitate toward this type of trading because it’s easily accessible and offers an opportunity for them to turn their knowledge into real cash. This is something that has become even more popular over the last year or so after COVID-19 shattered more conventional types of employment. Forex trading offers the chance to work remotely, from anywhere in the world, using any type of computer.
#15 – 99% of retail Forex traders are unable to achieve more than 4 consecutive quarters of positive returns
When it comes to retail Forex traders, 99% of them cannot achieve positive returns for an entire year. The reason for this may be that they are undercapitalized in relation to the size of trades made. This can boil down to greed or the idea of controlling large amounts of money using only a small portion of capital that causes them to take on fragile and huge financial risks.
In the end, Forex trading can be a very lucrative career for those who take it seriously and put in the work to understand how the market works. If you’re considering starting in currency trading, you should learn as many facts about Forex as possible and copy pro traders with their processes.
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