The forex broker operates on an ECN model and offers top trading technology and incredibly low spreads, making it a favourite among forex traders. With a nordfx review daily turnover of $22.68 billion, it’s no surprise that our IC Markets Review found them to be one of the most popular brokers. Changes in global monetary policy, coupled with inflation, are likely driving forex traders to more reliable fx pairs.
How Did Retail Forex Trading Start?
Activity in the forex market has increased dramatically after 1970. Based on the information provided by the Bank of International Settlements, the daily trading volumes, on average, increased from approximately 1.2 trillion in 1995 to 5.1 trillion 21 years later. This makes it the most significant financial market in the year. While banks and large financial organizations contributed to inside bar trading strategy a considerable part of the trading volumes, more customers can trade in forex using the latest technologies. The online trading platforms developed by forex brokers are simple, easy, and available worldwide.
In addition, forex trading has become more accessible to retail investors in recent years. Previously, forex trading was primarily done by animal spirits large financial institutions and corporations. However, the rise of online trading platforms has made it easier for individual investors to participate in the market. Many brokers offer low minimum deposit requirements and high leverage, which allows traders to control large positions with a relatively small amount of capital.
- Asian traders account for 12.1%, Latino traders for 11.1%, and Black traders for only 5.4% of the total.
- Average trading volume has been consistently rising during the past two decades, jumping by nearly 506% between 2001 and 2022.
- In 2019, the average daily turnover of forex trading was $6,595 billion.
- The ten leading currencies featured in the chart above boast a combined daily trading volume of $5.52 trillion as of April 2022.
- The bid price is the maximum price a buyer is willing to pay for the currency.
Exploring How Many People Trade Forex Worldwide
- Significant changes have occurred in the trading volumes and market shares of various minor and exotic fx pairs between 2010 and 2022.
- Wherever it is legal, the number of traders is increasing day by day.
- The most traded currency in the Australian FX market is the US dollar – which is found at either end of 93% of trades.72AFXC, “Foreign Exchange Turnover Report”, accessed June 30, 2020.
- There are numerous forex trading platforms available, including MetaTrader 4 (MT4), MetaTrader 5 (MT5), cTrader, and NinjaTrader.
- The most popular trading platform is still the classic MT4, which is used by 85% of traders.
Derivatives like options and currency swaps accounted for $60 billion of the total daily turnover, representing a 7% share of the local forex market compared to 93% for non-derivatives. October 2023 results correspond to a 6% increase from the previous survey conducted in April. This trend continued in April 2024 when non-derivatives generated $998 billion in average daily turnover (up 24.1% from October 2023) and secured a 92% market share. Non-deliverable forwards and currency swaps were the least traded instruments in the UK during this period.
The forex market is the largest financial market in the world in terms of trading volume, liquidity, and value. Forex trading, or foreign exchange trading, has become increasingly popular over the years. It involves buying and selling currencies, with the goal of making a profit from the fluctuations in exchange rates. Forex trading is a decentralized market, which means that it operates 24 hours a day, five days a week, across different time zones…. Without a centralized exchange for foreign currency, investors do trades through dealers and brokers who negotiate prices with each other in over-the-counter markets .
The average daily turnover of forex trading has increased by 432.19% between 2001 and 2019.
Most trades happen on an institutional level (by banks and other large financial organizations) through the “interbank” system. Individual investors can trade forex through over-the-counter markets using brokers and dealers. The forex market is by far the largest financial marketplace in the world. In 2020, the global forex market was worth over $2 quadrillion USD — a truly staggering number.
Recent forex trading statistics suggest an approximate figure, but accuracy is not guaranteed. Surveys and studies often become the best source for estimates and inferences about how many people trade forex. Recent reports by the Bank for International Settlements (BIS) pinpoint the daily forex trading volume at approximately $6.6 trillion.
The Cyprus regulator, CySEC, only allows higher leverage to customers who request it and pass the eligibility, otherwise, it is not allowed. For this reason, the number of traders in forex is not much higher in Europe as compared to the UK. Approximately 99% of cryptocurrency trades occur on centralized exchanges.99CoinCasso, “10 interesting facts about cryptocurrency exchanges! The third-largest cryptocurrency is Ripple or XRP, with a market capitalization of $8.22 billion.94Yahoo Finance, “Top 10 Cryptocurrencies by Market Capitalisation”, accessed July 1, 2020. The second-largest cryptocurrency, Ethereum, has a market capitalization of $19.4 billion.93Yahoo Finance, “Top 10 Cryptocurrencies by Market Capitalisation”, accessed July 1, 2020. The largest and most famous cryptocurrency by far, Bitcoin, has a market capitalization of $128 billion.92Yahoo Finance, “Top 10 Cryptocurrencies by Market Capitalisation”, accessed July 1, 2020.
Though the UK Financial Conduct Authority(FCA) has considered controlling the leverage, no changes have been implemented. As a result, UK traders can trade on margins, making only small deposits. Since the salary of more than 50% of UK online traders is more minor than GBP 35000, this margin trading is beautiful.
Japan Daily Forex Turnover in October 2023, by Instrument (in bn USD)
Other currencies account for 9.7% of trades, and their joint turnover adds up to $72.6 billion.86BOJ, 2019 Central Bank Survey of Foreign exchange and Derivatives Market Activity”, accessed July 1, 2020. The most traded currency in the Australian FX market is the US dollar – which is found at either end of 93% of trades.72AFXC, “Foreign Exchange Turnover Report”, accessed June 30, 2020. The UK is the largest hub of the forex market, with a 43% share of the entire global turnover. In 2016, the UK’s share of the global turnover was 37%.60Bank of England, “BIS Triennial Survey of Foreign Exchange”, accessed June 30, 2020.
This website is free for you to use but we may receive a commission from the companies we feature on this site. The Price action course is the in-depth advanced training on assessing, making and managing high probability price action trades. Johnathon is a Forex and Futures trader with over ten years trading experience who also acts as a mentor and coach to thousands and has written for some of the biggest finance and trading sites in the world. This section looks into what traders are doing in their trading, or plan on doing in their trading. All information on The Forex Geek website is for educational purposes only and is not intended to provide financial advice.
There is no doubt that technology has an impact on Forex trading. Below you can find informative statistics about Forex trading platforms and tools. A majority of the traders (52.6%) rely on news sites as part of their core trading strategy. Case studies, e-books and white papers are complementary as part of the education process.
The global Forex broker market was estimated to be worth $5.2 trillion in 2023, with projections for 2032 predicting a market growth of 10.9%, reaching a market value of $13 trillion. Reporting dealers were the biggest contributors to the Forex broker market growth in 2023. Meanwhile, the highest trading volume was recorded on currency swaps.
Their total market capitalization is estimated to be $201 billion.91Yahoo Finance, “Top 10 Cryptocurrencies by Market Capitalisation”, accessed July 1, 2020. 42% of trades in the Australian market involve currencies other than USD, AUD, and EUR.75AFXC, “Foreign Exchange Turnover Report”, accessed June 30, 2020. The second most popular currency in the UK market is the Euro – accounting for 36% of all trades.63Bank of England, “BIS Triennial Survey of Foreign Exchange”, accessed June 30, 2020.
Meanwhile, investors with foreign bonds gained to reach 17% (12% for Q1 2022), and those with alternative investments increased from 21% to 23%. Despite the great performance in other asset groups, however, in Q1 2023, one of the best performers was still the crypto market, remaining in its steady position with 29%. According to BIS, the OTC interest rate derivatives turnover amounted to a daily average of $5.2 trillion in April 2022. This indicated a 19% decline compared to data from the previous Triennial in April 2019. The reason for that drop was most likely the decline in Forward Rate Agreements (FRAs) turnover, which resulted from the Lubor reference rates that affected contracts linked to the US dollar at the end of 2021.