Astounding Facts About Forex – The Largest Trading Market The foreign exchange market, often called forex, FX, or currency market, is the largest market in the world. Trillions of dollars (USD equivalent) trade hands every day. Cory Mitchell Author Hannah Jones Editor 12 min read Published: December 14, 2021 Updated: February 24, 2023 Views: 1812Content Forex Has Massive Volume and Is the Largest Financial Market in the World Currency Trades Always Involve Two Currencies The Forex Market Circles the USD 85% of FX Trade Occurs in the Majors You Can Start Trading Forex with Minimal Capital Currencies Trade Around the Clock During the Week The Forex Market is Held Together by Several Large Banks Forex FAQsThe forex market is much larger than all the biggest stock markets in the world… combined! If you’re interested in this market, I’m going to guide you through some surprising facts and figures about forex — and provide some helpful trading tips along the way.Forex Has Massive Volume and Is the Largest Financial Market in the World The forex market has a daily average trading volume of $6.6 trillion, making it the largest financial market in the world. The volume can fluctuate based on market conditions and economic events.For comparison, one of the largest stock exchanges in the world, the NASDAQ Stock Exchange in the US, trades about $100 billion worth of stock a day. Numbers in the trillions are so big that they can be hard to understand.Billions make a bit more sense — 6.6 trillion is 66 times bigger than 100 billion. In other words, you would need 66 Nasdaq exchanges to equal the daily trading volume of the forex market.Forex Trading Has Been Around a Long Long TimeThe origins of currency trading can be traced back to the ancient civilizations of Babylon, Egypt, Greece, and Rome, where currency was used as a means of exchange for goods and services. As long as there have been currencies, in one form or another, and that currency could be exchanged for another currency, that qualifies as currency or foreign exchange.However, modern-day currency trading, also known as forex trading, started after the Bretton Woods Agreement in 1944, which attached the value of major currencies to gold and established a system of fixed exchange rates. However, there was not a lot of trading back then because the rates didn’t move much.In the 1970s, the Bretton Woods system broke down and the value of currencies floated, leading to the creation of the foreign exchange market as we know it today. Because the currencies of the world fluctuate in value against each other, that presents opportunities to profit. If you buy a currency that appreciates, you’ve made money.Further reading Moon Bitcoins Review 2023 (Legit Or Scam) Top Binary Options Brokers Reviewed in 2023 Cryptocurrency trading and binary options How long to learn binary options trading in 2023? FEATURES OF ISLAMIC ACCOUNTS FOR TRADING IN BINARY OPTIONS AND FOREX Learn to Use the Economic Calendar: Binary Options TradingCurrency Trades Always Involve Two Currencies If you want to get some US dollars, or British pounds, or euros, you need something to buy it with. This is why currencies are always listed in pairs. The pair tells you how much one currency costs relative to the other.For example, if the EUR/USD is trading at 1.1526, that means it costs USD$1.1526 to buy 1 euro. To find out how many euros it costs to buy a US dollar, take 1 and divide it by the rate. 1 / 1.1526 = 0.8676 euros to buy 1 USD.This would be the rate for the USD/EUR. Notice how the position of the currencies has flipped. The first currency listed is always 1, and the rate shown for the currency pair is how much of the second currency it costs to buy one unit of the first currency listed.There are Thousands of Currency Pairs to TradeThere are approximately 180 currencies being used in the world. Currencies are always traded in pairs. That means there are thousands of unique currency pairs.That said, most of the global forex trading volume occurs in countries with large economies and large import or export businesses. These include the US, Japan, Switzerland, Europe (euro), New Zealand, Canada, Australia, and Britain.Following up behind those, there are the currencies of Brazil, Russia, China, and other countries. These and all the other countries combine to create lots of currency pair combinations.Even with just the currencies listed above, you have loads of forex pairs, such as the Canadian dollar versus all the other currencies mentioned…and then the New Zealand dollar against all the currencies mentioned, and so on. With 180 currencies involved, the number of global currency pairs gets massive (over 16,000, in fact).As mentioned, though, most trading occurs in currencies from economically large countries. Most forex brokers offer trading in 30 to 100 of only the most actively traded currency pairs. The most heavily traded currency pairs in the world include the USD.There are Major, Minor, and Exotic Currency PairsIn the forex market, currency pairs are classified into three categories: Major, Minor, and Exotic.Major currency pairs are the most heavily traded currency pairs and include the U.S. dollar versus the euro, Japanese yen, British pound, Swiss franc, Australian dollar, New Zealand dollar, and Canadian dollar. These currencies are traded against one another and are considered to be the most liquid, stable, and widely traded currency pairs.Minor currency pairs are currency pairs that do not include the US dollar, but instead pair two non-US dollar currencies together. Minor forex pairs are typically composed of the non-USD currencies mentioned above.Exotic currency pairs include currencies of emerging markets or small countries. These currency pairs do much less volume, because not as many people, businesses, and governments are in need of the currency of the small country.Further reading Review of the OctaFX Forex and CFD Broker Top Binary Options Brokers Reviewed in 2023 Volume Based Trading Techniques (Volume Indicators) How to make money on binary options without any investment? CXMARKETS BROKER REVIEW 2023: COST AND BENEFITS Close Option - binary options broker reviewThe Forex Market Circles the USD The US dollar (USD) is the world’s reserve currency, meaning it is a currency held by central banks and other financial institutions around the world as a means of payment and to support international trade.The US dollar is widely used in international transactions. The status of the US dollar has been established over many decades as the world’s reserve currency. The reserve status is largely due to the size and stability of the US economy, as well as the international role of the US dollar in financial markets.It also means that most of the daily forex trading volume occurs in currency pairs that include the USD.Further reading What Is AdvCash Or An Off-shore Payment Card Alternative Pocket Option review 2023: pros & cons What is Forex? Unknown Facts & Figures (The Ultimate Guide) Building Small Profits, Fast: How to Use an Options Scalping Strategy for Trading IG review 2023: should you sign up with the broker? Exness Review: A Top-Notch Forex Broker and the Official Partner of Real Madrid85% of FX Trade Occurs in the Majors The exact percentage of daily forex trading volume that occurs in the major currency pairs varies, but it is estimated to be around 85% to 90%.The major currency pairs include the U.S. dollar, euro, Japanese yen, British pound, Swiss franc, Canadian, New Zealand, and Australian dollars. These are the most liquid, stable, and widely traded currency pairs in the forex market.The high level of trading activity in the major currency pairs is due to their wide use in international trade and finance, as well as the large number of market participants who trade these currencies.The high level of trading volume in the major currency pairs also makes them attractive to forex traders, who can benefit from the deep and liquid markets. That basically means you can trade huge quantities of these currencies and still get into and out of trades with ease, without affecting the price much.Currencies Change, But the Forex Market Will Always BeUnless the world gets rid of the financial system, currencies will always exist in some form or another. Currencies are just a medium of exchange to make payments, and to exchange currency for goods or services.Even with the rise of cryptocurrencies, those are still considered another form of currency. A cryptocurrency also trades in pairs, as you need to exchange one currency for a cryptocurrency, or one cryptocurrency for another. So currency traders don’t need to worry about the market disappearing. As long as currency values fluctuate, there is profit to be had in the forex market.Further reading Is Quotex a scam? Read this before trying the broker in 2023 How Long Does It Take To Get One Bitcoin? Trading Strategy: ALMA with Moving Averages What Is a Forex Cent Account? Learn the Basics! Free Online Interactive Binary Options Charts and Why You Should Use Them Top Five Richest and Most Influential Traders TodayYou Can Start Trading Forex with Minimal Capital You can start trading forex with as little as $1! That’s right, some forex brokers only require a deposit of $1 to open an account.I recommend that you start with more than that, ideally $100 or more, but it is possible to start small.Forex trading provides something called leverage. It means you can trade with more money than you deposit. Most countries allow leverage of 30:1, but some countries allow more.If you deposit $100, that means you can trade with $3000 (at 30:1). This is why you can start with a small amount and still make some meaningful profits. Currencies trade in lots of 1000, 10,000, and 100,000 units. These are called micro, mini, and standard lots, respectively.If you buy 1 micro lot of the EUR/USD, that means you are buying 1000 euros (first currency in the pair). It wouldn’t be possible to make that trade if you only had $100 in the account. You couldn’t afford even one micro lot. But because of leverage, you have $3000 you can trade with, and thus you can make this trade.Only 5% of Forex Traders are SuccessfulMost forex traders are short-term traders, such as day traders or swing traders. And only about 5% of those traders are able to consistently profit. On to the bad news: most traders do end up losing money. Some make a little bit, but only about 5% of traders are consistently profitable. This applies to all markets, not just forex.Why is this? Mainly because trading looks easy in hindsight. You see the price go up and you think “Wow, I could have made a lot of money there.” But there are also times when taking the same action would result in a loss.Most traders never develop a sound strategy for trading the market. They guess where the price might go, they risk too much or too little, or have no risk management at all. They hold onto losers and/or don’t hold onto winners long enough.With prices always moving, it looks easy to make money. But take time to learn how this market (or any market) works before trying to trade it with real capital. The market is filled with seasoned pros, and they profit off your mistakes.“Never, ever argue with your trading system” – Michael Covel Further reading How to Buy Stripe Stock What to Do if a Broker Refuses to Pay – 3 Effective Methods Top Binary Options Brokers Reviewed in 2023 Pip calculator Intrade.Bar Review: Is this Forex Broker Worth The Squeeze for Binary Options? IronFx - trading platform overviewCurrencies Trade Around the Clock During the Week The forex market is a decentralized market, which means it operates through a network of banks, financial institutions, and individual traders rather than a centralized exchange. As a result, the forex market is open 24 hours a day, five days a week.During the week, there is always at least one financial center in the world that is open for business. The forex market is open continuously from Sunday 5:00 PM EST to Friday 5:00 PM EST.On Sunday, Sydney opens first, followed by Tokyo, followed by London, followed by New York. When New York closes on Friday, forex trading ceases until Sunday when Sydney opens. Of course, there are other cities in the world, but these are the major cities that are open for business spanning the entire day, allowing forex trading 24 hours a day.Different currency pairs are most active at different times of the day. The EUR/USD currency pair is most actively traded during European and North American business hours, while the Japanese yen (JPY) is more active during Asian business hours and during the US session if the pair is USD/JPY.It is important to note that the forex market can be affected by news events and economic releases at any time, so it is important for traders to monitor market conditions whenever they have trades or orders placed in the market.Most Forex Traders are 25 – 34 Years OldWhether it is the lure of money, the adrenaline rush of trading, or more people wanting to work from home, most retail forex traders are young. About 44% of forex traders, as of 2019, are millennials aged 25-34.Only about 15% of forex traders are over the age of 45. This could be because most people are finishing up university or college in their early 20s. They may be exposed to financial markets, and so they begin trading in their 20s and 30s.They may continue to do so for a long time, or they may move on to other careers. Remember, you can always trade part-time, even if you have another job. Some markets trade all weekend, but not forex.Further reading TRADING STRATEGY ON A FRACTAL REVERSAL WITH THE RSI FILTER Take-profit and stop-loss on the IQ option platform! Live Currency Heat Map Investors take Forex platform ROFX and its founders to court The Most Popular Trading Assets For Binary Options How Сan Binary Options Brokers Cheat You?The Forex Market is Held Together by Several Large Banks As mentioned above, the forex market is decentralized. That means that when you sign up to trade with a broker, they have essentially created their own market using various banks and traders.Deutsche Bank is one of the largest currency dealers in the world. However, there are other large banks and financial institutions that are also significant players in the forex market and compete with Deutsche Bank for market share. These include institutions such as JPMorgan Chase, Citigroup, Goldman Sachs, and Barclays, among others.Further reading Trader’s profitability Calculator What Is Online Wealth Market (The Full Review 2023) BINARYCENT REVIEW: IS IT WORTH IT? Top Binary Options Brokers Reviewed in 2023 10TRADEFX REVIEW 2023: IS IT WORTH IT? Top 10 Fun Facts About Forex Trading Forex FAQsWhat is forex trading?Forex trading is the exchange of one currency for another in the foreign exchange market. It allows individuals and organizations to speculate on the exchange rate movements and make a profit.What factors affect forex exchange rates?Forex exchange rates are affected by various factors such as economic indicators, geopolitical events, interest rates, and central bank policies.What is a pip in forex trading?A pip, short for “percentage in point,” is the smallest unit of price movement in a currency pair in forex trading — Or at least, it used to be when most currencies were quoted to four decimal places. Now they are quoted to five, so the fifth decimal place is a fractional pip.What is leverage in forex trading?Leverage in forex trading allows traders to control large amounts of currency with a small amount of capital. This allows traders to potentially make larger profits, but also increases the risk of larger losses.What is a margin call in forex trading?A margin call is a demand from a broker for a trader to deposit additional funds to cover potential losses in their trading account. It occurs when the trader’s account balance falls below the required margin (the amount of capital required to maintain the position).Final Thoughts on Forex Facts & FiguresI hope you enjoyed learning some interesting facts and figures about the forex market. Forex is the largest market in the world and offers opportunities for day trading, swing trading, or investing. If you want to get involved in forex trading, you can check out the Broker Reviews section, to find a broker and get started trading forex.Further reading EasyOption Review 2023: Is It Worth It? What does a forex trader do? 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