Forex Daily Outlook
Stats and what you should know!
Stats – What You Should Know About Forex
is a unique market for many reasons. Just a couple of examples are the
fact that it isn’t centralized (trading takes place across
world) and that trading takes place all day, every day apart from a few
hours on the weekend. Another reason Forex is unique is its size. There
is many times more money being traded on Forex each than on any other
financial market in the world. This is partly for the reasons already
mentioned and partly because of other, more complex factors.
numerical terms, Forex trades around 4 trillion US dollars every day of
the year. Even at the weekend thousands if not millions of Forex trades
are being carried out instantly, so market traders can react almost
instantly to any changes in the world.
The Forex market is
known as an extremely liquid market. In fact, it is widely considered
the most liquid market in the world. This means that Forex trades and
assets can be sold very rapidly and without losing much of the value,
which is another reason why it is so attractive to the many traders
the $4 trillion traded each day, around 3.2 trillion is traded in the
main Forex markets. The biggest types of exchange in terms of value are
Forex swaps and spot transactions. These make up over half of the total
daily turnover of the Forex market, and make up the bulk of all the
market trades. A brief explanation of these two exchange types are
given below. It should be noted that there are many other types of
Spot Transaction – This is when a trader buys one
currency using a different currency in an immediate transaction.
Usually this takes place over two days, and is a direct transfer
between two different currencies.
Forex Swap – This is when a
spot transaction and a forward transaction are completed at the same
time. When a swap takes place, currency is exchanged between two
participants for a certain length of time, with both sides agreeing
that at the end of this period the currency will be exchanged back.
Forex market has many major players who trade a large percentage of the
total volume. However, this doesn’t mean that smaller private
can’t also make money. In
fact this is far from
the truth. The big Forex traders are usually international banks and
other financial institutions. To illustrate just how much of the total
volume these major players have, the top 10 currency traders make up
nearly 80% of the total volume. These include the Deutsche bank,
Barclays Capital, JPMorgan and HSBC.
interesting stat about Forex is that while potentially any currency can
be exchanged, in reality very few are regularly. For example, trades in
the US dollar make up a massive 86.3% of daily trades. The nearest
competitors are the Euro, Japanese Yen and Great British Pound. Other
than the top ten currencies very few are actually traded, despite the
fact that there are many different currencies worldwide.
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