Forex Trading: MARKET SIZE

Technology advances like the internet have spawned a new craze, where anyone with a secure internet connection prepared to undertake a small amount of forex training can engage in online forex trading .

The trades taking place in the forex markets across the globe it’s known to exceed on average $1.9 trillion/day. Retail traders, this is, small speculators are only a small part of this market, but this doesn’t mean they can’t grab huge profits if they have learn the right way to trade Forex. These individual traders participate in the market through broker firms.

The global foreign exchange market can trade in excess of a trillion dollars a day. Sheer market size means there is considerable money to be made, and lost, through miscalculation. It is neither a guaranteed, nor easy path to riches, so traders should be educated in how to play the market.

The forex has several features making it a unique one. For instance, the volume of trades and the extreme liquidity of the market, a great number of the market participants and it's geographical dispersion, traders from all over the world, 24 trading hours a day, a great number of factors that can contribute to the exchange rate setting, low net margins (but not the profits) in comparison with other markets. Because foreign exchange is an OTC market where brokers/dealers negotiate directly with one another, there is no central exchange or clearing house. The biggest geographic trading centre is the UK, primarily London, which according to IFSL estimates has increased its share of global turnover in traditional transactions from 31.3% in April 2004 to 32.4% in April 2006. Other large centres include the US (with a 18.2% global share), Japan (7.6%) and Singapore (5.7%) (Chart 2). Most of the remainder was accounted for by trading in Germany, Switzerland, Australia, Canada, France and Hong Kong.