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Trading on Forex is quite exhilarating. Given the market’s high liquidity and simplicity, it attracts traders from all over the world who want to make a quick buck. Like in years prior, the market has kept on growing in 2024. In this article, we’ll check the latest trends, stats, and other valuable data for this market.
Forex: A Truly Global Market
Given that Forex is a decentralized global OTC market, participants will likely hail from various countries and regions. The majority of traders come from the US, Japan, Hong Kong, and the UK, although people trade currencies from just about anywhere. London, in particular, is the biggest hub, with 40% of transactions coming from this city.
For example, the market has become increasingly popular in Australia over the last decade. This makes sense, given that it’s rather easy to enter the market and start trading. If you compare Forex brokers based in Australia, you’ll notice that a lot of them accept initial deposits as low as $1.
Despite the fact that the majority of traders are from the US and Asia, the dollar has been the most popular currency on the market. Approximately 33% of exchanges revolve around it, many of which are highly speculative. Experts suggest that the dollar has become even more popular in the last few years, following the start of the Russo-Ukrainian War and the Middle Eastern crisis.
Forex Market Stats in 2024
Once again, we can expect a steady Forex growth compared to years prior. Experts estimate that the market will have a CAGR of 5.7%, going from $752 billion in 2023 to $795 billion by the end of this year. This trend will likely continue in the future at a projected rate of 6.5% CAGR.
Market growth can be attributed to a plethora of macroeconomic factors, including interest rate differentials, international trade, and applicable government policies. Of course, we also can’t fully neglect the impact of inflation, which nominally changes the figures. Many people use Forex to diversify their portfolio and reduce risks.
Trader’s Daily Activity
Given the large number of daily transactions, Forex is quite flexible. It doesn’t take much to exchange currency pairs, even when the market is very unfavorable for one currency.
With a trading volume of $6.6 billion per day, participants can make enormous money on quick, short-term trades. It’s also worth noting that its daily turnout equals 22 times that of all US equity markets. This makes it ideal for speculative trading, with 90% of all transactions done with minimal prior research.
Another thing that makes Forex so interesting is that you’re allowed to trade around the clock. The market is open 24/5, with Saturday and Sunday as the only days off. Another interesting tidbit is that 88% of traders are males, with the majority of them being from 25 to 34 years of age.
Most Popular Currency Pairs
As mentioned, the dollar is the most popular currency on the market and is featured in the top 7 most common currency pairs. The majority of participants trade Euro/dollar pair, having a 22.7% frequency. The second most popular pair is dollar/yen (13.5%), followed by pound/dollar (9.5%)
While the dollar remains the most commonly traded currency and has even experienced a rise in trading participation from 2010 to 2022 (4.1% increase), it doesn’t have the fastest growth in popularity. Instead, the Chinese Yuan’s trading frequency has increased by 677% in the same period, and the currency is now present in 7% of all trades.
The pursuit of Yuan-based assets is especially intriguing yet expected. With the Chinese economy on the rise, it attracts more and more people willing to explore its profit potential. On the other hand, Euro is the biggest loser in the recent years, declining in trading frequency by 21%.
Most Popular Brokers
While the Australian dollar isn’t among the top five currencies on the market, Australians still have a major impact on how the market functions. For example, the biggest global broker, IC Markets, comes from this country. The company performs $22.68 billion worth of transactions on a daily basis, making it one of the heavyweights of the financial equity market.
The second most popular organization on the Forex is appropriately named Forex.com. They’ve been around from 2001, and are being controlled by several financial institutions, including the CFTC, CIMA, and FCA. Besides Forex, the company also deals with cryptocurrencies and CFDs.
XM closely follows IC Markets and Forex.com in terms of market trading frequency. One of the things that makes this platform so polarizing is the fast trade execution and no requotes policy. Given its minimum deposit is just $5, XM allows anyone to start trading on Forex.
Last Thoughts
If you’re looking to trade in a dynamic environment, Forex is just the thing for you. The market gathers participants from all over the world and gives them a chance to assess their skills against millions of global traders.
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