Forex: Rate of Growth of Foreign Exchange Markets
Figures for daily turnover in foreign exchange trading
In the early 1970s, the daily turnover in foreign exchange markets was $18 billion.
Transaction volume increased more than fourfold between 1977 and 1980 and fourfold again between1980 and 1983. Trading doubled between 1983 and 1986, and tripled between 1986 and 1989, when it reached the sum of $590 billion. It increased by almost 40% between 1989 and 1992, when it amounted to $820 billion a day.
The 1995 daily foreign exchange trading figure of $1.19 trillion represents an increase of 45% on that for 1992 (or 30%, taking into account the depreciation of the dollar). The volume of foreign exchange trade has therefore increased by roughly 83 times in the last 30 years.
This massive increase in the volume of trade is due to the break up in the early 1970s of the Bretton Woods system of fixed parities among major currencies and a move to floating exchange rates. It is also due to the growing liberalisation of financial markets, and the introduction of electronic trading, which makes it possible to deal with a greater volume of trade.
FIGURES 1998:
BIS calculated that the global turnover in traditional foreign exchange markets in 1998 had reached an estimated daily average of $1.5 trillion, a growth of 26% on the figures for 1995. This slowing of the rate of growth is attributable to the introduction of the euro, and economic problems in Asia.
Global daily turnover in foreign exchange derivatives contracts traded over-the-counter was estimated at $961 billion in April 1998 (up a huge 66% since 1995). Exchange-traded currency derivatives amounted to another $12 billion daily.
The notional amount outstanding on all OTC (over-the-counter) foreign exchange derivatives in June 1998 was estimated at $22 trillion. The gross market value of these contracts was $982 billion. BIS calculated that the turnover in notional amounts of exchange-traded currency futures and options for 1998 was another $3.5 trillion.
Therefore the total figure for daily foreign exchange trading in 1998 can be estimated at $2.473 trillion, or $593.5 trillion for the year.
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Sunday, August 2, 2009
FOREX
What is FOREX?
Foreign Exchange trading
(also called Forex, FX or currency trading) describes trading in the many currencies of the world. It is the largest market, which provides a large amount of liquidity to traders.
Each day the markets trade over $1.5 trillion, if you compare the New York Stock Exchange which trades $27 billion a day you can begin to see how massive this market really is.The spot Forex market trades are settled within two banking days.
There is no central exchange like futures, and most of the trades are done electronically. The big boy's in this game are the Banks, Hedge Funds and financial organisations.
The forex market
The volume in the foreign exchange market is massive, with around $4 trillion dollars being traded every single day. The international banks and financial investment companies are the main players but especially now with the internet and high speed connections, the market has opened up to the small private investors who are entering the market in their droves. The constant fluctuation in price between currencies provide a lucrative market for the shrewd investor.
Foreign Exchange trading
(also called Forex, FX or currency trading) describes trading in the many currencies of the world. It is the largest market, which provides a large amount of liquidity to traders.
Each day the markets trade over $1.5 trillion, if you compare the New York Stock Exchange which trades $27 billion a day you can begin to see how massive this market really is.The spot Forex market trades are settled within two banking days.
There is no central exchange like futures, and most of the trades are done electronically. The big boy's in this game are the Banks, Hedge Funds and financial organisations.
The forex market
The volume in the foreign exchange market is massive, with around $4 trillion dollars being traded every single day. The international banks and financial investment companies are the main players but especially now with the internet and high speed connections, the market has opened up to the small private investors who are entering the market in their droves. The constant fluctuation in price between currencies provide a lucrative market for the shrewd investor.
Currency trading
What is Currency trading?
Currency trading is simply buying and selling currencies and making a profit from a positive price change between two different currencies involved in a trade. The two currencies involved in a trade are known as the forex pair. The most common currency involved in forex trading is the US dollar which is involved in 85% of all trades.
A forex trader will monitor the financial markets and react to trends in the movement in price between one currency and another. He makes a profit if he buys or opens a trade at a low price and sells or closes at a higher price. The skill is being able to understand what is happening in the market and correctly anticipate the upward or downward movement of currency prices.
There are many tools available to help with the analysis of the market - the most common being a variety of charts which show historical trends and patterns. Increasingly, there are new trading software packages entering the market which automates much of this process
Currency trading is simply buying and selling currencies and making a profit from a positive price change between two different currencies involved in a trade. The two currencies involved in a trade are known as the forex pair. The most common currency involved in forex trading is the US dollar which is involved in 85% of all trades.
A forex trader will monitor the financial markets and react to trends in the movement in price between one currency and another. He makes a profit if he buys or opens a trade at a low price and sells or closes at a higher price. The skill is being able to understand what is happening in the market and correctly anticipate the upward or downward movement of currency prices.
There are many tools available to help with the analysis of the market - the most common being a variety of charts which show historical trends and patterns. Increasingly, there are new trading software packages entering the market which automates much of this process
Forex Trading
How to Begin Forex Trading
For the average newbie, the Forex market can be a very scary place. Taking the time to carefully learn about the different currencies can allow you to really maximize your efforts while you are investing. The best course of action that you can take is going to the effort to actually determine how the Forex market can be beneficial to you.
The benefits that the market has for some consumers and investors may not be the best benefits though for you, it is important to determine which you are most concerned with before you start investing in the market though so that you can keep a clear perspective on your investments.
What is the minimum deposit I need to begin trading?
You can start trading with regular Individual Account with a minimum deposit of $2,000, and with a Mini-account with as little as $500. Regular accounts trade in $100,000 lots, and Mini-accounts trade in $10,000 lots.
For the average newbie, the Forex market can be a very scary place. Taking the time to carefully learn about the different currencies can allow you to really maximize your efforts while you are investing. The best course of action that you can take is going to the effort to actually determine how the Forex market can be beneficial to you.
The benefits that the market has for some consumers and investors may not be the best benefits though for you, it is important to determine which you are most concerned with before you start investing in the market though so that you can keep a clear perspective on your investments.
What is the minimum deposit I need to begin trading?
You can start trading with regular Individual Account with a minimum deposit of $2,000, and with a Mini-account with as little as $500. Regular accounts trade in $100,000 lots, and Mini-accounts trade in $10,000 lots.
Wall Street
Advantages Forex Trading Has Over Stock Investing
Wall Street has shown us that corporate companies do not necessarily tell their investors everything and can 'simulate' growth while nothing is there. Have more control about the aspects that affect the market, and although Forex is affected by so many possibles in the world - at least you know about them.
Another thing of course is the liquidity of the market. Nobody can deny that a market as large in transaction volumes is liquid.Its very over the counter nature has made it so and this is why the Forex trade is so popular with the casual home user.
This means that investment decisions can be translated into action and profits or the avoidance of a disaster within a much shorter time that traditional markets like stock investing. Administrative procedures can be a killer - a few hours could mean the difference in points, which means you can lose money while you wait for your broker to clear your investments to be sold.
How does FX trading differ from stocks on Wall Street?
FX trades are opened then closed typically within days, sometimes within hours or minutes. A margin of only 1% is required to initiate a Forex trade with our managed accounts as opposed to 50% margin required for trading stocks. $10,000 would enable you to buy or sell $1 million worth of any currency (including US dollar).
When you sell a foreign currency against the dollar, you are buying the dollar equivalently in hopes that the dollar would rise in value and you can then cash in and close your position for a handsome profit.
Wall Street has shown us that corporate companies do not necessarily tell their investors everything and can 'simulate' growth while nothing is there. Have more control about the aspects that affect the market, and although Forex is affected by so many possibles in the world - at least you know about them.
Another thing of course is the liquidity of the market. Nobody can deny that a market as large in transaction volumes is liquid.Its very over the counter nature has made it so and this is why the Forex trade is so popular with the casual home user.
This means that investment decisions can be translated into action and profits or the avoidance of a disaster within a much shorter time that traditional markets like stock investing. Administrative procedures can be a killer - a few hours could mean the difference in points, which means you can lose money while you wait for your broker to clear your investments to be sold.
How does FX trading differ from stocks on Wall Street?
FX trades are opened then closed typically within days, sometimes within hours or minutes. A margin of only 1% is required to initiate a Forex trade with our managed accounts as opposed to 50% margin required for trading stocks. $10,000 would enable you to buy or sell $1 million worth of any currency (including US dollar).
When you sell a foreign currency against the dollar, you are buying the dollar equivalently in hopes that the dollar would rise in value and you can then cash in and close your position for a handsome profit.
Currency Market
Volatility in the currency markets
Is an undeniable and unavoidable daily occurrence. With a daily turnover in excess of $1.5 billion and an uncountable number of factors playing into which way the market will move, it is impossible to forecast currencies with 100% accuracy. While large corporations employ market professionals to manage billions of dollars worth of currency risk, private individuals are often left at the whim of this massive market feeling uneducated and at risk.
Is FX in a bear market now or heading for one?
There is no such thing as a bear market in FX. Every major corporation, export-importer and every government in the world needs foreign currency every day to pay their bills. There is always FX trading around the world (200 times the size of NYSE daily volume).
As one currency goes down, another necessarily goes up. Anticipation is the challenge, serendipity being helpful as well.
Currency trading, foreign exchange trading, forex trading or Fx trading are just four different titles often given to act of investing in the currency exchange market. If you are interested in investing in the foreign exchange market, then you need to understand the currency trading basics.
Is an undeniable and unavoidable daily occurrence. With a daily turnover in excess of $1.5 billion and an uncountable number of factors playing into which way the market will move, it is impossible to forecast currencies with 100% accuracy. While large corporations employ market professionals to manage billions of dollars worth of currency risk, private individuals are often left at the whim of this massive market feeling uneducated and at risk.
Is FX in a bear market now or heading for one?
There is no such thing as a bear market in FX. Every major corporation, export-importer and every government in the world needs foreign currency every day to pay their bills. There is always FX trading around the world (200 times the size of NYSE daily volume).
As one currency goes down, another necessarily goes up. Anticipation is the challenge, serendipity being helpful as well.
Currency trading, foreign exchange trading, forex trading or Fx trading are just four different titles often given to act of investing in the currency exchange market. If you are interested in investing in the foreign exchange market, then you need to understand the currency trading basics.
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