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Forex Market Statistics

The Forex Market General Statistics 

FOREX MARKET STATISTCSThe Forex Market is a decentralized OTC (Over-the-Counter) financial market. Forex is running 24 hours per day using the electronic network of banks (ECN). It is estimated that the Forex turnover today may exceed 4 trillion dollars per day. Forex volumes are generated mainly from speculators. It is estimated that 90% of the Forex trading volumes are generated by speculators (day-traders).

 

Forex Market Structure

The global free-floating Forex currency system started in 1971 as the Bretton Woods agreement ended. The online Forex trading market started in the late 1990's. Forex is an open 24-hours market {Sunday 5pm (EST) - Friday 4pm (EST)}. Forex Trading starts in the Asia-Pacific and continues in the Middle East, in Europe, and in the US.

 

The Most Traded Currencies

The US Dollar is traditionally the most traded Forex currency in the world (85% of all Forex transactions). The Euro is the second most traded Forex currency (39% of all transactions and the Japanese Yen is the third most traded Forex currency (19% of all Forex Transactions). Each Forex transaction involves 2 pairs so the grand total of all transactions equals 200% and not 100% as in every other financial market.

Chart: Most Traded Forex Currencies

FOREX CURRENCIES

Chart: World Fx Reserves & Currency Composition

Untitled 4

Most Traded Forex Pairs

Here are the weights of the most traded Currency Pairs:

  • EURUSD, 37% of the total volume
  • USDJPY, 13% of the total volume
  • GBPUSD, 12% of the total volume
  • AUDUSD, 6% of the total volume
  • USDCHF, 5% of the total volume
  • USDCAD, 4% of the total volume
  • EURJPY, 2% of the total volume
  • EURCHF, 2% of the total volume

 

Major Cross Rates 

Here are the most popular Forex Crosses: EURJPY | EURGBP | EURCHF | GBPJPY | GBPCHF

 

Forex Market Size (According to BIS)

The Forex market is the largest in the world with daily turnovers of 4 trillion USD on average. That makes Forex 12 times larger than global equity markets while the Forex annual turnover equals 10 times the global GDP.

 

Major Forex Markets

The New York and London markets are the largest and account for about 50% of the total Forex daily turnover. As concerns the Forex market overlap, about 65% of the New York volume activity occurs in the morning, when the New York Market overlaps with the European markets.

Table: Forex Market and Geographical Volume Activity Distribution

Forex Market

Volume Activity (%)

United Kingdom

37.0%

United States

18.0%

Japan

6.0%

Switzerland

5.0%

Singapore

5.0%

Honk Kong

5.0%

Australia

4.0%

All the Rest

20.0%

 

The Forex Volume Activity Concentration in Large Banks

Forex turnover is concentrated in large banks. 7 banks in the US account for about 75% of the country’s total currency turnover. The same is valid for Japan. In the U.K. 7 banks account for about 75% of the total currency turnover. The Swiss Forex activity is far more concentrated as 2 banks account for about 75% of the total currency trading activity in Switzerland. Furthermore and as concerns the Global Forex Market, 10 institutions  account for about 73% of the total activity. The UBS and the Deutsche Bank are some of the largest players in the Forex Market.

 

Forex Historic Volatility -Analytical Results

Here is FxPros.net research on the Historic Forex Volatility. The results of the analysis are divided into 3 main periods: 2000-2004, 2005-2009, 2010-2013

ANALYTICAL RESEARCH RESULTS

3-PERIODS

 

 » 2000-2004 

 

 

 » 2005-2009 

 

 » 2010-2013 

Summury Results » Forex Market Volatility Summary

 

Find more: » Forex Trading Tips | » Choosing Fx Pros | » Forex Trading Guide |  » Forex FAQ for Traders

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General LinksBIS | IMF | Eurostat

 

Forex Market Statistics

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Forex Trading Tips

The Forex Trading TipsForex Trading Tips for Beginners

Forex Trading is a highly complicated job. Here are some trading tips from FxPros.net..  

Forex Trading Tip 1:

“Know what you are trading”

The behavior of all currency pairs is not the same. Some currency pairs tend to be much more volatile and move faster than other pairs.

Table: Forex Currency Pairs & Volatility

HIGH VOLATILITY

MEDIUM VOLATILITY

LOW VOLATILITY

 EUR/AUD, EUR/CAD, AUD/USD, 

NZD/USD, USD/JPY, USD/CAD,

EUR/JPY, CAD/JPY 

 EUR/USD, GBP/USD, AUD/JPY, 

USD/CHF, 

 EUR/GBP, EUR/CHF 

» FxPros Research on Forex Market Volatility during 2000-20013

Knowing the special characteristics of each currency pair can really make the difference. That is why it is better to trade a couple of Forex pairs than trading 5-10 Forex pairs. Knowledge is power when trading Forex.

Find the most complete Forex Trading Guide in the web: » Forex Trading Guide at FxPros.net

A BUILDER -FREE FOR CREATING MT4/MT5 INDICATOR

 

Forex Trading Tip 2:

“Follow the Trend”

There are two ways to trade the Forex market. Either you are following the master trend or either you are trading against the master trend to profit from possible reversals. Been able to identify the right timing of a trend reversal is really difficult task even for Forex pros. The momentum in the Forex market usually lasts longer than any other capital market. It is better to trade in the same direction of the current trend, and this is valid even more as concerns Forex Beginners.

 

Forex Trading Tip 3:

“Use always a Stop-Loss Order –it is your trading shield”

This is maybe the most important of all Forex trading tips. A stop-loss order minimizes the potential of your loss when trading Forex, CFDs or any other type of derivatives. Unexpected news can make a currency extremely volatile. If you are trading without a stop-loss in the long term in a matter of months you will probably loose your total capital. Trading without a stop-loss is like going to war without a shield. Furthermore, any technological inefficiencies, like for example a PC breakdown, can lead to extreme losses without a stop-loss.

Usually a stop-loss order is 20 pips below the current price. As concerns high-volatility currency pairs a stop loss order can be 25-30 pips below the current price.

 

Forex Trading Tip 4:

“Adjust your Trading Leverage according to the market volatility”

Most Forex beginners see the Trading Leverage as a gift from their broker. Actually the rate of leverage is a factor that widens trading risk furthermore. If you use high leverage in all your Forex trades you will probably loose money in the long-run. This is because if you use high leverage you are forced to place a stop-loss order close to the current price and that makes you very vulnerable to market volatility. Don’t forget that trading is not free, you are paying either spreads or commissions or both. High leverage should be used only in special occasions when the probability of winning is really high.

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Forex Trading Tip 5:

“Choose only Trades with High Profit / Loss Ratio”

Money management is very crucial when trading Forex and especially as concerns the evaluation of the Profit / Loss ratio. If you choose trades with a low Profit / Loss ratio (for example P/L= 1) you will probably loose money. For example, let’s suppose you have executed 100 low-reward trades in a certain period as follows:

-55 winning trades

-45 loosing trades

If your profit / loss ratio was P/L=1 you will have probably lost money. That is because you pay a spread or a commission in every trade you execute, and the price of spread in 100 trades will be larger than the profit of 10 trades (55-45). So it is far better to wait and execute only trades with a high Profit / Loss ratio (P/L>2). This is especially valid for currency pairs which are offered in high spreads (minors).

 

Forex Trading Tip 6:

“Adjust you Stop-Loss and Don’t be Greed”

If you have entered a trade that has moved strongly in a desired direction you shouldn’t be greed. That doesn’t mean necessarily you should take the profit and run,  it means that you should re-adjust your stop-loss. Let’s suppose you have opened a position on EUR/USD:

Opened: 1.2800

Stop-Loss: 1.2760

During the same day EUR/USD has moved to 1.2890. Now, you can adjust your stop order at breakeven level (1.2800) and thus eliminating the possibility of loss in that particular trade. When you have entered a trade that have started to consolidate, close half of your lots and don’t be greed.

 

Gcmfx 2013 Collateral Trader Copier 468x60

 

Forex Trading Tip 7:

“Evaluate the Major Support and Resistance Levels”

Most Forex Traders are using technical analysis to determine the entry / exit points and time to trade. Been able to evaluate the master support and resistance levels is absolutely crucial in order to optimize your decision making process. Currency pairs tend to accumulate and move slower when reaching major support and resistance levels. In addition the volume activity tends to get stronger. Know and respect the major support and resistance levels of each currency pair you trade.

 

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Forex Trading Tip 8:

“Choosing Timing & Forex Sessions Overlap”

There are certain hours when the Forex sessions overlap and during those hours, volume is increased offering greater trade opportunities. In the table below you can see the two Forex Market time zones. 

Forex Time Zone

Forex Winter Time Zone (October - April)

Forex Summer Time Zone (April - october)

 

EST

GMT

EDT

GMT

New York (Open-Close)

8:00 AM
5:00 PM

1:00 PM
10:00 PM

8:00 AM
5:00 PM

12:00 PM
9:00 PM

London (Open-Close)

3:00 AM
12:00 PM

8:00 AM
5:00 PM

3:00 AM
12:00 PM

7:00 AM
4:00 PM

Tokyo (Open-Close)

7:00 PM
4:00 AM

12:00 AM
9:00 AM

8:00 PM
5:00 AM

12:00 AM
9:00 AM

 

Forex Sessions Overlap

(i) At times when the European and the American markets are both open (between 8 am to 12 am EST) trading GBP/USD, EUR/USD and USD/CHF can lead to better performance.

Other good times for trading include:

(ii) 1 am to 3am (EST), when the European sessions are starting and the Asian sessions are closing.

(iii) 7 pm to 10 pm (EST), when the Asian and Australian sessions overlap.

 

InstaForex

 

 

Most Volatile Days of the Week

Additionally, some days of the week tend to be more volatile than others. In general, volatility in majors tend to be larger in the middle of the week and especially as concerns Tuesday and Wednesday. Furthermore Fridays are the weakest days as most Forex traders choose to close their positions towards the weekend.

 

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Find more: » Choosing Fx Pros | » Forex Trading Guide |  » Forex FAQ for Traders

 

Forex Trading Tips

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XM Review

Forex Broker Review: XM

XEMarkets

XM REVIEW

 

XM Company Info

XM ReviewCompany Name: XM is the Trading Name of Trading Point Financial Instruments Ltd

XM Regulation: XM is regulated by CySECMiFID

XM Foundation: XM was found in 2008

Online since: XM went online in 2009

US Clients: XM doesn't accept US Clients (NO)

Islamic Accounts: XM supports Islamic Accounts (YES)

XM Execution: STP (No Execution Delays and no Re-Quotes)

XM Customer Support:

XM 24/5 Customer ServiceXM PHONE SUPPORTXM LIVE CHAT

» Visit XM | » Rating

Read more: XM Review
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