• The Size of Forex Market

    It is quite surprising that a big market like forex does not have a central location. Forex is an online website which runs 24/7, this is why it is also commonly referred to as over the counter market. It is widely recognized despite only having electronic presence. Your current location does not matter, as long as you have an internet connation, you can trade on forex.
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    Numerous organizations and a great number of people trade the forex market on a daily basis which makes it the most widely used online market. The traders use this platform and find the counterpart they want to trade with on the basis of their authenticity and by analyzing costs. The most commonly traded currencies are shown in the following figure.  


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    The dollar is the most traded currency, taking up 84.9% of all transactions. The euro’s share is second at 39.1%, while that of the yen is third at 19.0%. As you can see, most of the major currencies are hogging the top spots on this list!

    The Dollar Rules in the Forex Market

    The USD is often the topic of discussion. It is worth noticing that the USD is the most widely traded currency and is a part of almost every major currency pair.

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    As USD is extensively used by banks, investors and organizations, it can be accounted for over 60% of the foreign exchange refunds in the world.

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    • One of the biggest economies in the world is that of the US.
    • The reserve currency of the world is the United States dollar.
    • US is one of the highly liquid markets worldwide.
    • There is an established political system in the US.
    • A high number of international transactions use the United States dollar as their medium of exchange.

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    Speculation in the Forex Market
    Currency trading, for the most part, relies on speculation, despite the fact that trading volume also comprises of financial and commercial transactions. Intrady price movements provide the basis for buying and selling that trader involves in, this trading is accounted for most of the trading volume.  The traders can be accounted for as much as over 85% of the total trading volume. The liquidity is quite high as implied by the scale of the forex market.

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    This way, people find it quite easy to trade on forex. Liquidity is one of the most important factors that the trader considers. Liquidity dictates the fluctuations is price that can take place in a certain time period. Traders can enjoy a highly liquid marketplace without having to worry about extra costs. However, in some cases, the time of the day and currency pair can influence the liquidity.

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