Are you intrigued by Forex trading and want to know some interesting facts about this lucrative market. If yes, we will reveal to you some things most people don’t have a clue about when it comes to Forex.
Old as the international market itself
The Forex market draws its origins from the early 70s. That was the time when the USA enabled its national currency to float freely. However, in a broader sense, the currency market has been around as long as international commerce itself. Just two decades ago, the forex market was only for the initiated and seasoned traders.
US dollar – the most traded currency
The greenback currency is on top of the list when it comes to the trading volumes. Mind that 80 percent of all trades are made in American dollars. However, it’s not the strongest one on the market. There are other currencies such as the Kuwaiti dinar of Bahraini dinar with the reputation of the strongest currencies. It’s so popular due to the economic dynamism but also the stability of the US economy.
London is the biggest currency trading hub in the world
Despite the dominance of the Us dollar, the biggest currency trading hub is London. That’s the place where the Reuters market data system is located. This system integrates, manages and transfers financial data from many sources. Besides London, there are three other hubs, and those are New York and Tokyo.
Today Forex trading is available to everyone
Still, with the development of the internet, electronic trading and retail brokers, barriers have been broken. It gives us many possibilities to experiment with those at the top of the ladder and tickle them a bit with our little means. Forex trading in 2020 is available to anyone wishing to start a trading career.
You can trade on Forex all around the clock
Another appealing side of Forex is that you can do it from almost any location and it’s open 24 hours a day excluding the weekends.
There is no miracle strategy
Unfortunately, there is no such thing as a foolproof method. Many newbies enter the market looking for a way to generate profits from home and without effort easily. While it is possible to perform very well in the currency market, there is no easy way to make money in the financial markets, like the goose that lays the golden eggs does not exist.
It’s a decentralized market
Unlike stocks or futures, you don’t need to go through a centralized office like the New York Stock Exchange with a single price. Regarding the Forex market, there is no single price for any given currency, which means quotes can vary from broker to broker.
There are so many opportunities to make profit
You might feel overwhelmed at first, but this is what makes the Forex market so attractive and so scary at the same time! The market is so big and the competition between brokers so cruel that you get the best deal almost every time. And who doesn’t want that?
The FX scale goes from interbank to retail Forex traders
The Forex market is not chaotic when it comes to the hierarchy. Its stakeholders can be classified according to a value scale. At the top of the Forex ladder is the interbank market. It is made up of the world’s largest banks as well as smaller ones, with its participants interacting directly with each other electronically through Electronic Brokerage Services (EBS) or Reuters Dealing 3000-Spot Matching.
The Forex market is largely speculative
It’s normal since trading instruments such as currency pairs are very volatile. The fluctuation in the value of currencies is the foundation of forex trading. The traders buying and selling decisions are often made based on speculations and their future expectations.