Many potential investors wonder what sets forex trading apart from other investment options. Why does trading foreign currencies stand out so significantly from them all?
Unique Features of Forex Investment
Forex investment stands out for many different reasons, among which are:
Massive Trading Volume
When it comes to other markets, none can rival the Forex market’s unparalleled trading volume. Furthermore, its exceptional liquidity allows traders to buy or sell currencies without significant fluctuations on this platform.
Diverse Participants
The Forex market boasts the greatest diversity and volume of traders, operating around the clock except weekends.
Extended Trading Hours
Trading takes place throughout each trading session (24/7 except on weekends) while its Global Presence allows traders to trade from multiple trading locations worldwide – not only major US or European cities.
Highly Dynamic Environments
Different factors have the ability to influence foreign exchange markets at any moment in time, thus impacting exchange rates at any given time.
Impressive Turnover in Forex Trading
Forex trading’s impressive turnover makes it an appealing proposition, according to the Bank for International Settlements Triennial Central Bank Survey. Traditional Forex market average daily turnover has experienced significant expansion since 2004 – an astounding 64% jump!
Historical Turnover Data
In April 1989, the market size stood at $500 billion; two years later (April 1992), this had increased to $750 billion before again skyrocketing in 1995 to an astonishing $1.18 trillion (which later rose to an incredible $1.48 trillion by April 1998) before eventually reaching an all-time peak of $1.16 trillion by April 2001).
These figures demonstrate an upward trend in forex turnover and projected that daily turnover could hit $2-$3 trillion daily within 8-10 years due to global trader expansion and the automated Forex trading market.
The Rise of Automation in Forex Trading
Automation has quickly become an emerging trend in the Forex market, even among Interbank spot Forex dealers who may switch over to automated methods of trading. Automated forex trading provides several benefits which make it appealing for traders:
Instantaneous Transactions
Automation makes transactions instantaneous, providing traders with real-time transactions they cannot achieve with manual systems alone. Automated Forex systems boast significantly increased efficiency and speed compared to their manual counterparts; trades can occur within milliseconds for increased trading volume versus manual systems. They also help identify when repeat losses have taken place for any reason or another, helping traders detect when repeat losses have been taking place on multiple occasions.
Greater Diversification
Automated Forex trading enables greater diversification by simultaneously trading in different markets across time zones; you could, for instance, trade with Singapore or London traders even as midnight strikes in the US. Furthermore, this benefit offers multiple exchange model options so that you can evaluate short-term data and predict trends within shorter time frames of 15-30 minutes.
Increased Liquidity
Automation has helped expand the liquidity of the Forex market, making transactions smoother and quicker than before.
Effective Risk Management
Automated Forex trading provides an effective solution to risk management issues. International checks used for purchases on the Forex market can be coordinated using automated technology in order to minimize payment delays or non-payment risks from either side. While automated systems may present their own set of challenges, often these issues can be overcome through technological updates and updates.
Future Prospects of Automated Forex Trading
Automated Forex trading could bring us one step closer to an estimated daily turnover of $2-$3 trillion within four or five years, as its efficient trades across different time zones position this lucrative global business opportunity.
