FX Volume FX Trading

Forex is the most liquid and heavily traded market on the planet, outstripping all other markets with an average trading volume of $7.51 trillion per day. Several factors contribute to this unrivaled turnover, starting with the fact the forex market is open 24 hours a day, 5 days a week. Additionally, currency pairs are traded over the counter, which means most transactions take place on electronic networks or over the telephone between brokers, banks, retail traders, and other market participants. Hundreds of currency pairs are traded on the forex market but only ten of them contribute significantly to the average turnover generated each day. The ten most traded pairs account for approximately 73% of the overall daily trading volume of the world’s most liquid market. Eight of these leading pairs involve the US dollar traded against other major currencies like the euro, the sterling, and the yen.

  • However, to be successful in forex trading, traders need to have access to accurate and reliable data, including volume data.
  • This trend continued in April 2024 when non-derivatives generated $998 billion in average daily turnover (up 24.1% from October 2023) and secured a 92% market share.
  • The latest survey results reveal the average daily trading volume of the global forex market hit an all-time high in April 2022 when it reached $7.51 trillion.
  • The platform is equally suitable for both beginners and experienced traders, making it the popular choice for 85% of Forex traders.
  • The Asian session is more suitable for flat strategies, while quieter periods during the New York and London sessions are suitable for trading strategies that require stable price movement.

When it comes to geographic distribution, some countries have a more concentrated percentage of Forex traders than others. According to data published by VT Markets, a global multi-asset CFD broker, Asia is the region with the highest number of online Forex traders, with 3.2 million Asian investors trading currency pairs. Europe and North America are also some of the bigger Forex trading markets in the world, with each of the two regions reporting 1.5 million traders. Africa and the Middle East also fall under the category of regions with a high number of Forex traders cryptocurrency broker canada while the least number of traders are based in Oceania. JPY/AUD average daily turnover rose from $24 billion in 2010 to $37 billion in 2022, while their percentage share decreased from 0.6% to 0.5%. The forex pair saw a moderate increase in volume but a slight dip in market share, indicating it’s not growing as fast as other pairs.

However, spot transactions achieved the strongest growth out of all instruments featured in the survey, rising by 17% (from $184.7 billion to $216.6 billion) during this period. If the volume is high during the day relative to the average daily volume, it is a sign that it is reversing its trend. Yet another trading service provider that experienced a significant boost of active monthly traders between May 2017 and May 2021 was eToro. Starting the period with about 69,000 monthly traders and gaining 2,436.4% up to 1.6 million monthly traders in May 2021. Meanwhile, some 15% of Forex traders reported making an actual profit from their trading.

Daily Trading Volume of Global Forex Market

USD/RMB remains the most traded pair with a 39.9% market share and $340.1 billion in average daily trading volume. However, daily trading volumes shrank by around 1.7% compared to April 2022 when turnover averaged $433 billion per day. The local forex market has regained traction as it witnessed a 5.6% increase in overall turnover in April 2024 when TFEMC reported a daily trading volume of $449.5 billion. Singapore’s forex market committee provides no detailed information about specific daily averages for pairs in its semi-annual survey. Data on monthly trading volumes is available instead, indicating that the USD/JPY was the most traded currency pair in October 2023 when its monthly turnover reached $4.78 trillion. As many as 58% of this total came from forex swaps, which remain the most popular vehicle for forex trading in Singapore.

The EUR/USD ranks as the most traded currency in the US for October 2023 when it recorded $215.3 billion in total turnover, with spot transactions making up 44% of this amount. The USD/JPY posted the second-highest daily trading volume of $127.3 billion from spots, forwards, options, and forex swaps. As for most traded currency pairs, the USD/EUR remained the pair with the highest trading volume in April 2022, accounting for 22.7% of the global Forex market turnover. The next several pairs that saw the biggest trading volumes in April 2022 were USD/JPY, USD/GBP, and USD/CNY. In 2022, the USD remained the currency with the highest impact on the global Forex market, being on one side of 88% of currency pairs traded in April 2022.

Budget Amount Traders Spend on Forex Trading

  • This information can then be used by forex traders to buy the currency they expect to increase in value or to sell the currency they believe will decrease in value.
  • BIS reported a 4% share of the global turnover for Forex options in 2022, a slight decline from 5% in 2019.
  • The daily trading volume of the US dollar against the yen spiked from $871 billion to a little over a trillion during this period.
  • Similarly, if the price is moving down, and the volume is increasing, it indicates that the trend is strong and likely to continue.
  • Please consider contacting a professional advisor if you require any financial assistance.

It becomes especially powerful when combined with key levels, candlestick patterns, and higher timeframe analysis. However, the quality and effectiveness of financial regulation can vary significantly between different mid-tier regulators, and forex traders should always conduct research before choosing a forex broker. As a retail investor, speculating on forex involves a very high risk of losing money due interactive brokers forex review to high leverage and volatile fx markets. According to the financial body of the UK, the Financial Conduct Authority (FCA), about 80% of retail fx traders lose money.

The Importance of Volume in Technical Analysis

As unimpressive as it seems, this figure marks a dramatic increase from 2001 when the trading volume of currency swaps was a negligible $7.2 billion. The most up-to-date statistics on the global forex market, including worldwide turnover, average daily turnover, the most commonly traded currency pairs, the largest brokers, and more. Derivatives like options and currency swaps accounted for $60 billion of the total daily turnover, representing a 7% share of the local forex market compared to 93% for non-derivatives. October 2023 results correspond to a 6% increase from the previous survey conducted in April.

Since the establishment of the Forex market, males have been the dominating gender participating in currency pair trading. While the numbers can differ depending on the region, we have data from a few major Forex brokers to support the statement that males are still the bigger group of active Forex traders. Forex datasets serve a variety of use cases, making them indispensable tools for traders, analysts, and financial institutions. One of the primary use cases is algorithmic trading, where real-time and historical data are used to build and refine automated trading strategies. They can avoid unwise decisions made in forex trades historically, which is recorded in forex databases. Instead, the data can increase the likelihood that they invest their money in assets that are more likely to be successful.

Forex volume data is an important indicator beaxy exchange review that helps traders to make informed trading decisions. Traders can get volume data from various sources, including forex brokers, forex data providers, and forex volume indicators. To use volume data effectively, traders need to understand how to interpret it and integrate it into their trading strategies. By using volume data, traders can improve their trading performance and achieve their financial goals.

FX and Interest Rate Turnover 2004 – 2022 (in trillions USD)

The top-performing pair generated over a quarter of a trillion US dollars in daily transaction volume in October 2023, most of which came from forex swap transactions. The island country ranks among China’s top trading partners and has become a major regional hub for renminbi transactions in recent years. Given all this, it is anything but shocking that the USD/RMB places second in monthly trading volume with $2.40 trillion in total as of October 2023.

Quality, executed trade volume data to enhance your trading models, support post-trade analysis and reporting and strengthen investment and research analysis. If the market price is changing rapidly, it can be an indicator of high trading volume. The trading volume is usually higher when there is a significant price fluctuation in the market. When a market is described as “active” it indicates that the trading volume will be higher, and if the market is described as  “inactive” it means that the trading volume will be lower. In trading, the volume is the amount of a particular asset traded over a period of time.

In terms of global forex trading, the United Kingdom is by far the largest foreign exchange trading centre, accounting for 38% of global turnover, followed by the US at 19%. Singapore has the third highest level of forex turnover with turnover rising from 8% in 2019 to 9% in 2022. Hong Kong SAR is the fourth highest but declined to 7% from 8%, while Japan fell from 5% to 4% and has the fifth highest forex turnover globally. While still the second most traded currency, the EUR has lost forex market share, sliding from a 39.0% share in 2010 to 30.5% in 2022, despite an increase in its OTC turnover amount. Artificial Intelligence (AI) plays a significant role in the development of the Forex industry. Traders can resort to a range of AI tools to evaluate markets, keep track of trends, and even perform orders.

These fluctuations not only highlight the pandemic’s role in driving trading activity but also pose questions about market dynamics in a post-pandemic world. After the collapse of the Bretton Woods system in 1973, floating exchange rates opened the door for modern-day forex trading. The Gold Standard and the Bretton Woods system worked to control global monetary policy and currency valuation. As Central Banks tightly regulated exchange rates, traders could not speculate on foreign currency movements. The Asian session is more suitable for flat strategies, while quieter periods during the New York and London sessions are suitable for trading strategies that require stable price movement.

With online brokers being a major contributor to the growth of the global Forex sector, we will take a look at leading trading companies that are currently dominating the Forex industry. To give you a better understanding of the scope of this sector and its exponential growth, we have compiled a list of key statistics that focus on the global Forex market. Forex data typically offers global coverage, with some datasets including over 240 countries. Coverage often includes major and minor currency pairs as well as regional currencies, ensuring relevance to diverse trading needs. Another use case for forex data is for general reporting on the foreign exchange by news outlets and financial journalists.

Daily Trading Volume by Currency Pair

The daily Forex turnover for 2022 was estimated to be $7.6 trillion, marking a massive growth, with forecasts showing an even bigger increase in the upcoming years. With trading calculators being some of the most popular tools with Forex traders, the one calculating currency pips has been used the most (94% of respondents). Other calculators that are widely used by traders help them convert different currencies, calculate their potential profit, and calculate the volatility.

The USD/HKD experienced the steepest decline, with its share falling by 0.9 percentage points from April 2019. A decrease was only observed in 2016 when trading in the forex market averaged $5.07 trillion, down 5.4% from the previous triennial survey when it stood at around $5.36 trillion. This was the first market shrinkage in 15 years, and some analysts ascribed it to the significant drop in spot forex transactions and the rising interest in derivative trading during this period. Ultimately, this leads to reduced trading risk and sharper insights into market dynamics, supporting your business and trading models. When it comes to the amount that Forex traders spend on their currency pair trades, it has been reported that most traders (63.75%) have limited their Forex trading expenses to less than 5% of their total budget.

The Australian session is the smallest of the key trading trading sessions, but still a significant session in the Pacific region. Average trading volume has been consistently rising during the past two decades, jumping by nearly 506% between 2001 and 2022. The biggest spike occurred in 2004 when currency trading jumped by over 56% from the previous three years.

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top