The foreign exchange market, or more commonly known as the forex market, is the largest financial market in the world in terms of daily trading volume. It is a decentralized market where currencies are traded 24 hours a day, five days a week. With the advent of technology and the internet, the forex market has become accessible to more retail traders than ever before. But just how many forex traders are there in the world?
It is difficult to determine the exact number of forex traders in the world since there is no central registry or database for forex traders. However, some estimates can be made based on data from various sources. According to a report by the Bank for International Settlements (BIS), the forex market had an average daily turnover of $6.6 trillion in April 2019. This figure represents the total value of all currencies traded on that day. The report also states that the forex market has grown significantly over the years, with an average daily turnover of $5.1 trillion in April 2016.
Another source of data comes from forex brokers. Forex brokers are firms that provide retail traders with access to the forex market through their trading platforms. According to a report by Finance Magnates, the number of active forex traders in the world was around 10 million in 2019. This figure includes both retail and institutional traders. The report also states that the number of active forex traders has been growing steadily over the years, with an average annual growth rate of 9.6%.
The growth of forex trading can be attributed to several factors. Firstly, the forex market offers high liquidity, which means that traders can easily buy and sell currencies at any time without affecting the market price. Secondly, the forex market is accessible to traders from all over the world, allowing them to trade from the comfort of their own homes. Thirdly, the forex market offers high leverage, which allows traders to control large positions with a small amount of capital. However, high leverage also comes with high risk, and traders should exercise caution when using it.
In terms of geographic distribution, the largest forex trading centers in the world are London, New York, and Tokyo. These three cities account for the majority of forex trading activity, with London being the largest. According to a report by the Bank of England, the average daily turnover of the forex market in London was $2.8 trillion in April 2019. This figure represents 43% of the global forex market turnover.
In conclusion, the exact number of forex traders in the world is difficult to determine, but estimates suggest that there are around 10 million active traders. The forex market has grown significantly over the years, with an average daily turnover of $6.6 trillion in April 2019. The growth of forex trading can be attributed to several factors, including high liquidity, accessibility, and leverage. The largest forex trading centers in the world are London, New York, and Tokyo, with London being the largest. Regardless of the number of traders, it is important for anyone interested in forex trading to understand the risks involved and to develop a solid trading plan before entering the market.
