Forex trading has become increasingly popular in recent years due to the accessibility and potential profitability of the market. One of the most common trading strategies is going long, which involves buying a currency with the expectation that its value will increase over time. But how many people actually go long forex?
It is difficult to determine an exact number of individuals who go long forex as the market is decentralized, meaning there is no central exchange or regulator keeping track of all participants. However, there are several indicators that can provide insight into the prevalence of long positions in the forex market.
Firstly, the daily trading volume of the forex market gives an indication of the number of traders participating in the market. According to the Bank for International Settlements (BIS), the average daily trading volume of the global forex market was $6.6 trillion in 2019. This suggests that there are millions of traders involved in the market each day, many of whom may be going long on various currency pairs.
Secondly, data from forex brokers can provide insight into the trading habits of their clients. For example, a report from forex broker FXCM in 2020 found that 75% of their retail clients’ trades were long positions, indicating that a majority of their clients were bullish on the market. However, it is important to note that this data only represents a portion of the overall forex market and may not be representative of the broader trading population.
Another factor to consider is the prevalence of long positions in specific currency pairs. For example, the EUR/USD pair is one of the most heavily traded in the forex market and is often used as a barometer for the overall sentiment of traders. In 2020, data from the Commodity Futures Trading Commission (CFTC) showed that non-commercial traders (such as hedge funds and large speculators) held net long positions in the EUR/USD pair for most of the year, indicating a bullish sentiment towards the euro.
Overall, while it is difficult to determine an exact number of individuals who go long forex, there are several indicators that suggest it is a popular trading strategy. The high daily trading volume of the forex market, coupled with data from forex brokers and specific currency pairs, all suggest that many traders are bullish on the market and are taking long positions in various currencies. However, it is important to remember that forex trading carries significant risk and traders should always conduct thorough research and analysis before making any trading decisions.
