Top Three Reasons why Forex is Unique

By: Justin Stewart

When most people think of investments, and trading those investments to try and turn a profit, they think of the stock market. They think of buying and trading stocks on the market to hopefully end up with more money at the end of the day than they started with. Other people jump into foreign trading markets to try to have the upper edge, breaking into new and unknown foreign markets. What many people do not realize, however, is that forex trading, otherwise known as foreign exchange trading, is a great way to try to make money on your investments. Forex trading is a huge, foreign currency trade that is unique in multiple ways. Large Banks, Central Banks, Governments, and other entities and institutions trade currency from endless amounts of counties. While there are a large amount of reasons that forex is unique, there are three top reasons why forex is a unique way to try to increase investments.

Trading Volume

Forex trading is unlike any other type of trading or investment simply because of the massive amount of turnover that the market will see on any given day. The daily turnover for the forex market is over $3 trillion. Yes, that means that over $3 trillion dollars moves on the market every single day. This number has moved up as the years go by, and is reaching $3.25 trillion a day at a fairly rapid rate.

Number & Variety of Traders and Currency

Another major unique feature of forex trading is simply the number and variety of those trading on the forex market. Because the market is broken up into tiers (instead of a wide market making everything available for everyone), the entire forex market features a vast variety of traders and counties. Of the top 10 currency traders, however, 5 are from the United States and 3 are from the United Kingdom. The top trader in the forex system is Deutsche Bank from Germany.

The forex market also has a mass amount of currency that is being traded daily. The United States Dollar is the top currency traded daily, followed by the Euro, the Japanese Yen, the British Pound, and the Swiss Franc. Rounding out the top ten is the Australian Dollar, the Canadian Dollar, the Swedish Krona, the Hong Kong Dollar, and the Norwegian Krone. These ten currencies control the major portion of the traded currencies in the forex market.

24 Hour a Day trading

Another incredibly unique aspect of trading on the forex market is the fact that you have the ability to trade 24 hours a day. There are the three major markets (The US, Europe, and Asia), and at any given time there is at least one market open. Because of the wide array of markets and times, the market is technically trading and moving 24 hours a day. The markets are not going as crazy on the weekends, however, as the 24 hour trading only takes place during the weekdays.

Foreign Exchange
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