Why Forex Trading is growing

[Vichu]

It might come as a surprise that foreign exchange is not a 'relatively' new means of trading. Currency trading is mentioned in Jewish Talmudic writing and only become more formalised in the 17th century with the establishment of the first forex market in Amsterdam. The creation of this trade market meant currency exchange rates could be more easily and freely traded.
Nowadays, forex is traded more than any other asset class. According to Bank for International Settlement, forex markets averaged USD$5.1 trillion per day in April 2016, a sum that far exceeds the USD$200 billion traded on the stock market each day. In 2018. the Australian forex broker market turned over USD$114.4 billion.


Personal trading only formed a small proportion of these forex trading volumes however it has been growing exponentially since 1996 when online trading platforms first became available. In 2016, retail forex trading made up to 5.5% of the forex market with USD$282 billion of daily trading turnover, a significant increase on the 2% or USD$60 billion per day in 2006.
With growth like this, the retail market looks set to continue to grow future. We look at some of the reasons why retail forex trading is growing.


Regulatory acceptance, compliance and legitimacy

Forex trading’s decentralised nature historically meant investors were vulnerable forex fraud from untrustworthy brokers. Nowadays, forex brokers must comply with regulatory requirements of the country they are trading in. Such regulatory assurance gives retail traders confidence their investments are secure.
Regulation also has the effect of giving legitimacy to forex as an asset class for long term investment.


Technology

Faster, more accessible and reliable technology means easy access to trading tools and trading at convenience. Many trading platforms are available that can be accessed anywhere there is internet connection and mobile, tablet or web browser.
Good brokers are also prioritising best in class technology for best trading experience. Pepperstone’s Edge technology for example offers blazing execution speeds thanks to 10 optical fibre cross connects. Faster execution helps reduce the risk of slippage when trading.
Efforts of online brokers to promote forex

Online forex broking is a competitive business so forex brokers are looking for means convince you to trade through them.
Brokers will promote difference features such as:

• low spreads
• high leverage
• risk management tools
• free forex trading education
• demo accounts

Transparency in spreads

Electronic trading means elimination of dealing desks. This transparency means traders can save on costs through low spreads set by the market and not have to worry about price manipulation.
No dealing desk brokers such as Pepperstone are motivated to offer low spreads as they earn their profits through volume and lower spreads means higher volume of sales.
24 hours a day trading

Unlike other asset classes, you can trade forex 24 hours a day due to its global nature.
The advent of electronic trading means you can trade at any time as there will always be a counter party willing to trade with you somewhere in the world.
Easy customer-on-boarding

Sign on process with brokers is straight-forward and you can commence trading with as little as AUD $100.
Some brokers don't even require a deposit to open an account.

[Sameeh]

The above features of forex made the traders join forex to trade and makes money and so the trader will find good conditions for trading and making of money, the trader find that forex can be traded from home or anywhere and so there is no specific time to trade as he can trade anytime during the day in the working days of the market, the trader also can join the market with small investment and this makes that situation is suitable for many people around the world to join forex and work with it, forex is an easy business to work with and this makes the people attract to forex in the hope to make good income and achieve what they want and so they can be able to live better and make the life more easy.

[maby81]

The market is growing because it offers various advantages. It is open 24/7, accessible easily and there are no exorbitant fees to see to. It is something anyone can try doing, and you can start with small investments and increase over time. For this reason it is appealing to many traders or anyone who wishes to make some extra money. There are many tools that can be used which can help in analysis and evaluation, and considering eveyrthing as long as you do your best and devote time and attention to it, you can do well in forex trading. The key is not to take it lightly as it is important to become knowledgeable to make good decisions wiht regards to money and risk management as well.

[Katrina]

Compared with any other financial markets, the forex market possess the largest number of market participants. This offers the highest level of liquidity, which means even large orders of currency trades coudl be easily filled efficiently without any greater price deviations.