This article describes some of the contributing factors which led to the remarkable growth of the forex market.
Forex Trading Centers, Products and Volume
Presently, almost two thirds of all forex trading activity can be seen in just three principal trading centers. In order of overall importance and forex trading volume, these centers consist of London, New York and Tokyo.
Every business day, the forex market has been estimated to have a turnover of over $5.5 trillion. This makes the forex market the largest financial market on the planet.
The currencies with the most trading activity in these financial centers include the U.S. Dollar, the Euro, the Japanese Yen and the British Pound Sterling. Less active currencies traded include the Swiss Franc, the Australian Dollar, the Canadian Dollar and the New Zealand Dollar.
A list of forex products broken down by daily trading volume follows:
Growth of the Forex Market Increases Dramatically
The forex market has been growing more or less continuously ever since exchange rates began to float in the early 1970s. This can be seen by reviewing the increase in daily market turnover which was estimated for the following years as follows
Growth Factors in the Forex Market
Some of the most influential factors in the growth of the forex market seen over recent years include:
Basically, the forex market offers many advantages for both individual and institutional traders alike, and the increasing recognition of this fact has led to its substantial growth in recent years.
What are the Best Hours to Trade Forex Market?
Forex market is known for its endless reservoir of profits and this is mainly because of the extremely flexible business hours and deep market liquidity. You can capitalize on both bullish or bearish trends, given that you are in the right place at the right time. You, as a trader, can open positions anytime you want but there are certain time slots that are much more preferable than others.
Before we get into a detailed discussion on the best hours to make profits, it will be better if you were aware of the following basics regarding Forex market.
There are three main trading sessions which constitute actual Forex market trading hours:
Now that you are familiar with the basics, you must be wondering what the phrase ‘best time’ actually means. The main characteristic of the Forex market is its volatility or its ability to swing to extremes in a given period of time. Sometimes the shifts are so drastic than a moment’s profit can turn into loss the next moment. This volatility ensures that the possibility of making profits stays but you must understand that when the market is stagnant, so is the possibility of making any profit.
It always depends on the specific trading strategy, but for strategies based on strong market moves (volatility), it is usually the best to trade when multiple sessions overlap.
This does not mean that you cannot function beyond the time slots mentioned; it simply means that these are the hours with the highest expected volatility (except the time when important economic news and indicators are released).
If you don’t want your trade period to extend beyond the day, you should open your position at the volatile hours and because of the fluctuations, you can have a chance to close it in a profit before the day ends.
Although, it is true that higher risk entails a higher reward, it can sometimes work the opposite way too. If Forex market opens an opportunity to make endless profits, it can cause fast losses as well. You must always be careful, cautious and follow the time-tested forex trading rules and money management techniques.
Related education and FX know-how:
Forex Education - Basics:
Forex Education - FX Brokers:
Forex Education - Technical Analysis: