The forex market is immensely popular across the globe, primarily because it offers ample opportunities for earning attractive profits. It is one of those markets that never sleeps, i.e. the forex market is always operating in one or the other part of the world. As one of the largest and decentralized markets in the world, the forex market has grown by leaps and bounds in the past couple of years. Much of this growth and transformation have occurred due to the advent of technology. While, many of the above facts are already known to you, below find ten fun facts about the forex industry.
10 Fun Facts about the Forex Market
1. Forex trading has been around since ancient times. Talmudic writings or the Biblical period mentions about the first currency transaction that was carried out during the old era. Money changers would help people change their currency while deducting a specific amount as their commission.
2. By the year 1913, around half of the global forex transactions were carried out using the sterling (pound). This allowed the United Kingdom to change the shape of its capital, wherein the total foreign banking institutions operating within London went up from three (in 1860) to seventy-one by the year 1913.
3. In the forex market, traders are categorized as bulls or traders who optimistic about the market and believe that it will rise or bears, i.e. traders who are pessimistic about the market. These categories have been created by the fact that a bull strikes upwards and a bear swipes downwards.
4. The forex market is regarded as a highly liquid market globally. The market witnesses high volumes of trading, which is over 5 trillion dollars/day. Apart from this, the USD is one of the widely traded forex currencies, and it features in almost 80% of all the trades.
5. Nearly 90 percent of forex trades are speculative in nature.
6. There was a time when forex trading was carried out only by the banks and institutions that had a minimum of $40 million-$60 million of liquid funds. Today, people with limited funds at their disposal can also engage in forex trading.
7. Immediate exchange of currencies is called spot trading, since the exchange takes place “on the spot.”
8. Most of the traders are of the impression that the US is the center of all forex trading activities. However, in reality, 41 percent of all the forex transactions take place in the United Kingdom, while only 19 percent occurs in the United States. Hence, it is the London Stock Exchange, which is regarded as the hub for forex trading.
9. The forex market does not have any centralized bank. In fact, the value/price of the currencies float, and the makers of the market set the rate of exchange.
10. The forex market never experienced any crisis situation. Economic downturns or crisis offer an ideal opportunity to the traders, as they can make money in both falling and rising economic conditions.
So, those were some of the fascinating facts about the forex market that indicates that forex trading is indeed fun and profitable.