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The foreign exchange market (Forex, FX, or currency market) is a global, decentralized market for the trading of currencies.

In terms of volume of trading, it is by far the largest market in the world.

The foreign exchange market is unique because of the following characteristics:

  • Its huge trading volume representing the largest asset class in the world, leading to high liquidity
  • Its geographical dispersion
  • Its continuous operation: 24 hours a day except weekends
  • The variety of factors that affect exchange rates
  • The low margins of relative profit compared with other markets of fixed income
  • The use of leverage to enhance profit and loss margins and with respect to account size

As such, it has been referred to as the market closest to the ideal of perfect competition, notwithstanding currency intervention by central banks.

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Learning our Forex Trading Course you should now that according to the Bank for International Settlements,  the preliminary global results from the 2013 Triennial Central Bank Survey of Foreign Exchange and OTC Derivatives Markets Activity shows that trading in foreign exchange markets averaged $5.3 trillion per day in April 2013.

This is up from $4.0 trillion in April 2010 and $3.3 trillion in April 2007.

As you’ll learn in our Forex Trading Course, foreign exchange swaps were the most actively traded instruments in April 2013, at $2.2 trillion per day, followed by spot trading at $2.0 trillion.
According to the Bank for International Settlements,  as of April 2010, average daily turnover in global foreign exchange markets is estimated at $3.98 trillion, a growth of approximately 20% over the $3.21 trillion daily volume as of April 2007. Some firms specializing on foreign exchange market had put the average daily turnover in excess of US$4 trillion.

The $3.98 trillion break-down is as follows:

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  • $1.490 trillion in spot Forex trading  transactions
  • $475 billion in outright Forex trading forwards
  • $1.765 trillion in foreign exchange swaps
  • $43 billion currency swaps
  • $207 billion in options and other products

Forex Trading Course Starts now:

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