The global foreign exchange market is the biggest market in the world. The nearly USD 2 trillion daily turnover exceeds the combined turnover of the entire world''s stock and bond markets.
There are many reasons for the popularity of foreign exchange trading, but among the most important are, the high liquidity 24 hours a day and the very low dealing costs associated with trading. The market is so large that a handful of players can never influence its outcome
The foreign exchange (currency or forex or FX) market exists wherever one currency is traded for another. It is by far the largest financial market in the world, and includes trading between large banks, central banks, currency speculators, multinational corporations, governments, and other financial markets and institutions. The average daily trade in the global forex and related markets currently is over US$ 3 trillion. Retail traders (individuals) are a small fraction of this market and may only participate indirectly through brokers or banks, and are subject to forex scam.
Market size and liquidity
The foreign exchange market is unique because of
- its trading volume,
- the extreme liquidity of the market,
- the large number of, and variety of, traders in the market,
- its geographical dispersion,
- its long trading hours: 24 hours a day (except on weekends),
- the variety of factors that affect exchange rates.
- the low margins of profit compared with other markets of fixed income (but profits can be high due to very large trading volumes)