For many, it’s preferable to trade on the Forex market, and there are a number of reasons why. The scale of the market and its incredible liquidity open up opportunities for a tremendous volume of transactions not only for retail investors, but also institutional investors and companies.
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Key market metrics
The Forex market has continued to grow strongly over the past several decades. Daily Forex trading turnover rose from $5.1 trillion in 2016 to $6.6 trillion in April 2019, and continues to grow. Even Covid restrictions and geopolitical instability have not hindered the market’s volume growth.
This means that the Forex market’s annual trade turnover is estimated at a whopping $2.4 quadrillion. For comparison, global GDP in 2019 amounted to roughly $142 trillion — 17 times smaller than the Forex market.
According to various studies that have analyzed the Forex market’s growth potential, its CAGR (compound annual growth rate) will be 7.30% to 8.87% until 2026 through 2027. According to IMARC Group, the global Forex market reached a value of $702 billion in 2021, and expects the market to reach $1.1 trillion by 2027. According to an analysis by Technavio, the foreign exchange market size is expected to grow by $1.94 trillion from 2021 to 2026 at a CAGR of 8.87%. It is believed that almost 50% of the market’s growth will originate from North America during the forecasted period.
Interesting facts about the Forex market
Before the cryptocurrency market’s inception, Forex was the only financial market in the world to operate 24 hours a day. It includes over 170 different currencies, but the most important currency remains the United States dollar. It accounts for about 88% of all Forex trades, while the euro accounts for 32.3% of trades. Seven major currency pairs make up 68% of all traded pairs in the Forex market’s trading volume, and the most important among them is 
EUR/USD.
The share of retail traders in 2020 was only 5.5% of the market. Nevertheless, this share continues to grow, ensuring the growth of the market and its metrics. Trading applications are becoming more accessible and easier to use, so it’s possible that the Forex market will soon become more diversified. All in all, approximately 10 million people in the world today are trading on Forex. Of those, 3.2 million are in Asia, 1.5 million in Europe and North America, 1.3 million traders are located in Africa, almost 1 million are in the Middle East and 600,000 in South America. Central America has around 335,000 traders, while Oceania has 190,000. But for now, it’s a bank market.
According to the 2019 FX survey, the top five banks control 40% of the market:
| Rank | Counterparty | Market share 2019 |
|---|---|---|
| 1 | JPMorgan | 9.81% |
| 2 | Deutsche Bank | 8.41% |
| 3 | Citi | 7.87% |
| 4 | XTX Markets | 7.22% |
| 5 | UBS | 6.63% |
Conclusion
The Forex market is one of the largest by size, and by trading volume, it’s the largest market on the planet. That’s why it is so popular among 10 million traders. On Olymp Trade, you can trade using fixed time trades and FX mechanics.
Trade the world’s most liquid market while enjoying a secure trading environment and our platform’s many tools and features!
Go trade ForexRisk warning: The contents of this article do not constitute investment advice, and you bear sole responsibility for your trading activity and/or trading results.
