The forex market is not only one of the biggest entities of its type in the world, but it’s also one of the fastest-growing.
As a result of this, an estimated $6.6 trillion is now traded globally on the foreign exchange every single day, with this number likely to increase incrementally year-on-year.
This rise has also been borne out by successful firms such as Tickmill, whose most recent financial report for 2019 showcased solid growth across all key metrics followed by a 150% jump in its year-on-year revenue for Q1 2020.
But what has underpinned the continued success of forex, and why should you care as an aspiring trader?
The Rise and Rise of Forex – What do You Need to Know?
Of course, forex has always been appealing to some as a result of its core attributes, including its derivative nature and the access that it affords traders to increased leverage.
This has proved to be increasingly important in the current socio-economic climate, however, with the coronavirus pandemic having created higher levels of market volatility and more extravagant price movements for traders to capitalise on.
The reason for this is simple; as many countries have responded to the crisis by introducing quantitative easing measures and slashing their base interest rate to zero (or just above). This has the impact of reducing the respective currency value, as foreign investment stalls and capital inflows dwindle as a result.
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Thanks to this and the aforementioned nature of the marketplace, traders have been able to hedge against specific currencies and profit even in a depreciating market, or at least sanctuary in the relative safety of either the USD or the Japanese Yen.
Of course, the greenback has lost at least some of its lustre as it has continued to contain its own number of Covid-19 cases at a domestic level, particularly with a proposed $2.2 trillion stimulus package being discussed by Congress.
Why Else is Forex Trading so Popular in 2020?
While recent forex growth has been pronounced, there’s no doubt that this trend has been prevalent to one degree or another for some time.
This sustained growth has been built on a number of factors, which exist outside of the market’s innate attributes and inherent flexibility.
For example, the rise of online and mobile brokerages has broken down many barriers to entry that once surrounded the forex market, making currency trading more accessible and viable than ever before.
These platforms also provide a comprehensive one-stop shop for both aspiring and experienced traders across an array of markets, who can now access everything from detailed insights and analytical tools to a wealth of technical indicators in real-time.
With a vast array of assets and markets now also available through this type of brokerage site, it’s also easier than ever to diversify and create a balanced portfolio that offers sustained value over time.
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