The Forex market operates twenty-four hours a day with markets open across the world. The market continues to grow in popularity as technology has made it more accessible. Today, there are millions of traders operating in the market looking to maximise the opportunities that this incredibly lucrative and exciting market.
While, the general public has become increasingly aware of the Forex market in recent years, the market has been operating for centuries.
Here are some fun facts about the Forex market.
- Foreign exchange transactions are known to have occurred in ancient times. The Talmud records foreign currency transactions that date back to biblical times. Moneychangers operated stalls where they would exchange currency and take a commission for the service. Foreign exchange transactions are also recorded on ancient Egyptian papyri dating back to around 260 BC
- Prior to the emergence of satellite and fibre optic communications, a large transatlantic cable connected the London and New York stock markets. For this reason, the GBP/USD currency pair is known as the cable.
- The origin of the bears and bulls terms comes from the fact that a bear strikes its prey downwards while a bull does the opposite - striking upwards. Hence, traders who are bullish have an optimistic outlook about the market or a particular currency while traders who are bearish are pessimistic in their outlook.
- The US dollar dominates the Forex market with it featuring in around 80% of all Forex trades. That is an amazing number when you consider that more than $5 trillion is traded in a normal trading day.
- The vast majority of Forex trading is purely speculative in nature with 90% of Forex trading falling into that category.
- There was a time that Forex trading could only be conducted by banks and financial institutions that held at least $40 million in liquid funds. Those days are distant memories as trading can now be conducted by individual traders with far less liquid funds.
- Spot trading takes its name from the action - as an immediate exchange of currencies is done on the spot.
- The term PIP is one of those commonly used but confusing Forex terms that is easily explained. In most cases, the PIP refers to the fifth decimal place of a currency price (in some cases it is the fourth decimal place)
- Despite the US dollar dominating the Forex market, Wall Street is not the Forex capital of the world. That distinction falls to the London Stock Exchange. Perhaps surprisingly, the UK market handles just over 40% of the Forex market, while the US market handles just 19% of the overall market.
- While the exchange floor is traditionally thought of as the trading place, today most Forex trades are done using the convenience of the internet.
These are just some of the facts about the world of Forex trading. If you would like to know more about Forex or are contemplating entering the market there is o better platform than USGFX. USGFX offer ongoing education and training as well as up to date information about the Forex market that will help you to make informed and responsible trading decisions.