Forex Market Size and Structure
The Forex market does not have a “rooftop structure” (a single supervising body and trading limitations). It is the world’s most popular and most traded market, consisting of private groups, small and medium-sized traders, commercial and public companies, banks, and governments. Trading is electronic and online and takes place simultaneously around the globe, 24 hours a day. The most traded currency is the US dollar. It accounts for a bit more than 85% of the total traded currencies around the world. This is followed by the Euro with almost 40% and the Yen with 18%. We are at more than 140%. Confused? Remember that the total percentage of Forex is 200%. Why? The market is composed of pairs with 2 currencies in each trade. The US has the world’s largest and most stable economy, which is why the US Dollar constitutes 62% of the total currency reserves worldwide. Other instruments we should note as we progress are those of the developing markets, such as Brazil, Turkey, and Eastern European republics. Look at the distribution of currencies in the Forex market (total = 200%!) 