Forex statistics you should learn

statistical data of research companies, analytical portal, and news agencies;

analytical reviews of central banks of the U.S., Asia and Europe, as well as analytical reports of institutional commercial banks;

quarterly reports of the Bank for International Settlements (BIS).

Over 170 currencies are available in the global Forex market. This, however, does not mean that you can buy any of them. The selection of trading assets is limited by the functionality of a broker. Most brokers offer a limited choice of 50-60 pairs, including crosses. For example, Roboforex offers only 36 currency pairs.

Over 200 trading instruments make up the free arsenal brokers offer to traders to improve their Forex trading results. These include technical analysis indicators, charting tools, scripts, expert advisors, newsfeeds, heat maps, pip value calculators, volatility calculators, correlation calculators, etc.

5.5% trading volume in the Forex market is the volume of private, retail traders. Other players, including commercial banks, central banks, investment funds and other legal entities, account for the remaining trading volume. This, however, does not mean that a private trader can be scammed by a market maker at any time, as many novice traders may mistakenly think. Market makers are interested in short-term speculations. Also, private traders may simply copy strategies of market makers (trend trading, breakout trading).

85% Forex traders use the MT4 trading platform, and MetaQuotes, the platform developer, does not like it much. The corporation is making an effort to transfer traders to MT5. Traders, however, do not see significant benefits in it and don’t want to rewrite the existing indicators, scripts and strategies in a new code. In January 2023, Apple Inc. removed MT4 and MT5 from the App Store, which caused the demand for cTrader, a mobile app of another popular platform, to rise.

15% traders earn profit. Brokers are obliged to notify users of this fact before account opening as per requirement of regulatory authorities. This does not mean that it is impossible to make money in the Forex market. The thing is that this statistical data is taken from analysis of monthly periods, and it basically indicates that either many traders are not willing to learn or they act emotionally, which leads to them quickly losing their money. These traders leave the market and the next ‘portion’ of beginners take their place. Only 15% traders who don’t give up and stay to learn and garner experience end up earning a profit.

27% traders are aged 18-34; 28% are aged 35-44, 21% are aged 45-54, 24% are older than 55 and 9% are older than 65.

Nearly 90% of traders are men. This is a surprising figure. Although women don’t dominate the field of active trading, 10% is a rather sad result.

31% traders are beginners, who have been working in the Forex market for less than 1 year. 39% traders have been trading in forex for 1-3 years, 23% - 4-9 years, and 7% - over 10 years. This means that two thirds of traders get quickly disappointed in trading and move elsewhere. A smaller share of traders change their profession over time due to life circumstances. Trading becomes a real profession with a career growth only for 7% traders.

10 million Forex traders in the world. You can often see this figure cited by analytical agencies. The question is how this figure was calculated. Many brokers claim they have 0.5 - 1 million traders as their clients. But then, the total number of traders should be way higher. It is possible that brokers count the number of opened accounts, including inactive ones. The 10-million figure takes into account active accounts.

3.2 million traders live in Asia. The Middle East is in second place and South America is in third place. The U.S. and North America are not among the leaders, as Forex trading is practically prohibited there for private traders. Forex statistics includes not only direct currency trading, but also Forex CFDs, and the CFDs are strictly controlled in the U.S.

72.87% is the share of the USD in the total trading volume. In the past three years, this indicator has slightly dropped. Last year, the USD share was around 88%. The U.S. dollar is gradually losing its share in the total trading volume, but still remains a confident leader. The order of other currencies hasn’t changed, only their share in the trading volume did. Compared to last year, investor interest towards the euro dropped, with traders switching to Japanese yen. The share of EUR dropped by 7.3% compared to previous year, and JPY share increased by 8.9%.

Currencies of developing economies account for 24.5% of all trades in Forex. This indicator is slowly but steadily increasing. This means that investors are gradually moving away from traditional trades in USD and EUR, as the currencies of developing countries can bring a bigger income due to higher volatility.

4.3% is the share of Chinese yuan in the total number of trades. Despite the fact that the Chinese economy is a closed one, some traders consider yuan as an alternative to the U.S. dollar, although the statistics include offshore yuan trading.

3.5% is the share of Hong Kong dollar. In the past year, its share increased by around 1.7%, which indicates that the interest of investors towards Asian markets is growing.

EUR/USD is the most popular currency pair. It accounts for around 28% of all trades in the Forex market. There are also crosses in the Top 10, but they are mostly used by professional traders.

80-90 pips is the average daily volatility of the EUR/USD pair. In terms of this indicator, the pair is somewhere in the middle. However, relatively high volatility does not scare novice traders away, as they still choose EUR/USD instead of more predictable and less volatile AUD/USD or USD/CHF.

GBP/NZD, EUR/CAD, EUR/NZD, GBP/AUD are the most volatile pairs among crosses. The average daily volatility of these pairs ranges within 170-230 pips. CAD/CHF and NZD/JPY are the crosses with relatively low volatility (lower than 80 pips). The higher the volatility, the more money you can make trading in both directions, but the more difficult it is to predict the price. Such pairs are more suitable for scalping, while the pairs with moderate volatility are good for trend trading strategies.

From 0 pips is the narrowest spread in forex. Spread is the difference between the sell and the buy price of the currency pair in pips. However, on ECN accounts of some brokers, the difference is so small it can be dismissed. Major pairs with high liquidity have the smallest spread, and the exotic pairs with high liquidity have the highest spread. At the time of news release, spread may increase due to disruption of the demand and supply balance.

Up to 1:3000 is the leverage offered by brokers. Leverage is the use of borrowed funds to increase the volume of trades. Leverage depends on the broker, chosen asset and regulator. Brokers with the license of a reputable regulator limit the leverage provided to novice traders to 1:20-1:50.

USA. The EUR/USD pair accounts for around 27% of the daily trading volume. USD/GBP is second with 13%, USD/JPY is third with 11%. The Canadian dollar is in fourth place.

UK. The EUR/USD pair accounts for 28% of the daily trading volume. The USD/GBP pair accounts for 13% of the trading volume, behind the USD/JPY pair, which accounts for 16% of the trading volume.

Australia. The USD/AUD pair accounts for around 47% of the daily trading volume; EUR/USD accounts for only 15% and USD/JPY is third with 10%.

Japan. 38.9% of trades are performed with the Japanese yen, and about the same percentage with the USD (38%). The euro accounts for only 9% of transactions.

There are over 21,600 cryptocurrencies listed on CoinMarketCap. Around 80% of them are potential scams or projects that are practically not supported by developers. The total market cap is USD 1 trillion at BTC price at around USD 20,000.

Forex brokers offer more than 30 cryptocurrency pairs as CFDs. In most cases, these are the popular coins, including ВТС, ЕТН, XRP, LTC, BCH in the pair with USD.

There are 43 million crypto traders in the world. This is four times more than currency traders. This figure, however, includes CFD traders, exchange traders and miners.

15.3 million traders in the U.S., 11.3 million traders in Europe. Asia has the highest number of miners, but U.S. exchange markets have derivative cryptocurrency products, which means that formally, the U.S. is the leader.

Lack of understanding of what trading is. Trading seems like an exciting game for beginners, where they can earn money within a few clicks based on mathematical probability. Beginners don’t know the fundamentals of trading, don’t understand what impacts prices and are not aware of the rules of risk management.

Lack of goals, action plans, strategies, i.e. lack of understanding of what a person wants to achieve and when. Where there is no algorithm of actions, there is no result.

Lack of mathematical skills. These skills are required for the calculation of pip value, stop orders or take profit orders. Novice traders think they can earn money on Forex quickly, the amount equal to at least average salary at another job. What they don’t take into account is the large deposit they must have for that and high risks. Here’s a small example: if the pip value for the EUR/USD pair is 10 cents at the minimum lot of 0.01, and the average volatility is 80, a trader will only earn USD 8 per day. That’s in an ideal world. The calculation is conditional, because positions can be opened in both directions. However, it does not include unprofitable trades and the fact that signals don’t appear every minute.

Lack of the desire to grow and develop. As soon as a novice trader realizes that Forex actually implies hard work, he/she gives up. Forex requires continuous development of skills, knowledge and experience: analysis of new strategies, testing of new instruments, monitoring fundamental news, communicating on forums, etc.

Lack of intelligence, perseverance, and emotion. How do you choose a reliable broker and not a scam? How do you calm down, when you’ve lost real money? What are your actions in the event of a force majeure? Many beginners don’t have answers to these questions.

Use a volatility calculator. Pairs with low volatility are more suitable for position and trend trading. Highly volatile pairs are good for scalping and high-risk strategies.

Evaluate fundamental factors. For example, the EUR/USD pair is harder to predict than the AUD/USD pair, because more factors impact the price of the former.

Exotic pairs are more suitable for long-term strategies due to low liquidity and lack of fundamental information.

Work on self-development. Reading theoretical materials and investment blogs is good, but gaining your own personal experience is important. Trading forums and development of your own trading strategies will help you in that.

Use a strategy tester. Testing a trading strategy on history and backtest analysis are keys to success. If the strategy deviates from the backtest results when used on a real account, stop trading and adjust your strategy.

Control your emotions. Emotions should not be the reason for changing the trading strategy and increasing the level of risk.

Forex lingo is unique. It has the entire animal world. In addition to bulls and bears, there are pigs, sheep, chicken, rabbits, stags and hamsters. And being a hamster is the worst.

In 2008, monkey Luceria randomly chose 8 stocks, creating an investment portfolio. Investors formed their own portfolio at the same time. In 9 years, the monkey’s portfolio grew 7.5 times, and investors’ portfolio – only 5.1 times.

Jonathan Lebed is the youngest scammer who made USD 800,000 in a span of six months at the age of 15. His scam was simple. Lebed bought penny stocks and posted messages on chat rooms encouraging people to buy them as well, pumping the prices. He was the first minor to be prosecuted by the SEC. Lebed and the SEC reached an out-of-court settlement thanks to his cooperation.

Eddie Lampert, an apprentice of Buffett, earned over USD 1 billion by 2019. In 2003, a classic situation happened to him. He was kidnapped. Lampert showed maximum restraint and composure, managing to persuade his captors to let him go for a USD 10,000 ransom. The kidnappers got caught almost immediately, trying to use Lampert’s credit card.

Curt Degerman lived for 40 years as a homeless man in Sweden, and he loved collecting cans and visiting libraries. After he passed at the age of 60, it turned out that he was worth USD 1.4 million in shares and gold.

Insiders often make money by learning about news earlier than other traders. Sometimes, however, they do make silly mistakes that go against the laws of physics. In 2013, the SEC investigated how orders were placed for CME 2 ms after the release of the news, if the signal transmission time was at least 7 ms.

In 2014, Facebook decided to acquire the Oculus VR startup. The value of Oculus VT shares immediately spiked by more than 150%. The company’s management suspended trading, announcing that it was not related to Facebook. Investors simply mixed up one letter.

Vishal Agrawal is one of few traders who became interested in trading at the age of 22, and at the age of 32 was hired by Standard Chartered Bank. His example is unique in that at the age of 20 Agrawal completely lost his sight.

38% of investors, who became millionaires, do not have a higher degree.

Professional trading is automated. Only private traders still open trades manually. HFT (high-frequency trading) systems and neural self-learning networks are used in the professional market. It is easy to manipulate the market, if you place orders for large amounts and then remove them before they are executed. This model is called spoofing.

Millionaire Joe Lewis who worked with George Soros and earned over USD 5 billion does not have a higher degree.

Hetty Green is an American businesswoman who was named by the Guinness Book of World Records as the “greatest miser”. Her desire to earn as much as possible turned into a mania. Her estate in 1916 amounted to around USD 4 billion.

Peter Lynch, the author of many books on trading and investing, is one of the leaders of the finance world, who increased capitalization of the investment fund he managed within a very short period of time. In 13 years, his fund grew from USD 18 million to USD 14 billion.

John Paulson is one of few traders who opened short positions on securities in 2008.

Timothy Sykes is the youngest millionaire in U.S. history, who earned his first million at the age of 20 by trading securities.

George Soros joined the world of investing only at the age of 26, earning his first billion after he turned 40.