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These are the results of the 38th Survey of North American Foreign Exchange Volume by the Foreign Exchange Committee.
The FX Volume Survey 2023 by the Foreign Exchange Committee at a glance:
■ Average daily volume was down from the October 2022 survey in all categories (spot, swap, and OTC options by 10.6%, 1.9%, and 19.4%, respectively) except for forward transactions which increased by 3.2%.
■ Turnover declined across all counterparty types: volumes reported by “Reporting Dealers” were down 7.1%, volumes by “Other Dealers” were down 9.8%, volumes by “Other Financial Customers” were down 2.6%, and volumes by “Nonfinancial Customers” were down 2.4% since October 2022.
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Expert Advisors (EAs) Comparison Table
Automated strategies based on Expert Advisors (EAs) analyze the market 24/7 and create, modify, and close trading orders. The algorithms of these systems can spot trading opportunities based on market data (price, volatility, volume, etc.). EAs also incorporate money management modules for position sizing, spread/slippage control, and risk management. An Expert Advisor is codded in specific languages, according to the trading platform that it will be used. For example, if the platform is the MT4 then the programming language is MQL4 and if the platform is MetaTrader5 then the programming language is MQL5.
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The Foreign Exchange Market, or Forex, or FX market, is a the largest and most liquid financial market in the world with daily volumes of $4 trillion. These are some basic facts and tips for those planning to trade Forex currencies.
The Short History of the Foreign Exchange Market
The Forex Market began during the 1970s after 30 years of government restrictions regarding foreign exchange transactions. The significant event that started the Forex market was the end of the Bretton Woods Agreement. The Bretton Woods Agreement became the global monetary system at the end of WW2 and for the next 30 years. Under the Bretton Woods System, all major currencies were pegged to the US dollar, and gold reserves were accepted as the basis for the US dollar. in the early 1970s, President Nixon announced that the United States would no longer exchange gold for US dollars. The floating-rate system became the new standard for the world.
The Forex market was born as major countries gradually switched from fixed currency rates (Bretton Woods) to floating exchange rates.
Today, there are three (3) exchange rate systems:
(1) Floating rate –Demand and supply determines the exchange rate {dominant system)
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BASIC CONCEPTS AND RULES OF RISK MANAGEMENT
Risk management is maybe the most important component of long-term trading success. This tutorial contains some basic concepts and rules of effective risk management.
Diversification and the 25-2% Rule
Diversification is the holy grail of financial investing. The rewards of diversifying positions in investing are far greater than an average trader can even think.
What means Diversification?
Diversification means simply not putting all your eggs in the same basket. In other words, become more diverse by mixing a wide variety of investments in the same portfolio.
The 25-2% Rule
The first percentage (25%) refers to the asset class, and the second (2%) to the individual asset, therefore:
(i) Don’t invest more than 25% of your portfolio in the same asset class (i.e. stocks, precious metals, Forex currencies, bonds, etc.)
(ii) Don’t invest more than 2% of your portfolio in a single trade position (i.e. a particular stock, a Forex pair, etc.).
Professional traders may apply strategies never risking more than 0.5% per trade.
Controlling the Capital Leverage
High trading-leverage results in:
(i) Increased Profit Potential
(ii) Increased Loss Potential
(iii) Increased Trade Cost
If we consider (i) and (ii) as equals, then the trader has to pay constantly a higher trading cost. If you trade intraday by applying 100:1 trading-leverage, there is a 95% probability that you will lose the entire account in 2-3 months. Professional traders avoid using more than 5:1 trading-leverage.
Forex Trade Signal Reviews
A Forex signal provider is a professional trader or a team of professional traders that offer a suggestion for entering a trade. This suggestion includes a specific price and time, and usually a stop-loss, and a take-profit order. The trading signal is provided to subscribers of the forex signaling service. This is what is included in a trading signal:
(1) The specific price and time to open a position
(2) The direction of the market
(3) A stop-loss order and a take-profit order
(4) The price level at which traders should move their stop-orders to lock their profits
