The rise of retail foreign exchange

The rise of retail foreign exchange

Written by: PaxForex analytics dept - Sunday, 12 May 2013 0 comments

While forex used to be the domain of large financial institutions and super-wealthy individuals, people can now get involved with as little as a few hundred dollars in capital. Investing in forex used to be the exclusive preserve of an elite group of hedge funds, investment banks and multinational corporations. For individual investors the FX market has been effectively off-limits; there were a lot of complex legal documents to sign before a bank would consider trading with you.


All this has changed over the past ten years thanks to the advent and growth of the internet and online trading systems – which give ordinary investors direct access to the currency markets. Now it is possible for the retail investment community to easily and quickly trade on the international forex markets from any internet capable computer. The decentralized nature of the market makes it easier for individuals to get started in trading with a number of providers connecting people around the world directly with the market.

The foreign exchange market includes average daily transactions of roughly US $5 trillion. This makes forex the largest market in the world by far, the most liquid and international in scope. While the retail arm of the forex giant is difficult to define measure estimates range from 5 to 10 percent of the overall currency market. While this number might seem insignificant it continues to grow each and every day.

Importantly individuals can also now obtain all the data they need to trade forex at negligible costs and are able to trade at similar speed as banks and hedge funds using this platform. They are able to get streaming real-time executable prices and access to up to the minute research to help ensure they have sufficient information they need to make an educated and sound investment decision.

While the retail arm of the forex market has enjoyed massive growth over its relatively short life span, declining volatility and increasing market regulation have led to reduced growth in some countries over the last couple of years. According to current information provided by many forex broker companies and banks retail currency trading is still growing, but probably more in Asia and outside of the United States.