FOREX MARKET

How many forex traders are there in the USA? – SF Weekly


Introduction

The Forex
market has been particularly active since the 1970s and in the USA, like in the
rest of the world, it has gained popularity over the past 40 years. Brokers
have developed easy to use, online trading platforms that have simplified the
process of trading and made it available from almost anywhere in the world.

 Who Trades Forex?

The forex
market has many players but also many types of players. Some of the major types
of institutions and traders in forex markets are:

Commercial and
Investment Banks

The
greatest volume of currency is traded in the interbank market, where banks
trade currency with each other and through electronic networks. Big banks
account for a large percentage of total currency volume trades and also facilitate
forex transactions for clients and conduct speculative trades from their own
trading desks.

Central
Banks

Central
banks, representing their nations’ governments, are important players in the
forex market and open market operations and interest rate policies of these
banks influence currency rates to a large extent.

A central bank fixes the price of its native currency on forex, which is the exchange rate by which its currency will trade in the open market.

You might like: Best US Forex Trading Brokers

Investment
Managers and Hedge Funds

Portfolio
managers, pooled funds and hedge funds make up the second-biggest collection of
players in the forex market next to banks and central banks. Investment
managers trade currencies for large accounts such as pension funds,
foundations, and endowments.

Multinational
Corporations

Firms
engaged in importing and exporting use forex transactions to pay for goods and
services and companies trade forex to hedge the risk associated with foreign
currency translations.

Individual
Investors

The volume
of forex trades made by retail investors started out low compared to financial
institutions and companies but is growing in popularity rapidly.

So, while
large financial institutions and banks may have been responsible for a
substantial portion of trading in the forex market, retail traders are getting
in the majority since modern technology has also made it accessible to a
broader base of customers.

It is much
easier to become a Forex trader today than 30 years ago. All you need to start
trading is internet access, the relevant software – which can usually be
downloaded for free, and a broker’s account.

Read more: Managing Your Risks when Forex Trading.

How many forex traders are there in the world?

The forex
market has become the world’s largest financial market, with the average daily
trading volume growing from around 1.2 trillion in 1995, to 5.1 trillion in
2016, to about 13.9 million online traders in 2021 according to The Modern
Trader study and research papers.

Considering
the 13.9 million online traders in 2021, this means that there are one trader
in every 561 people. Research also shows that traders are usually males between
25 and 50 years old.

Number of forex traders in the USA

Currently
there is estimated to be more than 2 170 500 individual forex traders in North
America. South America has about 868 200 individuals and Central America 484 745.

In Asia are over 4 630 400 traders and in Europe over 2 170 500 individuals, with a further 1 403 590 in the Middle East, 1 881 100 in Africa and 274 930 in Oceania.    

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