How Much Is the Turnover of the Forex Market Per Day? 

The most readily available criterion for evaluating any market is its turnover. How much is made in Forex market? How much is transferred through that market? When it comes to the forex market, anyone who is active in the world of finance knows about its glowing records with respect to daily turnover and trading volume. 

In fact the turnover or trading volume of the forex market is indeed one of its most important features and what makes this market truly stand out from others. So in this article we want to discuss this aspect of the forex market to see how much its daily turnover is and what implications it has for traders. 

You should read: What is the metaverse? The most comprehensive article about Metaverse virtual worlds 

How Much Is the Daily Turnover or Trading Volume of Forex? 

So as we briefly mentioned in the intro, when it comes to daily turnover, the forex market is somewhat of a unique market in the whole world. This is because the foreign exchange market has the highest trading volume in the world of all the financial markets. 

The daily trading volume or turnover of forex can reach as high as 8 trillion dollars, which is simply stupendous. Compare that with the entire cap of the crypto market which is around $2.5 trillion. Let that sink in! 

Of course it is not every day that this figure is reached by forex traders in this market. But an average for the turnover of the forex market per day would be something around $7 to $8 trillion. 

This makes the foreign exchange or forex market, as we said, the market with the highest trading volume in the world. This has some truly amazing implications for this market and makes it proper for certain approaches to trading and investment. This is also going to be the subject of our discussion. 

But first, let’s see why the forex market is able to reach such amazingly high numbers on a daily basis. 

You should read: What is meant by account liquidation? Examining the concept of liquidation

Why Does Forex Have the Highest Turnover of Any Market? 

The big question to ask here is why this market in particular has such a high trading volume with all these countless other financial markets in the world, like the stock market, commodities, crypto market, real estate market, just to name a few. 

There are several reasons for this phenomenon. Let’s discuss three of them: 

1. The forex market is completely decentralized. There is no single and centralized entity in charge of the forex market. This market is made from tons of trading terminals or trading sessions from the world which together form the entirety of the forex market. This means there is much less regulation that would get in the way of people entering this market. It also means in order to access this market you do not have to have special docs and residency in a special country. Wherever you are in the world, as long as you have access to the internet, you can begin trading in the forex market. As simple as that. 
2. The second reason for the astoundingly high daily turnover that the forex market is able to record is also related to the decentralized nature of this market. Again due to the fact that the forex market is decentralized, it means this market has basically no time limits. Because this market is made from different, decentralized trading sessions from all over the world, there is very little time limit seen in this market, such that basically you don’t have this much freedom with regard to time in any other market. The forex market is often referred to as the market that never sleeps, and this is because this market is active 24 hours a day 5 days a week. It is only off during the weekend, which is Saturday and Sunday. For traders, this is a huge advantage. You do not have to keep up with any schedule to trade in this market. 
3. The third reason for why the forex market has such a high daily turnover is the fact that it has such a high number of market participants. It is only individual traders who are active in this market. In fact individual traders make up the smallest share of market activity in terms of traded volume. There are much bigger participants, such as banks, institutions, companies, hedge funds, etc. that bring in big money and thus drive the trading volume upwards. 

You should read: How Does Burnout Occur in a Trader? 

Implications of Forex Trading Volume or Turnover for Traders 

So what does it mean for you as a trader if the forex market has the highest daily turnover in the world? Well, when a market exhibits such high numbers of trading volume, this means there is also a much higher degree of liquidity. 

One of the first implications of higher liquidity is that you can pull out much easily. This is especially important if you compare this to some other markets. 

For instance, the crypto market has a much lower liquidity compared to the forex market. This means it is much harder for you to cash out and withdraw because there are fewer buyers and sellers. But this is never the case in the forex market. with countless buyers and sellers, you will never have to think about liquidation. 

Additionally, a higher liquidity and trading volume has important implications for the process of trading itself. This impacts certain strategies and how they work. For instance, high liquidity and trading volume make up for almost the perfect conditions for executing scalping in the forex market. 

You should read: Training on making a trading strategy in TradingView? 

Conclusion 

With around an average of $8 trillion traded on a daily basis, the forex market has the highest daily turnover compared to all the other financial markets in the world. In this article we discussed all the different aspects of this extremely high trading volume and turnover and also the different implications that it has for traders. We also talked about why the forex market has this high turnover.