Over the last 5 years, global trading volume for the Foreign Exchange (FOREX) market has seen an unprecedented growth, leaping to a record daily volume of US$1.9 trillion (S$3.23 trillion)1. Little known to many retail investors, the FOREX market has been the largest financial market around. Its trading volume in a single day is equivalent to almost 3 months worth of trading volume on the NYSE.
The boost in the FOREX trading volume over the past years can be attributed mainly to the increased volatility in currencies prices; caused by the geopolitical instability of the Iraq war, global terrorism, fluctuations in the US Dollar, recent speculation on the revaluation of the Chinese Reminbi and the rapidly rising oil prices.
Globally, fund managers are beginning to include currencies as part of their investment portfolio. At the same time, more retail investors, spurred by the increased popularity of internet trading and the relatively poor performance of traditional investments, have also switched to FOREX trading. Many are beginning to re-ride on the 'currency wave' with added focus on currency trading as part of their investment plans.
Today, FOREX trading has evolved from its original historical role of a by-product from international trade into a distinct asset class of its own. With its large trading volume, supported by increased global interest, it provides infinite trading liquidity and flexibility to any FOREX trader.
Contrary to popular belief, the risk involved in currency trading is almost similar to many other investment products. With proper risk management strategies and good study of the market, FOREX trading can provide boundless opportunities for investors.
