With the internet and the development of various proprietary software, numerous interested traders around the globe can now take part in the Forex market.

Currencies that are commonly traded include the Japanese Yen, US Dollar, Euro, Swiss Franc, Canadian Dollar, British Pound and Australian Dollar. They are also called by trader as the majors and account for more than 85 percent of the daily Forex transactions. It is a standard procedure that currencies are traded in pairs. For example, the Japanese Yen is paired with the US Dollar, the Euro with the English Pound. Forex does not involve any central exchange unlike other financial markets which trade in a specific location.

Instead, several trading centers around the world exist notably in London, Tokyo, Singapore, New York and Hong Kong. Some 5, trading institutions are involved in Forex such as international banks, commercial companies, government banks and brokers for the various types of foreign currency exchange. Complete Forex trading is done electronically either via the telephone or the internet.

Online trading over the internet is now the most popular form of Forex trading today. This technology is an advantage because apart from the convenience it provides, it has also lowered transaction costs.

Another benefit is its transparency attributed to the development of online trading platform. The foreign exchange market is dynamic and will remain so. It is also stable despite the sudden falls it experiences every now and then.

This is because when the value of one currency falls, what happens is the value of the other currency normally rises. High liquidity is another advantage of the Forex market. Compared to the New York Stock Exchange, the daily trading volume in the Forex market is estimated to be 50 times more. Additionally, there will always be traders taking part in the buying and selling of foreign currencies resulting in extreme liquidity and price stability.

List of Online Forex Brokers. The reality is that 80 percent of trades are purely speculative based on the opinions expressed by people on economic and political situations. Only 20 percent of the market facilitates the exchange of various currencies specifically for multinational firms that regularly trade currencies. These are the Euro-US Dollar, US Dollar-Japanese Yen, British Pound-US Dollar, US Dollar-Swiss Franc which comprise the four majors and the Australian Dollar-US Dollar, US Dollar-Canadian Dollar and New Zealand Dollar-US Dollar which are the three commodity pairs.

Every currency has a value in relation to other existing currencies and this value fluctuates every now and then. With currency trading, big quantities of currency are being purchased and sold thereby creating movements in the value and enabling profit.

Additionally, people need to purchase foreign currency which they will need to use in spending or investing abroad. When investors feel that a certain currency will be strong or weak, they will buy or sell according to this feeling.

Previously, the Forex market only had big multinational companies, financial institutions and hedge funds as major players. However, with the advancement of technologies in the recent years, the market has provided opportunities to all types of investors. Compared to other equity trading such as the stock exchange and futures, currency trading has far more benefits. Firstly, the spreads of foreign exchange are very low which translates to a low cost to the trader.

Another important aspect that investors need to know is that no commissions can be gained from the Forex market. These derivatives have their own unique characteristics that make them different from stocks, bonds and other traditional investment products. A futures contract or simply futures is a standardized and tradable contract which involves the delivery of the underlying asset at a specific price and at a specified future date.

The future date is referred as the delivery or final settlement date while the pre-set price is known as the futures price. Futures are different from options in that buying a futures contract gives a trader the obligation to buy the underlying asset. Different futures markets also exist in specific underlying commodity markets such as the foreign exchange, money market, bond market, equity index market and soft commodities market.

Futures were first introduced as an insurance mechanism for farmers and manufacturers who wanted to set a fixed price for crops at a future date. The contracts on financial instruments, however, were introduced in the s courtesy of the Chicago Mercantile Exchange CME. As they were highly successful basing on trading volume and accessibility to global markets, these instruments eventually overtook commodities futures. This development resulted in the introduction of a wide range of new futures exchanges around the world.

These include the London International Financial Futures Exchange introduced in as well as the Deutsche Terminborse and the Tokyo Commodity Exchange. Some major advantages of futures are its leverage, lower initial outlay, and profit from rising and falling markets, flexibility, transparency, variety and lower transaction fees. Since then, they have been used to improve trade involving agricultural produce, imports and manufactured products.

An option enables a trader to buy or sell the underlying asset without the need to buy any obligation. The right to buy an underlying asset is known as a call option while the right to sell is referred as a put option. An option contract stipulates the price at which you can buy or sell the underlying asset, also called the strike price and the expiry date.

In Indian markets, for instance, they have a fixed expiry date which is the last Thursday of every month. American options can be exercised at any time before the expiry day while the European can only be exercised at the expiry date. It is, therefore, best for traders not to be always complacent even when using the most advanced trading systems.

Additionally, extensive research and analysis from various sources are vital before making a final decision. See the List of Online Brokers to trade Stocks. A managed futures account, run by a professional money manager known as a Commodity Trading Advisor CTA , offers exposure to a wide array of financial and physical commodity futures markets traded around the world. There are hundreds of OTC forex brokers that you can trade currencies online with. The majority of them will offer a great selection of major, minor and exotic currency pairs.

Below you can see a selection of our best OTC forex brokers. If you are looking to trade forex online by yourself, then you will need an OTC forex broker. Over the counter markets have registered exponential growth over the past two decades to the point that, in many cases, they exceed organized markets in volume of transactions.

At first, only large funds and financial institutions participated in them, but now, thanks to the development of new technologies, anyone can access these markets through forex brokers.

Richard Montana Richard has many years of experience in broker research, testing, analysis and reviews. He knows what to look for through years of trading himself with different brokers and listening to the feedback of others.

For all of our broker reviews, we research, validate, analyse and compare what we deem to be the most important factors to consider when choosing a broker.

This includes pros, cons and an overall rating based on our findings. We aim to help you find the best broker according to your own needs. You can read more about our review process. Forex trading in the United Arab Emirates is very popular, with many forex brokers accepting…. Buying and selling currencies is popular amongst residents of Singapore who are looking to speculate….

Forex trading is very popular in Indonesia. Whilst using a broker regulated by the Financial…. Currency trading is popular in France, especially for those who want to speculate on falling….

Home Guides Over-the-counter OTC Forex Brokers. Over-the-counter OTC Forex Brokers Richard Montana November 2, Table of Contents. ADGM FRSA, ASIC, BVIFSC, CBI, FFAJ, FSCA, IIROC, JFSA. Review Trade Trade. Worldwide interest in Forex trading saw an increase over COVID peaking in May Since the hights of COVID and lockdowns the popularity has reduced slightly as show on the table below.

In , over , Australians executed one or more FX or CFD transactions. After Australia, the next largest countries in terms of the number of active trades are Germany 84, and Poland 80, In , 61,00 Australians had an FX account that is active, in and this grew to between 75, and 79, While COVID lockdowns can explain the large jump inactive CFD and FX accounts jumped in to ,, the latest numbers is still an increase of 40, since The standards set by the Australian financial regulator known as The Australian Securities and Investments Commission ASIC means that the Australian financial market is one of the most tightly regulated in the world.

In their brand health has been consistent with the UK attracting the highest number of searches on Google.

The main source of interest from the top 8 locations is within the United Kingdom where Australia where the broker originated from now only accounts for 6. The majority of the statistics referenced in this article are sourced from the Bank of International Settlements BIS Triennial Central Bank Survey The survey conducted by BIS is the largest global analysis of financial markets focusing on Forex and Over the Counter OTC derivatives.

We use cookies to ensure you get the best experience on our website. By continuing to browse you accept our use of cookies. Brokers By Country Australian Forex Brokers UK Forex Brokers European Forex Brokers NZ Forex Brokers Canadian Forex Brokers US Forex Brokers Singapore Forex Brokers UAE Forex Brokers.

Lowest Spread Forex Brokers Lowest Commission Brokers High Leverage Forex Brokers Islamic Forex Brokers Crypto CFD Brokers Forex Demo Account ASIC Regulated Brokers CySEC Regulated Brokers.

MetaTrader 4 Brokers MetaTrader 5 Brokers Spread Betting Platforms UK CFD Trading Platforms Automated Trading Software Scalping Trading Software Beginner Forex Trading Platforms Micro Currency Platforms. Pepperstone Review IC Markets Review FP Markets Review CMC Markets Plus Review eToro Review IG Review FXCM Review. Home » Forex Trading » Forex Trading Industry Statistics.

Written by Justin Grossbard Written by Justin Grossbard Co Founder. Fact Checked We double-check broker fee details each month which is made possible through partner paid advertising. Learn more this here. Forex is the only financial market in the world to operate 24 hours a day. The forex market comprises over different currencies. Female forex traders tend to outperform male traders by 1. In the USA, there are , active spot FX accounts across the 5 leading brokers at end of Q2, After the USA, Australia has the largest number of active fx accounts , which is up 40, in 4 years IC Markets is the biggest Australian retail forex broker.

Since , over 6, different cryptocurrencies have been released. Largest Forex Trading Centres Country Share of Global OTC Forex Turnover 1. United Kingdom United States Singapore 7.

Hong Kong 7. Japan 4. Switzerland 3.

Most of us trading in the forex market know that transactions happen over the counter, but generally we are so engrossed in getting our individual trade right that we have very little patience to understand the mechanics of the market and how trade happens in the Over the Counter format. You might be feeling how does it matter as long as my profits are in place? Well, I would say that overlooking the inherent structure of any market might eat into your profits too.

The structure of the forex market is a crucial element that can help you design your trading day and help you strategize better. The way in which the currency pairs are traded in the forex market is the most important element that goes on to make the basics of the currency market globally.

This is crucial as it has a direct bearing on the participants who get into this trade, the regulations governing them as well as the overall size of the forex market. So what do you understand when it is said that price action in the forex market is conducted over the counter? I am sure all of you understand what over the counter drugs are. You can simply walk to the drug store, ask for these OTC medicines without any specific prescription or medical history. The same theory applies here.

Trading in the forex market is not channelized via any centralized exchange like you have in equity trade. All the different types of forex products that traders or investors trade in is always via market medium or a market maker. This is commonly a bank or a forex brokerage firm that helps in facilitating your desired trade and help you in buying and selling specific quotes from customers and taking orders from them.

Unlike an exchange traded transaction, where the exchange is the trading counter-party, the brokerage firm or the bank that is enabling the trade becomes the counter-party. As the market place is not regulated strictly by any single governing body, prices are market determined, and there is generally heavy competition and prices keep varying as per the market forces.

There is no standardized pricing, and the demand and supply dynamics keep on interfering with the live prices. Execution too varies as per demand. Well, this might be the first question that comes to your mind that while the stock markets function equally efficiently, they have set exchanges for conducting trade, be it the NYSE or the Nasdaq.

So how is this OTC trade different and why do you need such a decentralized system for the forex market? For that first and foremost, we must understand the dynamics of the forex market. It is a global forum providing trading platform to traders across the world in one go. Needless to mention then that the volumes and the liquidity levels in the forex market are huge compared to any equity market.

Now compare this to the combined volume of equity markets across the world. Thus, the essential construct of this market ensures that a more free flowing system with higher degree of efficiency is required. This is where the OTC trading concept comes to play. As trade is global, regulations of any specific country or any centralized authority does not dictate the dynamics of trade.

Unlike equity market, transaction cost is lower as this system has also alleviated the need for any fees for exchange and clearing. Trade as I mentioned is solely by the electronic medium hence the efficiencies are way higher despite a significantly lower cost.

Another advantage of the forex market over stocks is the direct dealing between traders and the market makers like the banks. There is absolutely no need for any middle man. Trade is also not time bound by any geographical or other limitation. The OTC spot forex market is a hour trading profit nearing machine. Traders can access the market anytime they want and tweak their trades in accordance to developing economic and geopolitical changes globally.

Not just that you can execute your trade from the comfort of your bedroom. Everything is via the electronic medium and a strong global trading network. So unlike a stock market trader, you do not have to give up everything to trade in the forex market.

You can even double up as a stock market as well as a forex market player. In your free time or in between breaks from the stock markets, you could easily dabble in the Over The Counter forex market. Speed is another hallmark of the Over The Counter Trade.

While order submissions and order executions could be time-consuming, the OTC trade in forex market ensures that all transactions are quick, easy to execute and instantly applicable. Depending on the market condition you can exit and enter at will. Some of the key products used for trading via Over The Counter transaction in the forex market include:.

There can be various other permutation and combinations of these while the actual trade is executed but essentially these constitute the primary ingredients of the OTC forex market broth. Well, after the products, it is about the players. Right at the top we have the top money dealers including,. The next sub-group of the leading forex market players using the OTC channel includes both financial as well as retail participants. Even hedge funds, pension funds, MFs and other high networth investors have a significant stake in the final OTC forex market pie.

To draw to a close, the OTC forex market is expanding by leap sand bounds. The efficiency and the free flowing structure is what attract maximum traders to it. Must mention that ease of use is another big thumbs up. I don't believe in luck. I believe in sweat. The more you sweat, the luckier you get. Skip to content Most of us trading in the forex market know that transactions happen over the counter, but generally we are so engrossed in getting our individual trade right that we have very little patience to understand the mechanics of the market and how trade happens in the Over the Counter format.

What Is Over The Counter Trading? Before you read the rest of this article, submit your email, not to miss the messages that nobody can afford to miss:. By The LuckScout Team I don't believe in luck.

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We aim to help you find the best broker according to your own needs. Interested in a futures investment, but want a professional to do the trading for you? An OTC forex broker provides trading of assets that are not available on a centralised exchange. So unlike a stock market trader, you do not have to give up everything to trade in the forex market. Technically this means that every retail FX broker can be considered an over-the-counter broker, due to the nature of online retail forex trading.

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