10 Cool Things You Didn’t Know About Foreign Exchange

Thinking about getting into trading forex? Then the process of understanding how the market works can sometimes seem quite confusing, not to mention boring. Buy! Sell! Fundamentals! Sentiment! You might be forgiven for putting your hands up in the air and forgetting the whole thing.

Fortunately though, it’s not all economic indicators and Chinese manufacturing output. Some of it’s actually quite interesting. To stimulate your appetite for forex then, find below 10 cool things you didn’t know about foreign exchange.

1. If you want to trade forex there and then, you use a spot contract. Spot contracts are called spot contracts because they happen on the spot!

2. Upbeat traders are called bulls, while pessimistic ones are known as bears. This is owing to how each animal attacks, because a bull strikes upward while a bear swipes downward.

3. More than $3.98 TRILLION are traded on the forex market each day. That’s about 53 times more than the New York stock exchange.

4. The GBPUSD currency pair is called cable. This is because – before global satellites – the London and New York stock exchanges were connected using a steel cable under the Atlantic.

5. Forex never sleeps. The market centres on New York, London, Tokyo and Sydney, depending on who’s awake at the time.

6. The profit speculators make depends on the liquidity in the market at the time. Hence it’s hard to win big during events like the Superbowl, because no one is trading!

7. In forex, a pipette isn’t something used in a lab. It’s one tenth of a pip, or the last digit on the euro value 1.17277.

8. Back in the mid-1990s, only banks and corporations that had $40-50m+ liquidity could trade on the forex market. The invention of the internet though means this is no longer the case.

9. The US dollar is king currency, included in 84.9% of foreign exchange trades.

10. Speculators make up almost 90.0% of the trading volume of the market.