I’ve read in babypips school that forex global trading volume is around 5 trillion dollars a day.
This is quit a number, but I wonder if it’s calculated based on leveraged amounts or “real” amounts
I mean, if it’s based on leveraged amounts, then it does make sense (let’s say global leverage used is 1:100, that mean 5 trillion of trading volume equals 50 billions $ a day of real money from retail traders)
Otherwise, if trading volume is based on real amounts, that would mean that brokers do secure 500 trillion dollars every day to make trading happen (based on 1:100 leverage), which is unbelievably crazy high
I know this may very well qualify as the most stupid question you’ll ever read, but since this is my 1st post and I’m just starting learning about forex, please bear with me!
The $5.3 trillion figure reported by the Bank for International Settlements (BIS) in their 2013 Triennial Central Bank Survey represents [B]un-leveraged currency transfers between reporting entities.[/B]
Essentially, central banks around the world determine the currency flow (which they call turnover) between and among major commercial banks in their respective countries, and between banks in their countries and banks in other countries.
These flows of money are un-leveraged —
[B]banks do not transact business with one another on margin.[/B]
These flows of money (turnover) are reported in the various currencies of the various countries reporting. Those figures are then converted to USD, in order for the BIS to report worldwide aggregate turnover figures.
The BIS reports three different turnover metrics — gross turnover, net-gross turnover, and net-net turnover. The smallest of these turnover figures, as measured in 2013, is the $5.3 trillion net-net turnover figure.
The Triennial Central Bank Survey, as its name implies, is conducted every three years. So, the four most recent Surveys were taken in 2004, 2007, 2010, and 2013. The next Survey will be conducted in April 2016, with a Preliminary Survey report released in September 2016, and the final Survey report in December 2016.
Until the September 2016 release, we will have only estimates of whether, and by how much, the worldwide foreign exchange market has grown.
If you want to study this subject, here is a link to the 2013 Triennial Central Bank Survey —
And here is a forum post explaining and summarizing that Survey —
As Clint said, the figures are un-leveraged. Assuming a global leverage of 1:100 is very misplaced. Don’t mix up the tiny retail market with the professional market. So to answer your question: No, it does not make sense. Keep studying and one day it/you will make much more sense. As long as you are willing to educate yourself you are on the right track.