Which country trades forex the most

Beginner Questions
1

Hi, can anyone help me in my research, I am trying to find out which country trades Forex the most i.e. which nationality is the most active in their Forex trading.
Hope someone can help.

Many thanks
CharlieB

2

I don’t see the point of racial profiling people.

We are traders. Nuff said.

3

According to me it may be US or UK.

4

Based on population numbers and posting activity it would likely be the US. But based on per capita and visibility in posting it would probably be Australia. It seems Aussies are everywhere on these boards and as loud as Americans.

5

Trading in the United Kingdom accounted for 36.7% of the total, making it by far the most important center for foreign exchange trading. Trading in the United States accounted for 17.9%, and Japan accounted for 6.2%.

6

Thank you very much for your replies.

Charlie

7

Interesting.
Where can one obtain those figures?

O.

8

Sorry, I should of put the source. Wikipedia.

9

This breakdown might be of some help - with links to detailed data: The Most Traded Currency Pairs

10

Here’s a longer list of countries, and their share of worldwide foreign exhange trading.

This data comes from the Bank for International Settlements (BIS) 2010 Triennial Central Bank Survey (the lastest figures available):

United Kingdom — 37%
United States — 18%
Japan — 6%
Switzerland — 5%
Singapore — 5%
Hong Kong — 5%
Australia — 4%
France — 3%
Denmark — 2%

all other countries — each 1% or less

Note that these figures (taken from Table B.8 of the Triennial Survey) are rounded to whole percentages.

The figures shown in Table B.8 pertain to total turnover in all segments of the foreign exchange market.

Be aware that the foreign exchange market comprises much more than just retail spot forex (our little corner of the overall market). Careful study of the BIS Triennial Survey will reveal the relative sizes of the various market segments, and provide you with a wealth of information for your research.

I have attached a .pdf of the Survey, below.

This thread might also help you.

BIS Triennial Survey 2010.pdf (560 KB)

11

Thanks for the really helpful information, I’ve been trawling the net for days without success

Many thanks
Charlie

12

Hello.

I’ve read Clint’s information provided and either I’m ‘dumb’ or I’m ‘dumb’.

Put it another way:

I make the assumption that the thread starter MEANT to ask ‘which country has the most Retail SPOT FOREX Traders’???

If I’m wrong: then my apologies. And if I’m wrong: then I have two questions myself.

1 - Which country has the most RETAIL Spot FOREX Traders BY SHEER NUMBERS???

and

2 - Which country has the most RETAIL Spot FOREX Traders BY VALUE TRADED???

Do you think it possible to glean that information from that document???

My personal ‘guesstimation’ would be the USA first and the UK second (although I never thought about Australia but that has now been mentioned).

Regards,

Dale.

13

Here’s a link to a May 2010 post on this topic. Be aware that the 2010 Triennial Survey had not yet been issued at that time, so all the figures given regarding the size of the overall foreign exchange market, and the sizes of various sectors of that market, were three-year-old data at that point (being based on the 2007 Survey).

Nevertheless, some of the info in that post is still useful. The link I gave in that post to the Michael Greenberg article in [I]Forex Magnates[/I] is worth clicking on. [I]Forex Magnates[/I] has always been an excellent and reliable source of information, in my experience.

The following paragraph from the Greenberg article is fascinating, because of what it says about the presence of retail spot forex trading in Japan:

First and foremost I removed Gaitame – Japan’s largest broker from the list mainly because Japanese Forex market is by far the biggest forex market in the world and deserves its own survey. This however is almost impossible as Japanese brokers don’t tend to report their monthly stats officially or unofficially. I did get hold of a very detailed Japanese volumes survey however it is now a bit outdated and in any case those volume results are no longer relevant as Japanese FSA slashed forex leverage to 1:50 last year and would further slash it to 1:25 later this year. All I can say is that FXCM Japan used to be much bigger than FXCM US however this too probably changed when leverage was reduced.

Michael Greenberg — who doesn’t make rash or careless statements — says flatly that Japan is the largest (retail) forex market in the world. I can’t confirm or refute his claim. But, coming from Michael, it carries a lot of weight, in my opinion.

Also, the New York Times article about Japanese housewives trading spot forex is old, but still amusing.

14

Thanks Clint.

I really do appreciate. I’m trying to find out this information on a ‘need to know’ basis as opposed to ‘would like to know’ basis (and, well, I don’t know if you believe in co-incidence, but this thread just happened to have been started by somebody else at or around the same time as I started looking myself)!!! Odd.

Thanks again.

Regards,

Dale.

15

Okay, now I’m a bit confused:

  • personally I would have guessed the US to be the biggest participant in forex trading, due to sheer numbers and the larger amount of money coming with those numbers (despite the Government’s tireless efforts to destroy the US retail forex market);
  • the info presented above suggested the UK to have the largest share;
  • Clint’s latest contribution places Japan at the top.

… now, who’s right?

lol, that article about Japanese homemakers is hilarious:
‘Ms. Torii is one of Japan’s most famous housewife-traders. She has written a book on her investing strategies and founded a support group for home traders, the [I]FX Beauties Club[/I], which now has 40 members.’ …
… 'The housewife-traders were so secretive that many market analysts did not realize how widespread the trend had become until this summer, when the police arrested a Tokyo housewife accused of failing to pay $1.1 million in taxes on her foreign exchange earnings.'
Japanese women kick a$$! One calls her forex chat/support group ‘FX Beauties Club’ (lmao) and another one made enough in a year to have to pay more than a million bucks in taxes … after having washed the dishes and having tucked the kids in. :o

Cheers,
O.

16

Hi Dale, yes that was what I meant. FX Beauties Club lol :60:

Charlie

17

Oliver, here’s a quick overview of the worldwide foreign exchange market, who the major players are, and where we (retail spot forex traders) rank in the overall scheme of things.

All the dollar-amounts quoted below are what the BIS refers to as “turnover”, and they are the so-called “net-net” figures. Dollar-amounts and percentages have been rounded for convenience. Fasten your seat-belt.

Total (worldwide) foreign exchange market turnover is 4 trillion USD per day ($4,000,000,000,000. per DAY).

The foreign exchange market consists of the SPOT FOREX market and several classes of foreign exchange derivatives.

Spot forex accounts for 1.5 trillion USD per day. This is 37.5% of total daily foreign exchange turnover worldwide.

The spot forex market consists of two major segments: retail spot forex (our corner of the market), and institutional spot forex (where fx hedge funds and other heavy-hitters play).

The BIS does not require the world’s central banks to break down their figures into retail spot forex and institutional spot forex, so this break-down can only be estimated. That’s what my correspondence with Michael King at the BIS was all about: how to do such an estimate.

The consensus among authorities qualified to estimate these things is that retail spot forex is between 8% and 10% of total spot forex turnover. I have arbitrarily adopted 9% as the figure I will use to make some additional calculations.

Using my 9% figure for retail spot forex (and, obviously, 91% for institutional spot forex), I have estimated that worldwide retail spot forex turnover is 135 billion USD per day ($135,000,000,000 per day), that is, 9% of 1.5 trillion USD per day. If this estimate is reasonable, then the institutional segment of the spot forex market is obviously 1.365 trillion USD per day.

Then, I used Michael King’s estimates of the average size of a single retail spot forex trade ($50,000 notional value), and the average size of a single institutional spot forex trade ($2,000,000 notional value) to calculate how many trades of each class are made, on average, per day. Refer to the table which I posted previously for these figures.

Back to the overall foreign exchange market. The BIS divides up the aggregate dollar-amounts mentioned above in various ways: by country, by currency, by currency pair, etc. What they don’t do is tell us how the individual segments of the overall market divide up. When they tell us, for instance, that Japan represents 6% (round figure) of the total foreign exchange market, they don’t tell us whether Japan also represents 6% of retail spot forex, 6% of institutional spot forex, 6% of currency swaps transactions, etc.

Most of the time, it’s fine to assume that, if a particular country accounts for x% of total foreign exchange activity, then that country probably accounts for x% of retail spot forex trading, as well. But, this is, nevertheless, a big assumption.

Michael Greenberg, at [I]Forex Magnates,[/I] tells us that in the case of Japan, in particular, their participation in retail spot forex is way out of proportion to their country’s participation in the overall foreign exchange market. Specifically, he says that more [B]retail spot forex[/B] trading occurs in Japan, than in any other country.

So, let’s run some HYPOTHETICAL numbers, and see whether this could possibly be true.

The U.K. (by far, the largest participant in the [B]overall foreign exchange market[/B]) accounts for 37% of total worldwide foreign exchange turnover, according to the BIS. Let’s assume that the U.K. also accounts for 37% of worldwide retail spot forex trading — that means that retail spot forex trading in the U.K. totals 49.95 billion USD per day. Let’s call it 50 billion.

Now, let’s assume that retail spot forex trading in Japan exceeds this U.K. figure. Let’s say Japan does 100 billion USD per day in retail spot forex turnover. We know from the BIS that Japan is 6% of the total foreign exchange market, which means 6% of 4 trillion USD, which equals 240 billion USD per day.

If Japan does 240 billion per day total, and, of that, 100 billion per day is retail spot forex volume, then almost 42% of Japan’s total foreign exchange market participation is concentrated in retail spot forex. That’s a surprising percentage, but not impossible.

Apparently, Japan does not readily share the internals of their foreign exchange trading activity, making it hard to confirm these estimates. Which brings us back to Michael Greenberg’s claims about the size of the Japanese retail spot forex market. I haven’t seen any of Michael’s data — but, I believe him to be reliable.

So, there you have it:

Total worldwide foreign exchange turnover — 4 trillion/day.

Spot forex turnover — 1.5 trillion/day (37.5% of the total market).

Retail spot forex turnover — 135 billion/day (9% of spot forex, and 3.4% of the total market).

U.K. foreign exchange market turnover — 1.48 trillion/day (37% of the total market).

U.K. retail spot forex turnover — ASSUMED TO BE: 50 billion/day (37% of 9% of 1.5 trillion/day)

Japanese foreign exchange market turnover — 240 billion/day (6% of the total market).

Japanese retail spot forex turnover — HYPOTHETICALLY GUESS-TIMATED TO BE: 100 billion/day.

Estimates based on estimates can get very dicey, very quickly. But, sometimes, that’s all we have.

18

Superbly helpful and comprehensive info Clint, as always. Thank you.

19

Well: I have to ‘second the motion’.

Thanks Clint. That is VERY insightful and interesting information. VERY.

Thanks again. You went to a LOT of trouble there.

So THERE YOU HAVE IT CharlieB!!! Now you KNOW who to ask: to ask on your behalf!!! LOL!!!

I’ll tell you though: I’m REAL surprised it’s not the USA that is ‘top of the pops’. Then again AM I???

Let me ask ANOTHER question Clint: is this type of information available for Equities and Commodities (for example)??? And whether it is or isn’t would YOU ‘guesstimate’ that the USA IS INDEED ‘top of the pops’ in both the NUMBER of traders as well as the VALUE traded???

Another question (sorry for ‘hopping around’): WHY the UK (aside from Japan) ANYWAY (FOREX)???

Regards,

Dale.

20

Why the UK? London is the financial capital of the world, despite what the stupid presenters on CNBC like to say! Plus time wise, we are positioned perfectly for when the far east closes and then when the US opens.