The Forex industry is a place where the money is exchanged and where a person like you can make money.
The way that money is made on the Forex has several ways and I will list them here.
How large is the Forex industry and how can you be a part of that industry will be explained here.
What is Forex Industry
Forex industry is like any other industry you have encountered in your life. It is a place where the money is exchanging hands by providing some kind of service.
On one side there are providers of the service, like brokers or companies providing education and on the other side there are customers that want to participate on the Forex.
From the service provider side, like brokers and education sites, their job is to offer the best service to introduce the Forex industry to retail traders.
Retail traders are people like you and me who want to start making money on the Forex.
Forex Industry Rules
Industry like Forex have certain rules that must be respected in order to provide the best service to their customers.
The rules that clearly define does the provider comply with Forex industry rules and are monitored by the regulator body in countries where the provider operates.
Rules contain protection measures for customers so the customer does not lose his money. Losing money can happen if the provider is a SCAM and takes the money from the customer without notice.
Rules are there to protect the investment of the customer in a way where they state they can cover some amount if the money is lost by the broker house or service provider.
Any regulated broker must follow Forex industry rules if he wants to offer services to the customers. Some of those rules are not mandatory but they increase the chance of attracting larger numbers of customers.
Industry Rules That are not Mandatory
If the broker or educational site wants to attract more customers they can offer some kind of bonus. Bonus can be like bonus material in PDF format, extra education without fees and so on.
Most service providers in the Forex industry offer education because it is the most important thing. Education is offered through webinars, live trading sessions, live trading signals and live meetings.
Any of these bonuses attract Forex clients and give them extra service to the service they pay.
While the Forex industry is large there are many people who participate in the trading currencies.
Industry Rules That Are Mandatory
As the Forex industry evolves through time some new rules have been introduced.
By the new rules brokers cannot give a bonus on the deposit. New maximum leverage for new traders is set to 1:50 or 1:30.
In order to get higher leverage traders must be experienced which is confirmed by the trading history.
Brokers and companies that offer their services to the customers must be much more transparent in order to give the best user experience to the customer.
Forex Industry Trends
Forex is moving forward and the services become much better. Users are more satisfied and more protected.
Each user becomes more aware of possible bad service from companies that operate in loosely regulated jurisdictions.
New trading opportunities are added to the trading platforms, like trading Cryptocurrencies.
The demand for social trading services, which allow sharing the results of trading, charts, and trading signals is increasing rapidly.
Traders now have a chance to step in algorithmic trading. New services provide traders with an opportunity to create their own trading robots.
Forex Industry Services
Forex is a large money industry so the number of services is increasing to cover all demands from traders.
Here is a list of current usual service you can find in Forex industry:
- Signal providers
- Robot trading
- Proprietary trading
- Account management
- Market analysis
What is Forex Industry Size
Large number of Forex participants makes the Forex industry large. How large is the Forex industry you can see on the chart below.
The difference between Forex and NYSE is around 1000 times which is enormous.
Why is the Difference so High?
The main reason is that the Forex industry is world wide and stock exchange in New York is not so widely scattered. It is focused on the stocks in the U.S. and some from other countries.
Forex is world wide and consists of all currencies you can find in the world. Participants on the Forex are from the entire world and many of them have large sums of money.
While the Forex is the market where the large banks make the transactions you can imagine how much money is turned over and why it is so large.
How Much is Forex Industry Worth
To go a little more deep into the size of the Forex industry and how much is worth, take a look into the chart below.
Charts shows how much money is turned over on a year basis. You can see that the amount of money in the Forex industry is so large that it is worth participating and trying to make money.
As the years pass, the size of Forex has increased. This is due to the very attractive profit each trader can make.
By the trader I mean banks and large companies that use Forex to make more money. Also, Forex is the market for retail traders where those with large sums of money can also make a lot.
Making money in a very short period of time and without limits are the major reason why the Forex industry is so lucrative.
What are Forex Industry News
As any other industry that depends on the news, like the stock market, the Forex industry also depends on the news published concerning macroeconomic status of countries.
While the Forex is about currencies, any news about country health, like GDP or inflation, will have an impact on that currency and the Forex market will react.
Here are the factors that have most influence on the currency health and which will make a move on the Forex market when they are published:
- PPI as Producer’s Price Index
- shows trends within sale markets, manufacturing industries and commodities markets
- CPI as Consumer Price Index
- Consumer Price Index measures inflation that is most important indicator of the economic health of that country
- PMI as Purchasing Managers Index
- Purchasing manager index – shows us are purchasing managers optimistic or pessimistic about the economy
- GDP Gross Domestic Product
- tells us how much the economy is strong, how does it advance and is it healthy or not
- Unemployment Rate
- Percentage of the total work force that is unemployed and actively seeking employment during the previous month
- Interest rate
- Interest rate at which depository institutions lend balances held at the Federal Reserve to other depository institutions overnight
These are the main factors but there are others that can have an impact on the currency price. Following the news when they are published and what is published can improve the results you can have while making money on the Forex.
Common Forex Industry Scams
I have listed the most common ways the customer is tricked in Forex. You should read this closely and remember not to make mistakes and be tricked in this way.
- Unregulated and Dishonest Brokers
- There are many brokers who want to trick you. They are avoiding regulation and moving to countries with loosely regulators
- Fake Forex Signal Seller Scams
- Many want to make money fast, promising you a lot of money. To no get tricked because there is not easy money in Forex
- Forex Robot & Trading System Scams
- Robots cannot make money all by themselves. You need to watch the robot how it performs and fix it when you see the market is changing. Trading system must be verified on demo account and on real account before using it on your trading account
- Untrustworthy Investment Schemes & Funds
- if it sounds to good then it is very likely to good to be true
Spot Early Signs of Scams
You can educate yourself to avoid bad industry services and companies behind those services.
Here are the ways how to avoid bad service:
- Promises of guaranteed returns
- nothing is free and there is no guarantee return
- Asking for Personal Information
- Brokers can demand for personal information to verify your identity at the start. Later on nothing else you need to provide
- Advise out of Nowhere on the Internet
- Visit and use only well known brokers and companies. If the site is new and filled with ads you should be careful
- Brokers that Limit Withdrawals
- what you earn you should easily withdraw. If broker mess with you and limits your withdrawal be sure that broker is not good
The Forex industry is a large industry and we can say for sure that is the largest one. There is no other market that can be compared to.
As any industry, the Forex industry has certain rules that must be followed in order to give the best experience to their users.
By obeying industry rules Forex service providers maintain clean business and give the confidence and credibility to their customers.
Anyone who wants to be part of the Forex industry has open doors and there are few steps that must be done in order to start making money.
As a tool Forex participants can use industry news to help make better trading decisions when participating on the Forex.
What else can you find on the Forex and what is there more about Forex, I suggest reading article about trading on Forex for beginners where you will find much more interesting stuff that will help you in trading on Forex.