27 Key Forex Facts That Every Trader Should Know

The foreign exchange (forex) market has a massive global following and a growing reputation as a great place to make money through smart decisions.

We’ve assembled 27 forex facts and statistics that every trader should know. We also treat our facts critically – if the numbers don’t add up, we’ll do the math!

We’ll discuss:

  • The top currencies in forex
  • Where trading is most popular worldwide
  • Forex trader demographics, including the increasing number of female traders and Islamic accounts
  • How most traders work today

Let’s get straight to the good stuff.

Table of Contents

27 Forex Trading Facts & Statistics

1. There Are Roughly 10 Million Traders Worldwide

Most estimates place the number of active forex traders at around 10 million. While this number is hard to pin down as it’s often measured by the number of active accounts and may not include all brokers, the consensus is that trader volume has grown slightly since being around 9.6 million in 2019.

The COVID-19 pandemic saw a huge increase in the number of active accounts, but many of these were short-lived. However, the increased exposure has led to steady growth and an impressive volume of traders worldwide today.

2. Asia Has the Highest Number of Traders

Asian traders account for roughly one-third of all active traders. Estimates suggest that there are about 3.2 million traders in Asian countries, dwarfing the numbers from North America and Europe with around 1.5m each.

The exact spread of traders across Asia is unknown. Trading forex remains illegal in some parts of the continent (e.g. India), and regional estimates are often hard to come. However, what we do know is that the most populous continent is also where most people are becoming involved in the foreign exchange market.

3. Trading is Becoming Increasingly Popular in Africa and Latin America

Africa is catching up to North America and Europe in terms of trader numbers – it boasts well over a million forex traders. The rise of Africa-centric brokers, especially in South Africa, has given individuals on the continent much better access to the foreign exchange market.

South America may have around 600,000 active traders, with a further 335,000 reported in Central America. Interest in Latin American countries is clearly strong.

Australia and Oceania still sit behind the rest, with only around 190,000 traders, but the Australian Securities and Investments Commission (ASIC) is one of the leading regulators for forex globally, and trading in the region has seen strong recent growth.

4. Islamic Forex Accounts are Letting More Islamic Traders into the Market

One of the most important forex facts to know is that any type of trade that involves interest is considered riba and prohibited in Islamic Law.

This means that many types of trading are prohibited in countries that use Islamic Law or for practicing Muslims regardless of local laws. However, brokers have responded to this by creating Islamic trading accounts, which automatically protect users against any type of trade that would be considered riba.

This has been great news for traders in countries with large Islamic populations – while some countries still prohibit forex outright, these accounts create options for Islamic traders worldwide.

5. Forex is Growing Rapidly in Southeast Asia, Although Concerns Remain Over Unlicensed Forex Brokers

Vietnam and Thailand are among the fastest-growing countries in Southeast Asia for forex. Indonesia and Malaysia are also seen as important emerging markets, although local authorities have raised concerns about unlicensed brokers operating in the region.

With proper regulation and oversight from local authorities, Southeast Asia could become the world’s new leader by the number of users soon.

6. The UK is Often Cited as the Country with the Most Traders

One of the most often-cited statistics is that the UK has the highest number of traders. However, this data needs to be qualified – while the UK is certainly far ahead of any other European country with roughly 280,000 active accounts, it’s often compared exclusively to European countries in the data.

In-depth data on Asian and North American countries by trader volume tends to be missing. However, local estimates from Asian forex hubs like Japan suggest that there may be as many as 800,000 accounts trading in Japan, which would dwarf the UK’s numbers.

Likewise, trader volume in North America is estimated at 1.5m users – breaking it down by country, this would suggest that the much more populous US likely exceeds the UK in sheer numbers. However, we can’t know for sure without future reviews of user accounts.

7. UK Dominates the European Charts in Terms of Trader Numbers

Despite this, the UK is a massive forex hub. It has almost double the trading numbers of the next most active European country (Germany and Italy, with around 150,000 each).

Other countries with large trader populations include France and Romania. Trading seems to be much more popular in the wealthier West European countries, although, as noted, Romania performs strongly (over 100,000 accounts), and Poland also has a solid number of accounts (around 60,000).

8. The USD Currency Pairs Are Involved in Around 88% of Transactions

The USD remains the most-traded currency by a considerable margin. It’s involved in between 88% and 90% of all transactions. The BIS Triennial Central Bank Survey from 2020, an excellent source for forex trading statistics, suggests that it’s used in 88.3% of trades – this remains at a strong 88% in the updated 2022 survey.

By comparison, the Euro was used in 32.3% by volume in 2020, falling to 30.5% in 2022, according to the same survey. The Yen (Japan) and Pound Sterling (UK) rounded out the list at 16.8% and 12.8%. Interestingly, although the Yen has seen a significant drop in popularity since 2020, the Yen stood at a strong 17% in the updated 2022 survey.

9. UK is the Biggest Hotbed for Forex Transactions

In terms of trading volume, the UK remains the firm leader worldwide.

The UK was at the center of 43.1% of total trades in 2020, compared to around 19% in the US. The 2022 BIS Triennial Central Bank Survey suggests that this has fallen off to around 38% today.

10. There’s a Huge Volume of New Traders Entering the Forex Market

It’s estimated that around 31% of active traders are in their first year of trading. A further 39% may have been active for under 3 years, meaning that a combined total of around 70% of accounts are under 3 years old.

The dropout rate for new users is understandably high in forex. Losses are a necessary part of a trader’s education, and many people can’t afford that learning curve. However, as the rate of new traders remains high, it’s encouraging to see that people are still entering the market in high numbers.

11. Forex Trading Skyrocketed During the COVID-19 Pandemic

It’s been suggested that trading numbers shot up by as much as 300% during the COVID-19 pandemic.

Almost all work-from-home side hustles saw growth during this time, so it’s not surprising that many people decided to enter the world’s largest market at this point. Lack of dependable income and more time to spend on educational materials led many people to discover forex as an alternative to their day jobs.

12. the High Numbers Seem Here to Stay

The high volume of users (39%) whose accounts are between 1-3 years old suggests that these “lockdown traders” are sticking around in large numbers.

These users will have built substantial experience by now, and many have appreciated being able to go back to work for a more stable form of income, forex trading remains a lucrative side hustle.

13. Only a Few Traders Spend More Than 6 Hours Per Day Trading

Data indicates that forex remains most popular as a side hustle rather than a full-time job. Around 45% of users are active for only one or two hours per day. The volume who spend upwards of 6 hours each day trading is much lower, at 14%.

Making forex trading your full-time job is obviously a high-risk decision. This means it’s quite encouraging that most traders seem to regard it as a potential way to earn a little extra money than throwing themselves into the market full-time.

14. Trading Styles Remain Varied

There’s no hard data on which trading style is dominant, as single traders often use multiple styles. However, we can say with confidence that the 4 most popular forex trading styles remain:

  • Day trading
  • Scalping
  • Swing trading
  • Position trading

Day trading and scalping retain their appeal to those looking to make quick gains, while swing and position styles may appeal more to casual traders and those looking to make incremental, long-term gains.

15. Female Traders Represent Around 10% of Forex Traders

Most suggestions have placed the percentage of forex traders who are women at around 11% in 2022, having risen from 9-10% a couple of years earlier.

Forex has long been a male-dominated industry, but even small increases in the number of female traders are to be welcomed. Recent information about the relative success of female traders compared to male traders (see #17 below) should further encourage more women to get involved in trading.

16. The Divide Between Male and Female Forex Traders Varies Significantly by Region

The ratio of male to female traders varies dramatically around the globe. Forex-specific examples are often hard to come by, but XTB has analyzed the number of traders in general and produced an interesting report.

To put these numbers in context, it’s also been reported that women tend to favor forex compared to other styles of trading. This lines up with XTB’s findings, which suggest that only 9.7% of general trades are conducted by women (slightly lower than the forex-based estimate of 10-11%).

European markets tend to be more heavily male-dominated. XTB’s research suggests that European countries with a high number of traders tend to skew male, e.g.:

  • Germany (7.5% female)
    France (7.6% female)
  • Spain (6.4% female)

Elsewhere, the picture was slightly better. In the UK, the European leader by trader volume, female trader numbers were around 10.5%, which is higher than XTB’s estimated average. Meanwhile, Romania, another top European country for trader volume, has an even higher proportion (12.8%).

Elsewhere, the picture is even more diverse – female traders in Chile, for example, were reported to make up around 17.9% of its user base.

17. Female Traders Account for a Higher Proportion of Gains Than Losses

XTB’s findings also revealed that, counting both stocks and forex movements, women tended to perform very strongly.

With the percentage of trades at 9.7%, female traders were responsible for 10.7% of gains, while losses stood at only 8.7%. It’s been speculated that this may be due to men making more impulsive, rash decisions – keeping a steady head and making informed decisions is Trading 101, and data suggests that women are learning this lesson better than their male counterparts.

Regardless of what lies behind this impressive performance, it should be encouraging to current and prospective women in forex that while the space may remain male-dominated, the chance of success is anything but.

18. The USD/EUR Pair Accounts for Over 20% of Total Trades

The BIS reports that as of 2022, the USD/EUR pair makes up 22.7% of total trades. This is down from 24% in 2019, but it still represents by far the most significant pair.

The next most popular is the USD/JPY (Japanese Yen) pair, with around 13.5% of trades. All the top 3 pairs use the USD, with the USD/GBP pair rounding out the list.

The top pairs that don’t involve USD are EUR/JPY and EUR/GBP.

19. More USD Is Held Outside the US than Inside It

It’s estimated that around 66% of USD holdings aren’t based in the USA.

The currency is held in huge volumes by other governments, institutions, and private individuals – this is reflected in the USD being far and away the world’s favorite currency for forex trading.

While this may seem surprising, it’s actually hugely beneficial to the US economy. This level of foreign investment gives the US government what amounts to an interest-free loan of trillions of dollars.

The perceived strength of the US dollar is what keeps traders coming back to it. Minor and exotic pairs are far riskier, as market behavior is much harder to understand, and swings can be much sharper.

20. Forex Trading is Skewing Towards Younger Traders

While shares and stocks are often associated with older people, the fast-moving forex market is increasingly dominated by the young.

Around 27% of traders are below the age of 34, with another 28% in the 35-44 group. While this makes older Millennials and Gen X the most significant bracket, younger Millennials, and Gen Z investors also represent a large proportion of the market.

Given that these traders are typically less well-off than their older counterparts, this may further indicate that forex is seen as an attractive side hustle to bulk out the trader’s paycheck.

21. There Aren’t As Many Older Traders in Forex

Only around 9% of traders are aged over 65.

The over-55 age group accounts for around 24% of the total.

Given that forex trades are seen as higher-risk than managed options like stocks, it may stand to reason that older investors don’t want to risk their savings. Forex trading is also more involved and most easily conducted online, which may be reflected in its popularity among younger traders.

22. Most Traders Use Charts to Make Decisions

It’s been estimated that around two-thirds of traders use charts in daily decision-making. Charts are one of the top tools used to understand market fluctuations and clearly play an important role, especially in longer-term options like swing and position trading.

Of course, charts won’t tell you everything you need to know, and some may say that 66% is actually quite a low number. However, it’s good to observe that most traders are using tools and educational resources before making decisions.

23. MT4 and MT5 Continue Dominance Among Trading Platforms

MetaTrader 4’s simplicity for new users makes it enduringly popular, and it’s also favored by many leading forex brokers. However, MetaTrader 5 is now competing with it in terms of popularity.

MetaQuotes revealed that in June 2021, MetaTrader 5 became the #1 choice for forex brokers for the first time ever. 5 is arguably high-performance, but with the high volume of new traders, expect MetaTrader 4 to remain at the forefront of trading for some time.

24. Social Trading Has Become Extremely Popular

Social trading, sometimes referred to as copy trading, became one of the big stories of the pandemic-era forex market.

It gained traction on sites like Reddit, but brokers also offer bespoke copy trading services that allow traders to base their decisions on more experienced users’ movements.

Estimates have suggested that the social trading platform market may be worth up to $3.77bn by 2028. This is based on consistent growth of around 7.8%.

25. But Some Analysts Think This May Not Last

It’s been suggested that tighter restrictions from top regulators like the UK’s Financial Conduct Authority (FCA) could stop copy trading in its tracks if it’s deemed risky for uninformed investors.

Social trading takes many forms – often, the “social” aspect is prioritized, with users learning about how forex markets work while making “safer” decisions.

As long as trades require the user to sign off before money starts moving, copy trading seems fairly stable. But financial regulators are keeping a key eye on automated trades in a bid to protect unsuspecting novice traders.

26. The Proportion of Successful Traders Remains Low

This is perhaps the most consistent of all  facts, and no list would be complete without it.

The percentage of traders who find success in forex is very low. It’s typically estimated to be around 10%, although some estimates are even less optimistic and project that only 5% of traders make profits.

This is partly due to the nature of financial markets. Uninformed decisions are almost always punished. Even informed decisions can cost a lot – market forces are hard to predict.

However, these figures often also reflect the high number of accounts that will make a few trades, lose consistently, and then vanish. Most forex traders give up as soon as they realize they’re not making quick gains. Each of these accounts registers as an individual making a loss.

Longer-lasting accounts are more likely to be profitable because they have time for losses to be absorbed into gains. Traders may also find more success as they gain experience (as long as they learn from their mistakes).

The conclusion, as always, is that forex isn’t something to jump into without solid information, and novice traders should understand that there will always be losses.

27. Forex Remains the World’s Largest Financial Market

In late 2022, the forex market hit an unprecedented volume of daily trades. $7.5 trillion was moving on the market daily.

This was over half of all global turnover (51%). When novice traders go looking for markets, it’s no surprise that forex is the first one they find – and will likely remain this way.

Wrapping Up

In a massive market with a highly fluid user base, it’s so hard to know which forex statistics are genuine and which are based on shaky or incomplete data.

We’ve taken every care to establish the most interesting, useful, and verifiable information for your consideration. Learning how the forex market is moving around the world, which demographics are discovering it, and how currencies are performing isn’t just fascinating – it helps you develop a well-rounded perspective.

The more you know…!

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