Excellent idea. Since we will be discussing technical analysis, I presume we will be basing our opinions and statements based on statistics and facts.
Since you state that the forex market is the most volatile market, could backup you claim with any facts or is this folklore ?
How does volatility of the forex markets compare with the other markets (equities, commodities, financial derivatives, bullion etc) ?
In my opinion, there is no basis to the claim that the forex markets are most volatile.
Kindly elaborate.
ive been trading in forex for the last two years. based on my experience whats makes forex become very volatile compare to others is because the market is so big. The FX market is one of the largest and most liquid financial markets in the world, and includes trading between large banks, central banks, currency speculators, corporations, governments, and other institutions. The average daily volume in the global forex and related markets is continuously growing. Traditional turnover was reported to be over US$ 3.2 trillion in April 2007 by the Bank for International Settlement. Since then, the market has continued to grow. According to Euromoney's annual FX Poll, volumes grew a further 41% between 2007 and 2008.
The foreign exchange market is unique because of:
1. its trading volumes
2. the extreme liquidity of the market
3. the large number of, and variety of, traders in the market
4. its geographical dispersion
5.its long trading hours: 24 hours a day except on weekends (from 5pmEST n Sunday until 4pm EST Friday)
6.the variety of factors that affect exchange rates.
7.the low margins of profit compared with other markets of fixed income (but profits can be high due to very large trading volumes)
8.the use of leverage
As such, it has been referred to as the market closest to the ideal perfect competition, notwithstanding market manipulation by central banks. According to the Bank for International Settlements,average daily turnover in global foreign exchange markets is estimated at $3.98 trillion. Trading in the world's main financial markets accounted for $3.21 trillion of this. This approximately $3.21 trillion in main foreign exchange market turnover was broken down as follows:
$1.005 trillion in spot transactions
$362 billion in outright forwards
$1.714 trillion in forex swaps
$129 billion estimated gaps in reporting
hope it answered your question.
