Can We Sustain High Trading Volumes During The Pandemic?

U.S. dollar banknote with map

The current surge in FX trading appears to be from new traders, with many forex brokers reporting a 25% average month-on-month increase in forex accounts.

It’s been a year since the coronavirus broke and the financial markets are still grappling with significant uncertainty. But not all businesses are struggling to cope.

COVID may have negatively impacted many businesses but the FX industry was not one of them. Forex brokers have been largely unscathed by the pandemic, and in many cases, the industry has seen a significant boost over the past year.

Those familiar with forex trading are undoubtedly aware that the past few months have seen massive growth across a wide range of trading platforms and commodities. The current surge in FX trading appears to be from new traders, with many forex brokers reporting a 25% average month-on-month increase in forex accounts.

Extensive growth like this is highly unusual in the forex industry. The average daily forex trading volume increased by no more than 40% over the last decade. Of course, the remarkable shift is a direct result of this year's unusual financial and economic climate, which has resulted in one of many high-impact factors.

What caused the increase in trading volumes?

You may be wondering what created such a surge in trading volumes during the pandemic. The likely explanation is that traders who were having to work from home had more time to devote to trading. Also, many people coping with a looming financial crisis and actively seeking new income sources turned to trading for the first time.

Volumes were also impacted by people who had been interested in trading but hadn’t previously had the time to take it up. With the lockdowns, travel restrictions, and working from home these people suddenly had the time to learn how to trade. More importantly, they were also incentivized by global events presenting a once-in-a-lifetime opportunity to benefit from massive market volatility. Naturally, this meant increased market interest and trading activity.

1 2
View single page >> |

Disclaimer: DailyForex will not be held liable for any loss or damage resulting from reliance on the information contained within this website including market news, analysis, trading signals and ...

more
How did you like this article? Let us know so we can better customize your reading experience.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.