Foreign exchange trade arose soon after President Nixon removed the US from the Gold Standard, allowing the dollar’s value to float. This happened in August of 1971, which is more than 40 years ago. It’s doubtful that anybody could have expected how the Nixon Shock would transform into a multi-trillion dollar global industry. Is it possible that such a surprise awaits us in the future? What would the forex market be like in 25 years? It will be difficult to forecast what Forex trading will be like in 20 years, particularly because it is difficult to predict what will happen in the future of Forex trading in the next 10 minutes or even less.
Increase in Popularity
Forex has evolved from a comparatively obscure and inaccessible trading instrument to a nearly global phenomenon in the last few years. The ease with which computers make Forex trading available, as well as the sudden proliferation of Forex software resources and websites, as well as all types of training and advertisement, has enticed many people to try their hand at profiting from it. According to a Dow Jones Newswires survey, “daily average foreign exchange transactions hit $4.71 trillion in June 2011,” which is slightly higher than the previous year’s value, which was $3.98 trillion per day, as recorded in the Bank for International Settlements’ 2010 report.
Apart from marketing and convenience, the prospect of being wealthy while still at home has clearly captivated many people – and will undoubtedly continue to do so. Until 2008, as liquidity was more easily available and flowing, people could bring their money into Forex, lose some, and not regret it. Apart from marketing and convenience, the prospect of being wealthy while still at home has clearly captivated many people – and will undoubtedly continue to do so.
Until 2008, as liquidity was more easily available and flowing, people could bring their money into Forex, lose some, and not regret it. About the fact that total trade volume increased during those years, the Triennial Central Bank Survey stated in the document already listed by the Bank of International Settlements that the rate of growth had decreased, going from a massive 72 percent increase between 2004 and 2007, to just 20 percent between 2007 and 2010. If the economy does not change significantly, this could be a foreboding sign for the future of Forex.
The slowdown of the trend
The same Triennial study mentions that some unpredictable groups experienced a slowdown in their overall Forex trading at that period. Governments and central banks were included. Individuals and smaller trading institutions, on the other hand, saw a significant increase in trading volume during that period. Years before, the industry was largely open only to bigger organizations, but the proliferation of the Internet, along with personal computers and mobile devices, has made it affordable to countless individuals all over the world. This slowdown in Forex markets may be a sign of things to come in the future. While no one can predict what will happen in the next 20 years, the current state of the economy, as well as a discernible trend already in progress, might be telling us a lot about the prospects of Forex markets.
Managed forex accounts
Investing in a controlled Forex portfolio, which is becoming increasingly popular, will offer a safer way to trade Forex. A potential issue is that the investment’s protection is dependent on the person who is actively doing the dealing, and this person is most likely not affiliated with the investment firm at all. It is more difficult and easier to find the best currency trading platform at the same time, because there are many platforms that make it easier for people to access them, but is difficult to decide which one to choose and it requires a lot of research and knowledge about the firm. This type of investment normally yields a 10 to 15% annual return, with some yielding even more, but it may necessitate a $10,000 or more initial investment. Many investment firms sell Forex portfolios as part of a diversified fund, and this sort of portfolio seems to be outperforming others at the moment. With such a significant benefit, you should predict a significant increase in the number of people going in this direction in the short and long term.
Implementation of Mobile devices
By the end of 2013, 20 to 30 percent of equity trading will be conducted on a mobile device, according to CommSec’s Richard Burns. With the sheer scale of the forex market relative to stock trading, forex trading will be exclusively conducted on mobile devices in 20 years. Mobile app use is on the rise among foreign exchange traders, with some estimating that it accounts for as much as 15% of overall online retail trades.
The global expansion of mobile devices now allows Forex traders to quickly watch live headlines, read economic data, and view research statistics. They will even get price warnings, among other things. This not only makes it electronic, but it also allows traders to deal from almost any location and at any time of day. Without a doubt, Forex dealing will be even more straightforward in 20 years.
The current economic situation is affecting many currencies, and many of them are doing badly, like China, the world’s second-largest economy. Another troubled economy is the Eurozone. Recent criticism has led others to believe that the Euro is already in difficulty – and will be for another 20 years, according to Wolfgang Münchau. He says this because he thinks that part of the issue is that there isn’t yet the requisite banking union, which won’t happen until there is a single petrodollar.
In the next 20 years, the availability and types of software that automates the Forex trading mechanism will continue to expand, which is already happening at a faster rate than ever. The app would become much more advanced and flexible, allowing everyone to quickly set it up and use it, with a much lower need to understand Forex trading at a basic level. There’s a good chance it’ll install on its own and only need minor tweaking until it’s finished. According to the Bank of International Settlements survey, manual trading accounted for 98 percent of all trades in 2004. In 2010, however, voice trading accounted for just 55% of all trades, and in 20 years, all trades will be digital. According to WorldFinance.com, only 18 percent of Forex traders are now made by voice, according to the April 2012 issue of Euromoney. This is projected to slip to 13% in the not-too-distant future.
Automated trading would almost certainly gain in importance and probability. However, we must note that price movement is influenced by human emotion. Humans are the ones that set the conditions for automated systems to operate. It does not appear that technology would be able to entirely replace humans. If bots were the only ones driving the market, it would be a whole different place.
The invention of better software in the coming years would make it easier to turn a profit. Many Forex tech firms claim that their product is the “future of Forex.” Some devices, such as the MT4 Trade copier, are designed to minimize the chance of failure, and as a result, they seem to be gaining popularity. A simple benefit of tech is that it can help eradicate emotion-based investing, which is still a challenge, as people learn to trust it. Not all tech is created equal, and any decision must be individually reviewed before being trusted – even after 20 years.
Summing It Up
Finally, to sum up, it was not predicted or expected from everyone that the foreign exchange market would become so popular. However, the massive popularity of the forex market is not only because of the possibilities that the market gives people but also due to the technological advancements that have changed the use of it and have become more efficient and convenient for the users.
One of the most important characteristics of the financial market is that it tries to keep up with the technological advancements and the forex market appears to be one of the most successful branches in this case. We have already seen the voice trading, automated trading, and many other advanced features of the market, however, we can boldly say that this is merely a beginning and more innovations and changes are still to come.