Dalam menggunakan situs ini, Anda dianggap telah membaca dan menyetujui persyaratan dan ketentuan berikut. Istilah berikut berlaku untuk Syarat dan Ketentuan ini, Pernyataan Privasi dan Pemberitahuan Penolakan dan setiap atau semua Klien Perjanjian, Anda dan Anda merujuk kepada Anda, orang tersebut Mengakses situs web ini dan menerima syarat dan ketentuan Perusahaan Perusahaan, Diri Sendiri, Kami dan Kami, mengacu kepada Pihak Perusahaan, Pihak, atau Kami, mengacu pada Klien dan diri kami sendiri, atau Klien atau diri kami Semua persyaratan mengacu pada Menawarkan, menerima dan mempertimbangkan pembayaran yang diperlukan untuk melakukan proses bantuan kami kepada Klien dengan cara yang paling tepat, baik melalui rapat formal dengan durasi tetap, atau cara lain, untuk tujuan memenuhi kebutuhan Klien sehubungan dengan Penyediaan produk layanan yang dinyatakan oleh Perusahaan, sesuai dengan dan tunduk pada, Hukum Inggris yang berlaku Setiap penggunaan terminologi di atas atau kata lain dalam bentuk tunggal, jamak, Kapitalisasi dan atau dia dia atau mereka, dianggap saling dipertukarkan dan karena itu mengacu pada hal yang sama. Kami berkomitmen untuk melindungi privasi Anda. Karyawan yang sah di dalam perusahaan pada kebutuhan untuk mengetahui dasar hanya menggunakan informasi yang dikumpulkan dari pelanggan individual Kami terus meninjau sistem kami Dan data untuk memastikan layanan terbaik kepada pelanggan kami Parlemen telah menciptakan pelanggaran khusus untuk tindakan yang tidak sah terhadap sistem komputer dan data Kami akan menyelidiki tindakan tersebut dengan maksud untuk menuntut dan atau mengambil tindakan sipil untuk memulihkan kerusakan terhadap pihak yang bertanggung jawab. Kami terdaftar Di bawah Undang-Undang Perlindungan Data 1998 dan karena itu, setiap informasi mengenai Klien dan Catatan Klien masing-masing dapat diserahkan ke pihak ketiga. Namun, catatan Klien dianggap rahasia dan oleh karena itu tidak akan diungkapkan ke pihak ketiga manapun, selain Financial Magnates jika Diwajibkan secara hukum untuk melakukannya kepada pihak berwenang yang berwenang. Kami tidak akan menjual, berbagi, o R menyewakan informasi pribadi Anda ke pihak ketiga atau menggunakan alamat e-mail Anda untuk surat yang tidak diminta Setiap email yang dikirim oleh Perusahaan ini hanya akan terkait dengan penyediaan layanan dan produk yang disepakati. Sangkalan. Ekstensi dan Keterbatasan Informasi di situs web ini adalah Yang disediakan secara dasar Sejauh diizinkan oleh undang-undang, Perusahaan ini mengecualikan semua pernyataan dan jaminan yang berkaitan dengan situs web ini dan isinya atau yang disediakan atau oleh afiliasi atau pihak ketiga lainnya, termasuk yang berkaitan dengan ketidakakuratan apapun. Atau kelalaian di situs ini dan atau literatur Perusahaan dan mengecualikan semua kewajiban atas kerusakan yang timbul dari atau sehubungan dengan penggunaan situs ini Ini termasuk, namun tidak terbatas pada, kerugian langsung, kehilangan bisnis atau keuntungan, terlepasnya kehilangan atau kerugian tersebut. Keuntungan dapat diperkirakan, muncul dalam keadaan normal atau Anda telah menyarankan Perusahaan ini kemungkinan potensi kerugian tersebut, kerusakan yang disebabkan oleh co Anda Mputer, perangkat lunak komputer, sistem dan program dan data di atasnya atau kerusakan langsung dan tidak langsung lainnya, konsekuensial dan insidentil Keuangan Magnates bagaimanapun tidak termasuk tanggung jawab atas kematian atau cedera pribadi yang disebabkan oleh kelalaiannya Pengecualian dan batasan di atas berlaku hanya sejauh diizinkan Oleh hukum Tidak ada hak hukum Anda karena konsumen terpengaruh. Kami menggunakan alamat IP untuk menganalisis tren, mengelola situs, melacak pergerakan pengguna, dan mengumpulkan informasi demografis yang luas untuk alamat IP agregat yang tidak terkait dengan informasi identitas pribadi. Administrasi sistem, mendeteksi pola penggunaan dan tujuan pemecahan masalah, server web kami secara otomatis mencatat informasi akses standar termasuk jenis browser, waktu akses membuka surat, URL yang diminta, dan URL rujukan Informasi ini tidak dibagi dengan pihak ketiga dan hanya digunakan di Perusahaan ini pada Dasar yang perlu diketahui Informasi individual yang dapat diidentifikasi terkait dengan da ini Ta tidak akan pernah digunakan dengan cara apapun yang berbeda dengan yang disebutkan di atas tanpa izin eksplisit Anda. Seperti kebanyakan situs web interaktif, situs web atau ISP perusahaan menggunakan cookies untuk memungkinkan kita mengambil kembali rincian pengguna untuk setiap kunjungan. Kuki digunakan di beberapa area di situs kami. Untuk mengaktifkan fungsi area ini dan kemudahan penggunaan bagi orang-orang yang berkunjung. Links ke situs ini. Anda mungkin tidak membuat link ke halaman manapun dari situs ini tanpa izin tertulis dari kami Jika Anda membuat link ke halaman situs ini Anda melakukannya atas risiko Anda sendiri dan pengecualian dan batasan yang disebutkan di atas akan berlaku untuk penggunaan situs web ini dengan menautkannya. Tautan dari situs web ini. Kami tidak memantau atau meninjau konten situs web pihak lain yang ditautkan ke Dari situs ini Pendapat yang diungkapkan atau materi yang muncul di situs web semacam itu tidak harus dibagi atau didukung oleh kami dan tidak boleh dianggap sebagai penerbit pendapat atau materi semacam itu Harap diperhatikan bahwa kami tidak bertanggung jawab atas hal tersebut. Praktik atau isi rivacy, dari situs-situs ini Kami mendorong pengguna kami untuk menyadari ketika mereka meninggalkan situs kami untuk membaca pernyataan privasi dari situs-situs ini Anda harus mengevaluasi keamanan dan kepercayaan dari situs lain yang terhubung ke situs ini atau diakses melalui situs ini sendiri. , Sebelum mengungkapkan informasi pribadi kepada mereka Perusahaan ini tidak akan menerima tanggung jawab atas kehilangan atau kerusakan dengan cara apapun, entah penyebabnya, akibat dari pengungkapan Anda kepada pihak ketiga atas informasi pribadi. Hak cipta dan hak kekayaan intelektual lain yang relevan ada pada semua teks yang terkait Untuk layanan Perusahaan dan isi lengkap dari situs ini. Semua hak dilindungi undang-undang Semua materi yang ada di situs ini dilindungi oleh undang-undang hak cipta Amerika Serikat dan mungkin tidak akan diproduksi, diproduksi, diedarkan, dipublikasikan atau diterbitkan publik tanpa persetujuan tertulis dari Keuangan Magnat Anda tidak boleh mengubah atau menghapus hak merek dagang, hak cipta, atau pemberitahuan lain dari salinan Konten Semua informasi di halaman ini dapat berubah Penggunaan situs web ini merupakan penerimaan atas persetujuan pengguna kami Harap baca kebijakan privasi dan sanggahan legal Trading valuta asing kami dengan marjin membawa tingkat risiko tinggi dan mungkin tidak sesuai untuk semua investor Tinggi Tingkat leverage dapat bekerja melawan Anda dan juga untuk memutuskan untuk melakukan perdagangan valuta asing Anda harus mempertimbangkan secara hati-hati tujuan investasi, tingkat pengalaman dan selera risiko Anda Kemungkinan ada bahwa Anda dapat mempertahankan hilangnya sebagian atau seluruh investasi awal Anda dan oleh karena itu Anda Seharusnya tidak menginvestasikan uang yang tidak dapat Anda kehilangan Anda harus menyadari semua risiko yang terkait dengan perdagangan valuta asing dan meminta saran dari penasihat keuangan independen jika Anda ragu. Pendapat yang diungkapkan di Financial Magnates adalah hak pengarang individual dan tidak Serta mewakili pendapat Fthe perusahaan atau manajemen Keuangan Magnates belum memverifikasi secara akurat Atau pernyataan sebenarnya dari setiap klaim atau pernyataan yang dibuat oleh kesalahan dan kelalaian penulis independen dapat terjadi. Pendapat, berita, penelitian, analisis, harga, atau informasi lain yang terdapat dalam situs web ini, oleh Financial Magnates, karyawan, mitra, atau kontributornya. , Diberikan sebagai komentar pasar umum dan bukan merupakan nasehat investasi Financial Magnates tidak akan bertanggung jawab atas kerugian atau kerusakan, termasuk namun tidak terbatas pada, hilangnya keuntungan, yang mungkin timbul secara langsung atau tidak langsung dari penggunaan atau kepercayaan terhadap informasi tersebut. Masing-masing pihak tidak bertanggung jawab atas kegagalan untuk melakukan kewajiban apapun berdasarkan Persetujuan apapun yang disebabkan oleh sebuah peristiwa di luar kendali partai tersebut termasuk namun tidak terbatas pada Tindakan Tuhan, terorisme, perang, pemberontakan, pemberontakan, pemberontakan , Kerusuhan sipil, tindakan otoritas sipil atau militer, pemberontakan, gempa bumi, banjir atau kejadian alami atau buatan lainnya yang berada di luar kendali kita, yang menyebabkan penghentian Perjanjian atau kontrak ditandatangani, atau yang dapat diperkirakan secara wajar Pihak manapun yang terkena dampak kejadian tersebut harus segera memberitahukan Pihak lainnya yang sama dan harus menggunakan semua upaya yang wajar untuk mematuhi persyaratan dan ketentuan dari suatu Perjanjian yang tercantum di sini. Kegagalan Salah satu Pihak untuk menuntut kinerja yang ketat dari setiap ketentuan Perjanjian ini atau Persetujuan apapun atau kegagalan salah satu Pihak untuk menggunakan hak atau upaya yang dengannya, dia atau mereka berhak berdasarkan ketentuan ini tidak akan merupakan pengabaian dan tidak akan menyebabkan pengurangan Kewajiban berdasarkan Perjanjian ini atau Perjanjian Tidak ada pengabaian terhadap salah satu ketentuan dalam Persetujuan ini atau Persetujuan apapun akan berlaku efektif kecuali jika dinyatakan secara tegas dan ditandatangani oleh kedua Pihak tersebut. Pemberitahuan Perubahan. Perusahaan berhak untuk mengubah kondisi ini dari Waktu ke waktu karena sesuai dan Anda terus menggunakan situs ini akan menandakan penerimaan Anda terhadap penyesuaian apapun terhadap persyaratan ini Jika ada perubahan pada kami Kebijakan privasi, kami akan mengumumkan bahwa perubahan ini telah dilakukan di beranda kami dan di halaman utama lainnya di situs kami Jika ada perubahan dalam cara kami menggunakan pelanggan situs kami Informasi yang dapat diidentifikasi secara pribadi, pemberitahuan melalui e-mail atau surat pos akan menjadi Dibuat untuk orang-orang yang terkena dampak perubahan ini Setiap perubahan pada kebijakan privasi kami akan diposkan di situs web kami 30 hari sebelum perubahan ini terjadi Oleh karena itu Anda disarankan untuk membaca ulang pernyataan ini secara reguler. Persyaratan dan ketentuan ini merupakan bagian dari Perjanjian antara Klien dan diri kita sendiri Akses Anda terhadap situs ini dan atau melakukan pemesanan atau Perjanjian menunjukkan pengertian, persetujuan dan penerimaan Anda, Pemberitahuan Penafian dan Syarat dan Ketentuan Lengkap yang tercantum di sini Hak Konsumen Anda tidak terpengaruh. Finance Magnates 2015 Semua Hak Dilindungi. Berapa Besarnya Pasar Forex Ritel. Kemarin, di Bagian Pertama dari Tinjauan Industri Forex bulan September, kami menganalisis MA bulan lalu, memberikan perhitungan harga dan analisis harga pembelian untuk masing-masing dari lima kesepakatan, termasuk Swissquote s Pembelian akuisisi ganda MIG Bank dan FXCM Hari ini, kami terus meninjau aktivitas bulan sebelumnya. BIS Triennial FX Survey. Before kebingungan kesepakatan pada paruh kedua bulan September, acara utama bulan ini adalah peluncuran Bank of Survei Pemukiman Internasional BIS Triennial FX Survei ini terdiri dari hasil perhitungan dari dealer utama dari seluruh dunia untuk bulan April 2013 Rata-rata volume perdagangan harian rata-rata 5 3 triliun untuk bulan April, hasilnya menghancurkan angka 4 triliun Dari tahun 2010 waktu untuk memperbarui semua situs broker yang merujuk ke FX sebagai pasar 4 triliun per hari. Di antara tren survei yang penting, data menunjukkan bahwa Inggris dan AS, dua wilayah terbesar Untuk perdagangan FX di tahun 2010, memegang posisi teratas dan juga meningkatkan pangsa pasar. Hal ini terjadi bahkan karena originasi perdagangan dari negara-negara non-Inggris dan AS telah meningkat. Seiring pertumbuhan, perusahaan-perusahaan di negara-negara ini memilih untuk menggunakan Inggris dan Dealer AS untuk sumber likuiditas Hal ini dapat berubah meskipun, seperti khususnya di Asia, telah terjadi peningkatan permintaan untuk kolam likuiditas lokal. Sorotan lain dari laporan ini adalah masuknya data ritel Untuk pertama kalinya, survei FX mencakup statistik volume ritel, Dan mengukur volume dealer utama dengan pihak-pihak yang diperdagangkan secara eceran Volume ini terutama likuiditas yang bersumber untuk agregator yang ditargetkan untuk arus order ritel Survei tersebut menunjukkan bahwa 185 miliar, atau 3 5 dari 5 3 triliun, merupakan arus ritel Dari 185 miliar, 78 Miliar terdaftar sebagai FX spot dengan jumlah yang sedikit lebih kecil 74 miliar pada swap FX. Mengetahui fakta bahwa survei BIS menggunakan penghitungan tunggal untuk perhitungannya, ret Angka FX spot adalah 156 miliar per hari saat dihitung secara ganda. Untuk perbandingan, dalam Laporan Industri Triwulanan kami, Magnet Magnet memperkirakan volume harian ritel rata-rata 325 miliar. Akuntansi untuk perbedaan tersebut, adalah masuknya volume eceran dalam perkiraan kami yang disimpan secara internal oleh Pialang pembuat pasar, dan tidak melakukan hedging secara eksternal Dengan mempertimbangkan hal itu, ini mewakili bahwa lebih dari 50 volume ritel dieksekusi secara internal berdasarkan pasar. Jumlah aktual volume yang tidak dilindung nilai mungkin lebih mendekati 60 -65, karena kami beralasan Bahwa angka BIS s 78 miliar mencakup arus pesanan dari bank regional Tier 3 yang menggunakan agregator yang didorong oleh ritel ke likuiditas sumber. Mengenai bank-bank ini, walaupun arus pesanan terdaftar sebagai arus ritel, dikeluarkan dari perkiraan Forex Magnates. Berita utama lainnya Selama September. Alpari Keluar dari Pasar FX Ritel AS Juga terjadi pada bulan September adalah keluarnya Alpari dari pasar FX ritel Saat ini, th E broker akan terus memberikan solusi kelembagaan di AS namun mentransfer buku ritel AS ke FXCM dan rincian FXDD tentang kemungkinan kompensasi disorot kemarin. Pintu keluar tidak terlalu mengejutkan karena telah diisukan sejak 2012, di tengah meningkatnya biaya pertemuan AS Persyaratan peraturan dan basis klien broker yang semakin berkurang. Dalam hal yang terakhir, aset ritel telah turun lebih dari 5 juta di tahun 2013, menjadi 10 33 juta pada akhir Juli. Persetujuan SEF Cadangan Mantap CFTC sangat sibuk selama bulan September, keduanya menerima dan menyetujui Aplikasi untuk fasilitas eksekusi swap SEF Fasilitas adalah hasil dari perusahaan yang terburu-buru mematuhi peraturan Dodd-Frank yang akan mulai berlaku hari ini, namun telah ditunda hingga November Aturan tersebut ditujukan untuk mengatur perdagangan over the counter swaps. , Dengan SEF diformulasikan untuk memberikan peningkatan keamanan finansial melalui penggunaan pemantauan kredit pra-perdagangan dan struktur rekrutmen sentral PKC Selama m Onth, tempat saham utama perdagangan, CME, ICAP dan Thomson Reuters mengajukan status SEF Menerima persetujuan adalah Integral, Tradeweb, MarketAxess, ICE, 360T TrueEX, GFI, Javelin, BGC, dan TeraExchange Perusahaan bergabung dengan Bloomberg, yang menjadi yang pertama SEF disetujui di Juli. Regulasi Roundup Setelah dikenai biaya oleh NFA pada tahun 2012 untuk praktik selip harga yang tidak menguntungkan, FXDD diikuti dengan counter melawan regulator di pengadilan Masalah ini akhirnya diistirahatkan dengan FXDD yang menerima denda 2 9 juta dari NFA Pada bulan September Di tempat lain, Reserve Bank of India RBI mengacak-acak beberapa bulu saat memberi tahu bank bahwa mereka menuntut penutupan rekening nasabah yang terbukti bersalah mentransfer dana melalui kartu kredit ke perdagangan forex Kebijakan tersebut mengikuti kelanjutan tindakan anti-forex dari RBI sebagai negara telah menjadi sasaran banyak penipuan HYIP. Bank Amerika Merrill Lynch meluncurkan platform Mercer FXPB. Konsolidasi GLG berlanjut saat ia menurunkan Pro Spreads. LMAX rebrands website dengan fokus institusional. Komisioner Keuangan mengumumkan lisanya yang tidak biasa dari broker yang berpartisipasi. GAIN Capital secara resmi meluncurkan platform yang dapat diperdagangkan ke klien. Statistik umum dilontarkan sebagai fakta oleh banyak orang adalah bahwa 95 pedagang kehilangan uang Tidak ada orang Tampaknya tahu dari mana asas ini berasal, tampaknya salah satu dari jumlah tersebut ditarik keluar dari udara sebagai tebakan yang lalu oleh beberapa kepala bijak yang telah dikodekan sebagai kebenaran besar seiring berlalunya waktu. Studi Sejahtera tentang Pedagang Berjangka Sebuah studi yang dilakukan oleh Thomas A Hieronymous, seorang ekonom pertanian di University of Illinois mengatakan pada sebuah cerita yang agak berbeda, Hieronymous menganalisis 462 akun perdagangan spekulatif dari perusahaan pialang utama selama periode satu tahun di tahun 1969 Akun tersebut memperdagangkan berbagai kontrak komoditas Tersedia pada saat itu Sepanjang tahun ini, 164 akun menunjukkan keuntungan dan 298 akun menunjukkan kerugian, artinya lebih dari sepertiga pedagang marah E uang. Untuk menghilangkan penggoda waktu pertama Hieronim menghilangkan semua akun yang menghentikan perdagangan setelah hanya dalam waktu singkat Pedagang yang telah menghasilkan lebih dari 10 perdagangan sepanjang tahun ini atau mengalami kerugian atau keuntungan lebih dari 500 dihitung. Pedagang biasa ditemukan bahwa 41 pedagang reguler menghasilkan uang sepanjang tahun Mayoritas memenangkan atau kehilangan jumlah moderat sekitar 3000 atau kurang tapi ini adalah tahun 1969, sehingga disesuaikan dengan inflasi, angka tersebut lebih terhormat, walaupun beberapa dibuat atau hilang jauh lebih besar. Jumlah Keseluruhan pasar menunjukkan sifat nol-sumnya karena di kelompok ini, keuntungan bersihnya kira-kira nol, jadi 41 pedagang mengambil uang dari sisa sisanya. Timer satu kehilangan 92 waktu. Pelajaran Banyak orang masuk tidak siap, Mengambil kerugian dan kemudian dengan cepat pergi dengan jari-jari terbakar Mereka yang bertahan untuk bermain game bisa menjadi pemenang, tapi bukan mayoritasnya. Johnson Report on Day Traders. Ronald L Johnson menyiapkan sebuah laporan untuk Securities Amerika Utara A Dministrator Asosiasi NASAA, kelompok perlindungan konsumen yang berusaha menjaga industri futures tetap jujur terhadap keberhasilan pedagang eceran Dia memilih 30 akun acak bukan ukuran sampel yang sangat besar, saya akan setuju dari perusahaan perdagangan eceran Anda dapat dengan mudah menemukan laporan ini di Internet, cukup dengan mencari Johnson Report atau yang serupa. Studi ini menemukan bahwa 18 dari 26 akun kehilangan uang. Selain itu, risiko penghitungan reruntuhan pada statistik trader menemukan bahwa secara teori, tiga perempat sampel mengalami kegagalan yang tidak dapat dihindari. , Dengan 100 risiko kehancuran. Selanjutnya, 8 akun yang menguntungkan juga memiliki risiko reruntuhan yang sangat tinggi. Hanya tiga dari delapan akun yang menghasilkan uang memiliki risiko merusak cukup rendah untuk menyiratkan adanya kesuksesan yang signifikan sebagai pedagang spekulatif. Di bawah 25 Misalnya salah satu dari akun pemenang yang dibuatnya dari total keuntungannya hanya pada satu perdagangan 7.650, tanpa perdagangan itu 99 perdagangan lainnya akan terjaring hanya 610 secara total, menunjukkan bahwa keberuntungan mungkin Ccount untuk sebagian besar kinerja ini. Pedagang yang paling sukses dalam grup ini memiliki masa simpan rata-rata 47 hari, dan tidak melakukan perdagangan hari Akun lainnya tidak diperhitungkan karena pemenang atau pecundang hanya memiliki beberapa transaksi dan tidak valid secara statistik. Kesimpulan dari penelitian ini sebagian besar pedagang yang disurvei memiliki risiko kehancuran yang begitu tinggi sehingga membuat kebangkrutan akhirnya tidak dapat dihindari Pedagang dengan pedagang foto terpendek waktu pedagang kehilangan uang paling banyak dan memiliki risiko kerusakan tertinggi. Laporan tersebut juga menemukan bahwa Waktu memegang rata-rata untuk memenangkan perdagangan jauh lebih pendek daripada waktu memegang untuk kehilangan perdagangan, menunjukkan bahwa para pedagang memotong pemenang mereka lebih awal namun membiarkan kerugian mereka berjalan. Studi tersebut mengabaikan dampak pajak, dan tidak berkomentar mengenai apakah sedikit Pemenang sebenarnya lebih baik dari pada dana indeks, hanya apakah mereka menguntungkan atau tidak secara absolut. Johnson Report menarik, tapi untuk volume data Odean an D Barber memberikan argumen yang jauh lebih meyakinkan. Studi tentang pedagang saham. Odean, seorang mahasiswa pascasarjana di University of California di Berkeley, dan Profesor Brad Barbernya meneliti akun-akun dari 10.000 rekening perdagangan broker-diskon antara tahun 1987 sampai 1993..Later, Odean mengulangi penelitian ini dalam skala yang jauh lebih besar, dalam pengulangan tersebut dia memeriksa catatan dari 66.465 rumah tangga dari tahun 1991 sampai 1996 Jadi secara total, dia melihat sejumlah besar akun, dan sejumlah besar perdagangan Kesimpulan dari masing-masing Studi yang hampir identik perdagangan menyakiti kekayaan Anda. Ukraina menemukan bahwa sebagai sebuah kelompok semua investor amatir underperform pasar karena lebih tinggi daripada biaya perdagangan yang diperlukan Tapi 20 dari pedagang dengan omset tertinggi underperformed yang paling Dalam sampel, sementara pasar naik sebuah Disetahunkan 17 1 selama periode tersebut, rata-rata pedagang investor dengan omset 80 pa kembali 15 3, namun 20 dengan omset tertinggi, rata-rata 283 pa, hanya mendapat 10 pa. Studi ini adalah perf Dengan dibantu oleh klien dari broker barang non-diskon. Bagaimana dengan angka perubahan untuk pialang internet ultra murah. Menurut Odean, komisi tidak terlalu banyak merupakan bagian penting dari alasan mengapa pedagang aktif memiliki kinerja terburuk, namun bogeyman utama adalah Bid ask spread Bahkan Odean percaya bahwa pedagang sebagai kelompok sekarang melakukan hal yang lebih buruk daripada yang mereka lakukan di hari pialang diskon lama karena omset telah meningkat bahkan lebih banyak lagi. Ukraina menawarkan contoh berikut Perdagangan rata-rata dalam sampelnya kira-kira berukuran 13.000 Trading melalui broker diskon, seorang investor mungkin telah membayar 60 atau lebih dalam perjalanan pulang-pergi komisi, atau 30 untuk pembelian dan 30 untuk penjualan Tetapi menurut perkiraan Odean, investor biasa juga kehilangan 1 penuh ke bid-ask spread - atau 130 pada pembelian 13.000 tipikal ini. Jika investor beralih ke broker online yang melakukan perdagangan hanya 10, biaya perjalanan pulang pergi hanya 20 - namun spread tersebut masih berjumlah kerugian 130, untuk sebuah Total biaya transaksi 150. Tidak diragukan lagi 150 lebih murah dari 190 tapi hanya sekitar 21 kurang, bukan 66 yang mungkin diyakini oleh investor sehingga dia menabung. Bahkan penghematan ini bisa ditelan jika investor memilih untuk mengubah perilaku mereka. Dan perdagangan lebih sering sebagai akibat dari komisi yang lebih rendah. Kenyataannya, Odean memang menemukan kecenderungan untuk melakukan perdagangan lebih banyak saat pedagang beralih ke broker web murah. Dalam studi kedua, dia memeriksa catatan perdagangan 1.600 pedagang yang beralih dari telepon diskon. Perdagangan ke perdagangan web diskon dalam Dia menemukan bahwa omset meningkat sepertiga dan pedagang melipatgandakan eksposur mereka terhadap saham spekulatif. Konon, pedagang telepon dua kali lebih mungkin sebagai pedagang web untuk membeli saham besar, dibandingkan dengan pedagang web yang rata-rata lebih banyak terkonsentrasi. Pada perdagangan saham spekulatif kecil di NASDAQ dan bursa kecil lainnya. Temuan paling menarik dari penelitian Odean adalah bahwa pedagang berperforma buruk sebagai sebuah kelompok bahkan setelah mengambil ou T biaya perdagangan Rata-rata, saham yang dijual pedagang ini mengungguli pasar, dan yang mereka beli berkinerja buruk di pasar Satu tahun setelah setiap perdagangan, rata-rata investor mengalami lebih dari 9 orang miskin daripada jika dia tidak melakukan apa-apa Dua tahun kemudian, hasilnya adalah Bahkan lebih buruk lagi. Odean menemukan bahwa jika para pedagang tidak menyerahkan portofolio mereka, mereka akan melakukannya dengan lebih baik Sebenarnya sebagai kelompok mereka cenderung membeli saham perusahaan kecil dan bernilai, yang pada saat itu merupakan sektor yang menguntungkan Saham yang mereka pilih Rata-rata sebenarnya mengungguli pasar, namun para pedagang menyambar kekalahan dari rahang kemenangan dengan secara sistematis menjual saham terbaik mereka lebih awal dan memegang saham terburuk mereka terlalu lama. Mengapa pedagang melakukannya dengan sangat buruk Odean percaya ada beberapa alasan Pertama, sebagian besar pedagang Membeli saham yang telah meningkat atau turun secara substansial dalam enam bulan sebelum membeli Karena terlalu banyak saham yang harus diikuti, sebagian besar pedagang beralih ke orang-orang yang menarik perhatian mereka. Perhatian terhadap gerakan tajam atau perhatian media Momentum trader melompat ke kenaikan terbesar dan pemburu barang murah menumpuk dalam masalah bermasalah Dalam kedua kasus tersebut, mereka menangani sejumlah isu yang relatif kecil di mata publik, dan mengikuti kerumunan jarang sukses. Strategi perdagangan. Temuan lain adalah bahwa para pedagang di kelompok tersebut memiliki kecenderungan kuat untuk menjual saham yang salah. Odean mengatakan bahwa para pedagang lebih memilih untuk menjual investasi mereka yang menang dan mempertahankan investasi mereka yang kalah, walaupun investasi yang mereka jual akhirnya mengungguli pecundang. Mereka terus memegang Menjual pecundang untuk mengakui bahwa Anda telah membuat kesalahan Pedagang membenci itu, mereka lebih memilih untuk menjual saham dengan keuntungan, yang membuat mereka merasa seperti pemenang, sebagai hasilnya pedagang secara sistematis menyingkirkan persediaan bagus dari portofolio mereka dan Orang miskin yang tertinggal. Olan kemudian mengulangi penelitian ini dengan ukuran sampel yang jauh lebih besar. Studi selanjutnya membuktikan adanya korelasi kuat antara th E jumlah investor dagang dan pedagang Hyperactive mereka yang kembali, dengan rata-rata 1.000 omset tahunan, hanya memiliki pengembalian setelah imbal hasil 11 tahunan. Investor yang paling tidak aktif hampir tidak diperdagangkan, mengubah hanya 2 3 kepemilikan mereka setiap tahun, namun mereka berhasil Pemukulan pasar 18 5 pengembalian tahunan Indeks SP 500 naik 16 9 per tahun selama periode tersebut Perhatikan bahwa angka-angka ini tidak termasuk hukuman pajak yang dibayarkan oleh pedagang berat. Namun, bagaimana jika pedagang hiperaktif cenderung memilih saham yang lebih buruk, sehingga kinerjanya lebih rendah Karena ini, daripada trading mereka Tidak, menurut penelitian Jika trader yang paling tidak aktif tidak melakukan trading, imbal hasil mereka hanya akan menjadi 0 25 lebih baik setiap tahun, sedangkan trader berat akan melakukan lebih dari tujuh persen poin lebih baik. Setiap tahun. Tidak mengherankan, Barber dan Odean menyimpulkan, pesan utama kami adalah bahwa perdagangan itu berbahaya bagi kekayaan Anda. Halaman rumah Odean, dengan sebagian besar atau seluruh dokumennya ada di dalamnya. H membaca surat-suratnya, bahkan jika Anda berniat untuk berdagang, Anda akan menemukan wawasannya mengapa orang-orang berkinerja buruk. David, Inc Study of Mutual Fund Investors. Another study, Analisis Kuantitatif Perilaku Investor mungkin tidak begitu banyak kritik terhadap trader. Namun, lebih banyak kritik terhadap investor berorientasi jangka pendek dilakukan oleh Dalbar, Inc, dan diperbarui beberapa kali dengan data baru baru-baru ini seperti tahun lalu. Studi ini menemukan bahwa investor sangat tidak kompeten dalam keputusan penentuan waktu sehingga mereka berhasil mengimbangi dana yang mereka beli. Dengan margin yang sangat besar. Pertanyaan utama investor adalah bahwa mereka adalah pemburu kinerja Mereka memindahkan uang mereka ke dalam dana dengan kinerja tertinggi di masa lalu dan melangkah ke pintu saat dana di bawah kinerja Biasanya ini berarti membeli tinggi, menjual kesimpulan Dalbar yang rendah adalah. Dana perorangan Investor mendapatkan hasil yang jauh lebih rendah daripada yang dilaporkan karena perilaku investasi mereka Dalam usaha mereka untuk memperoleh keuntungan pasar saham yang mengesankan, investor melompat o N kereta musik terlambat, dan beralih masuk dan keluar dari dana mencoba untuk waktu pasar Dengan tidak tersisa diinvestasikan untuk seluruh periode, mereka tidak mendapatkan keuntungan dari mayoritas penghargaan pasar ekuitas. Bagaimana buruk adalah kinerja yang kurang baik Nah, terima kasih untuk semua Kerja keras, analisis teknis dan penelitian fundamental yang ditawarkan oleh investor reksa dana di Amerika, selama tujuh belas tahun yang berakhir pada tahun 2001, investor ekuitas rata-rata hanya memperoleh sekitar enam persen dari keuntungan SP 500. Menariknya, dalam versi 1993 Studi Dalbar membagi investor menjadi dua kelompok tenaga penjualan yang disarankan dan tidak disarankan. Penelitian tersebut kemudian menguji hasil investasi untuk dana ekuitas dan obligasi untuk periode sepuluh tahun Januari 1984 sampai September 1993. Kelompok pertama adalah klien penasihat keuangan, Yang terakhir adalah investor DIY Hasilnya, yang jelas telah diperah untuk semua yang layak dilakukan oleh industri penasihat keuangan adalah bahwa kelompok yang disarankan memiliki total pengembalian 90 21 persen w Jika orang-orang yang melakukannya hanya menguasai 70 23 persen yang dimainkan Dalbar, Keuntungan dapat dilacak langsung pada periode retensi yang lebih lama dan reaksi yang berkurang terhadap perubahan kondisi pasar. Industri ini membuat banyak dari temuan tersebut, namun saya memiliki bom untuk keduanya. Kelompok pada periode yang sama ini, indeks S P500 kembali 293 Jadi, kita memiliki hierarki di sini, tampaknya penasihat profesional mengalahkan investor amatir, yang mungkin tidak terlalu mengejutkan, namun dana indeks mengalahkan investor profesional dengan marjin yang jauh lebih besar. Alasan untuk menghindari Trading. Beberapa mungkin merasa tidak enak hati bahwa saya telah memilih untuk memulai sebuah FAQ perdagangan dengan artikel yang bermusuhan dengan perdagangan, tapi saya pikir penting bagi setiap orang untuk menyadari fakta-fakta ini Jika saya tidak menunjukkan kesulitan ini, maka saya cukup yakin sistem Salesman dan pialang churn yang tinggi tidak akan melakukannya. Pertukaran adalah permainan jumlah negatif Ada dua cara untuk mengalahkan dana indeks, yang saya ambil untuk menjadi strategi investasi standar yang dapat digunakan siapa pun dan karenanya Ea alternatif yang layak untuk trading. trader spekulatif dapat mengambil uang dari pedagang lain, melalui waktu Keuntungan perdagangan berasal dari pedagang kurang sukses Untuk setiap trader sukses yang mengalahkan pasar akan ada yang tidak berhasil yang rata-rata underperform indeks dengan jumlah yang sama Investor dapat dengan hati-hati memilih saham mana yang akan dibeli Mereka akan mendapatkan hasil yang superior dibandingkan dengan indeks karena mereka memilih untuk tidak menahan saham yang diminati oleh investor yang inferior. Pikirkan tentang hal ini, seseorang memegang semua saham tak berguna dan akan ditinggalkan memegang tas setelah Investor yang baik telah menjualnya Untuk setiap investor sukses yang mengalahkan pasar, akan ada yang tidak berhasil yang rata-rata kinerjanya kurang baik dari indeks dengan jumlah yang sama. Kesuksesan, di atas rata-rata individu hanya ada dengan mengorbankan orang yang tidak berhasil di bawah rata-rata Jelas bahwa tidak mungkin bagi semua orang. Untuk di atas rata-rata, maka ingatlah ini, rata-rata keseluruhan kelompok akan mendapatkan kinerja indeks, minus c Osts Secara matematis tidak mungkin ada lebih sedikit jumlah orang yang mengalahkan indeks karena perdagangannya mahal. Jika perdagangan tidak memerlukan biaya apapun, separuh dari semua trader akan mengalahkan indeks dan setengahnya akan kehilangan salah satu dari itu, atau sebuah Hanya sedikit yang akan menghasilkan banyak dan mayoritas hanya akan menghasilkan sedikit kurang dari rata-rata Tapi seperti yang saya katakan, perdagangan sangat mahal, dan semakin banyak kelompok pedagang memperdagangkan kinerja kolektif mereka yang lebih baik Tentu, beberapa jenius perdagangan masih dapat melakukannya dengan baik. , Tapi hanya karena sebagian besar pedagang kehilangan banyak uang. Banyak pembaca merujuk dengan penghinaan terhadap pedagang yang tidak canggih, menyebut mereka ternak dan makanan ternak meriam dan nama lain Jelas pembaca ini memiliki pendapat yang sangat tinggi tentang diri mereka sendiri, mereka merasa mereka adalah anggota Dari elite itu. Tapi sampai 8.000 hedge fund dan berkali-kali jumlah trader profesional purna waktu, pialang dan pengelola uang, jutaan orang kecil di luar sana dipersenjatai dengan salinan Metastock dan beberapa Dary. L Buku Guppy yang merupakan makanan ternak Ini termasuk pembaca, termasuk banyak orang di sana yang mengolok-olok pengindeksan. Saya memiliki kekecewaan lain untuk Anda bahwa sistem pajak menghukum pedagang Jika Anda memegang saham lebih dari satu tahun, Anda harus membayar pajak keuntungan modal setengah marjinal Anda. Tingkat pajak, tapi berjualan sebelum 12 bulan dan Anda membayar CGT dengan tarif pajak marjinal penuh Anda. Tidak hanya kesempatan Anda untuk mencapai kinerja rata-rata di atas rata-rata menurun saat Anda melakukan perdagangan, namun Anda mendapatkan gaji dua kali lipat tingkat suku bunga Kami tahu bahwa hanya sangat Sebagian kecil pedagang melakukan investasi lebih baik daripada investor indeks pasif sebelum pajak, namun faktor dalam hukuman pajak dan Anda akan melihat bahwa hal itu menjadi semakin sulit. Dengan memperhitungkan pajak, bagi seorang pedagang untuk melakukan tidak lebih dari sekedar mencocokkan setelah pengembalian pajak dari index fund investment it is not sufficient to beat the market by a small amount, it is necessary to comprehensively trounce it To beat an index fund after taxes you must massively outperform the index with your trading We know that only a minority of traders are going to outperform the index at all, but how many will massively outperform No doubt by now you ll get the message I m trying to convey not many at all. So it is obvious you have practically no chance of beating the market by trading The probability of you succeeding in this, to the extent of achieving the apparently modest goal of beating a lazy index fund investor after tax, is virtually nil. If you like those odds, and apparently most readers love those odds because most of them mock the idea of settling for mere index returns, then read on.95 of retail Forex traders lose money Is this Fact, or Fiction. There is a well known statistic being passed around the Forex community and there is a good chance you ve come across it, possibly numerous times Basically, it says that 95 of Forex traders lose money. For traders who are chasing their dream of becoming a full time Forex trader or at least trying to achieve even part time trading success this statement can be a bit of a demotivator. If 95 are blowing up their accounts, the statistics imply you also will be become one of the losses. It s not a very comforting thought is it In a world of failing traders, what steps can you take to become the minority who survives and make consistent returns from Forex trading. In this article I want to do some investigating We are going to try verify the claim 95 of Forex traders lose money We re going to go over some supporting evidence, and attempt to conclude if this just a phrase used for scare tactics, or if it is actually based on fact. Special thanks to War Room member kin marketstudent for helping me compile the information contained in today s article. Let s go through some of the factual evidence we ve dug up that supports the statement. The Evidence that Forex traders lose money. China bans Forex margin trading. According to a Reuters article in 2008, the China Banking Regulatory Commission banned banks from offering Forex margin trading t o their clients. Eighty to 90 percent of players in Forex traders lose money, through banks providing the service were generally making a profit from it, the banking regulator said. This quote is useful but far from conclusive. The profitability of day traders. The profitability of day traders was an article written by Douglas J Jordan and J David Diltz, published in the Financial Analysts Journal Vol 59, No 6, Nov-Dec 2003.If you want to read the full article you will have to pay for it, but the abstract reads as follows. We used two distinct methodologies to examine the profitability of a sample of U S day traders The results show that about twice as many day traders lose money as make money Approximately 20 percent of sample day traders were more than marginally profitable We found evidence that day-trader profitability is related to movements in the Nasdaq Composite Index. All this really does is support our own views on day trading It s harder and riskier than the longer term swing trad ing But, this still isn t enough to nail down the statistic as fact, so let s move on. The Cross-Section of Speculator Skill Evidence from Taiwan. The Cross-Section of Speculator Skill Evidence from Taiwan is a research paper by Barber, Lee, Liu and Odean published on 14th February 2011 on the Social Science Research Network. Using data from the Taiwanese Stock Exchange, the performance of day traders over the 15 year period 1992-2006 was evaluated. The following quote on page 13 is particularly relevant. In the average year, 360,000 individuals engage in day trading While about 13 earn profits net of fees in the typical year, the results of our analysis suggest that less than 2 of day traders 1,000 out of 360,000 are able to outperform consistently. This is a very alarming statistic, only 2 of these traders were consistently profitable Remember though, this study only had day traders under the microscope, and didn t look any other style of traders Let s look at some evidence from the broker s themselves, which factors in a broader range of trading styles. U S Commodity Futures Trading Commission Regulations. The U S Commodity Futures Trading Commission CFTC introduced new regulation in October 2010 forcing US brokers to lower the amount of leverage that can be offered to customers maximum limits are 50 1 on major currency pairs and 20 1 on other currency pairs. US forex brokers are now also forced to disclose the percentage of active forex accounts that are actually profitable. Michael Greenberg of Forex Magnates has compiled the data for the first quarter of 2011.The Magnates chart tells us that during the first quarter of 2011, the US brokers listed here reported that an average of.25 of their active accounts where in profit This is a dramatic increase in percentages that we ve seen in the other reports we previous covered This data however is still not good enough to start base conclusions that 95 of Forex traders lose money on for the following reasons. The chart only show s a handful of US brokers Aside from Africa, the US actually has the smallest of the retail trading population. The data collected is only really from a 4 month period, which is hardly anything. The data doesn t specify if withdrawals and deposits are taken into consideration. The data doesn t show if those accounts are experiencing growth over time, or are just simply up from their previous 4 month figure. To reinforce on the last point, are these profitable accounts over their high watermark line , or have they suffered a massive loss, but recovered a small percentage within the 4 month period therefore considered in profit. The new CFTC disclosure requirements are certainly a step in the right direction towards greater transparency in the Forex industry However, it is important to treat the percentage figures of winning and losing accounts with a degree of skepticism for the following reasons we just stated. All of the brokers will be eager to present themselves in the best possible light so it would not be too surprising if the figures were subject to some manipulation If a broker can claim to have a higher percentage of winning accounts than their rivals, this may attract new customers to open up accounts with them. It is important to note that the data only includes active accounts and the definition of active maybe interpreted differently by different brokers We have no idea how many new accounts blew up in their first few months of Forex trading and subsequently became inactive and thus were omitted. Oanda in particular have been guilty of some creative accounting their data from Q3 2010 showed that a spectacular 51 of accounts were profitable, 18 more than the nearest competitor However it turned out that included in their definition of active accounts were accounts that contained no trading activity but had simply accrued interest on the account balance. The CFTC quickly put their foot down and 6 months later we see that the percentage of winning accounts at Oanda has dropped to 38 1.As disclosure requirements tighten in the future, these winning percentages are expected to fall even further. What conclusions we can make from the data. Even with all the digging we ve done, and all the evidence we have sifted through, we simply still don t have enough data to conclusive confirm that 95 of Forex traders lose money. One thing is for sure, it doesn t look good for day traders The evidence is basically conclusive that only.2 of day traders can actually consistently turn a profit This is no surprise to us though, we know day trading is a really stressful and tiring way to approach the market. Day traders are required to sit in front of the computer for hours on end, staring at price charts while waiting for an intraday trade opportunity to present itself Most of the day trades are placed with the intention of quickly being in and out of the market over a span of a few hours With so many retail Forex traders engaging in scalping or day trading strategies, I am not surprised that most Forex traders lose money. This combination of high frequency trading and staring at charts all day is very psychologically taxing Most day traders are failing because their patience wears too thin They begin to do silly things in the market out of boredom, fatigue or frustration Swing traders like us, use the core movements from the higher time frames to take easy, longer term trades Swing traders ride out the dominant market direction it much stress-less fashion. By doing things like trading with the daily time frame we don t have to spend much time in front of the charts This gives us the freedom to set our trades, and not have the burden of constantly monitoring them for hours The idea is to be less involved with the market as a whole. Even though we don t have anything 100 conclusive to support 95 Forex traders lose money it s pretty safe to conclude that a high percentage of Forex traders lose money. We have a few variations of this statement that we belie ve to be justified. 100 of traders blow their first trading account. 95 of Forex traders lose money during their first year of trading. High frequency traders find it harder to make money consistently than long term traders. How can you avoid becoming a statistic. All of the anecdotal and hard evidence examined in this article strongly suggests that Forex traders lose money and the vast majority of traders are not profitable It is not really possible to arrive at an exact percentage, but we can see that the most conservative estimate suggests that 87 of traders lose So the soft quoted 95 statistic may be a little high, but it is fair to say that trading is NOT easy. So how can we as traders avoid being one of the losing statistics What are the small minority of successful traders doing that everybody else isn t. By working with many traders in our Price Action War Room we re always on the front line witnessing how traders are shooting themselves in the foot Traders who struggle to move forward, and hindering any positive progress with their trading goals all seem to share some similarities. The trader doesn t have realistic expectations about the market. The trader is over complicating their analysis, trying to make sense of too many variables or looking too deep into things. The trader is in a bad financial situation and trading with real money that is needed for bills, mortgage etc. The trader is not using positive geared money management to ensure winning trades outperform losers. The trader is trading on low time frames, chasing price and market noise instead of using more reliable data from the higher time frames. The trader is spending way too much time in front of the charts and over trading. The trader has no trading plan and therefore no consistency. The trader opens positions during news releases hoping to catch big moves. The trader doesn t know how to take a loss. The trader is impatient and doesn t wait for high probability trade setups. When you read through that list, how many points are you guilty of I would bet at least a few Don t worry, you re not the only one These are everyday issues which tra ders struggle with and really do hinder their progress of becoming a profitable trader. Most of the problems are generally a result of psychological weakness Traders are giving in to their inner demons Unfortunately most traders never build on the character and psychological traits needed to fight these inner temptations You really need step up, and work on personal improvement to build what it takes to be a good trader. It s like a smoker, drug user, or an alcoholic working to overcome their addictions Deep down they know it s destroying their health and lives If they re not determined and focused enough, it s easy to fall back into bad habits and start a vicious cycle all over again. The market will rip you apart, psychologically, in ways you never thought possible The financial sector is a cruel world which can easily reduce a grown man to tears It s important that you understand what your weaknesses are, and face them head on You re going to have ups and downs in your trading journey, but just remember. What doesn t kill you will make you stronger. Do yourself a favor and go back through your history and study your losing trades Get a pen and paper and make a list of what you think you did wrong when executing each of those losing trades. I bet you will see a common problem reoccurring on that list Have that list in front of you when you go to take your next trade Use this list as a nice reminder of last few times you ve traded against your better judgement Hopefully that it will deter you from making the same mistake again. Start to tackle your trading weaknesses and self improving to make yourself into a better trader Give yourself a higher chance of not becoming a fatal statistic Most Forex traders lose money, but that doesn t mean you have to If you re struggling to find a trading system that doesn t require you to sit in front of the Forex charts all day. You maybe be interested in our end of day price action strategies Stop by the war room information page and check out our price ac tion course details. Best of luck to you on your trading journey. Did you enjoy this article It would mean a lot to me if you could share it Please also leave your thoughts in the comment section below. The anatomy of the global FX market through the lens of the 2013 Triennial Survey. Trading in the FX market reached an all-time high of 5 3 trillion per day in April 2013, a 35 increase relative to 2010 Non-dealer financial institutions, including smaller banks, institutional investors and hedge funds, have grown into the largest and most active counterparty segment The once clear-cut divide between inter-dealer and customer trading is gone Technological change has increased the connectivity of participants, bringing down search costs A new form of hot potato trading has emerged where dealers no longer play an exclusive role 1.JEL classification F31, G12, G15, C42, C82.This article explores the anatomy of the global foreign exchange FX market, drawing on the 2013 Triennial Central Bank Surv ey of Foreign Exchange and Derivatives Market Activity in short, the Triennial The Triennial covers 53 countries and represents the most comprehensive effort to collect detailed and globally consistent information on FX trading activity and market structure 2.Global FX turnover climbed to 5 3 trillion per day in 2013 from 4 0 trillion in 2010 Graph 1 left-hand panel This 35 rise outpaced the 20 rise from 2007 to 2010, but falls short of the strong increase in the pre-crisis period 2004-07.We study the structural drivers and trends behind the growing FX volumes New counterparty information collected in the 2013 Triennial provides a much more detailed picture than before of the trading patterns of non-dealer financial institutions such as lower-tier banks, institutional investors and hedge funds and their contribution to turnover Improved data on execution methods further enable us to give a better description of the current state of market structure. Non-dealer financial institutions wer e the major drivers of FX turnover growth over the past three years, confirming the trend in prior surveys Graph 1 right-hand panel The inter-dealer market, by contrast, has grown more slowly, and the trading volume of non-financials mostly corporates has actually contracted These trends are most visible in the main FX trading centres, London and New York, where close to two thirds of all deals involved non-dealer financial counterparties. The climb in FX turnover between 2010 and 2013 appears to have been mostly a by-product of the increasing diversification of international asset portfolios rather than a rise in interest in FX as an asset class in its own right 3 With yields in advanced economies at record lows, investors increasingly diversified into riskier assets such as international equities or local currency emerging market bonds By contrast, returns on currency carry trades narrowly defined and other quantitative FX investment strategies were quite unattractive in the run-up to the 2013 survey, suggesting that they were unlikely to have been significant drivers of turnover. The FX market has become less dealer-centric, to the point where there is no longer a distinct inter-dealer-only market A key driver has been the proliferation of prime brokerage see glossary at the end of the article , allowing smaller banks, hedge funds and other players to participate more actively The evolving market structure accommodates a larger diversity, from high-frequency traders, using computers to implement trading strategies at the millisecond frequency, to the private individual retail FX investor Trading costs have continued to drop, thus attracting new participants and making more strategies profitable This trend started with the major currencies, and more recently reached previously less liquid currencies, especially emerging market currencies. Today s market structure involves a more active participation of non-dealer financial institutions in the trading process Trading activity remains fragmented, but aggregator platforms allow end users and dealers to connect to a variety of trading venues and counterparties of their choice With more counterparties connected to each other, search costs have decreased and the velocity of trading has increased The traditional market structure based on dealer-customer relationships has given way to a trading network topology where both banks and non-banks act as liquidity providers This is effectively a form of hot potato trading, but where dealers are no longer necessarily at the centre 4.In the next section, we start with a bird s eye view of the main facts to shed light on FX turnover growth since 2010 We then put the trading patterns of financial counterparties and recent changes in market structure under the microscope Finally, we explore underlying drivers of FX trading volumes between 2010 and 2013 in greater detail. FX turnover growth a look at the main facts. Trading in currency markets is increasingly dominated by financial institutions outside the dealer community other financial institutions in the survey terminology Transactions with non-dealer financial counterparties grew by 48 to 2 8 trillion per day in 2013, up from 1 9 trillion in 2010, and accounted for roughly two thirds of the rise in the total Table 1 These non-dealer financial institutions are very heterogeneous in their trading motives, patterns and horizons They include lower-tier banks, institutional investors eg pension funds and mutual funds , hedge funds, high-frequency trading HFT firms and official sector financial institutions eg central banks or sovereign wealth funds. Non-financial customers - mostly comprising corporations, but also governments and high net worth individuals - accounted for only 9 of turnover, the lowest level since the inception of the Triennial in 1989 Reasons for their shrinkage include the sluggish recovery from the crisis, low cross-border merger and acquisition activity and reduced hedging needs , as major currency pairs mostly traded in a narrow range over the past three years Another key factor is more sophisticated management of FX exposures by multinational companies Firms are increasingly centralising their corporate treasury function, which allows hedging costs to be reduced by netting positions internally. The declining importance of inter-dealer trading is the flip side of the growing role of non-dealer financial institutions Table 1 The inter-dealer share is now down to only 39 , much lower than the 63 in the late 1990s The primary reason is that major dealing banks net more trades internally Due to higher industry concentration, top-tier dealers are able to match more customer trades directly on their own books This reduces the need to offload inventory imbalances and hedge risk via the traditional inter-dealer market. Trading activity since 2010 has risen fairly evenly across instruments Graph 1 left-hand panel, and Table 1 That said, spot was the largest contributor to turnover growth, accounting for 41 of the turnover rise At 2 05 trillion per day, spot trading almost reached the same volume as FX swaps 2 23 trillion 5 Turnover in FX OTC derivatives such as forwards up 43 and FX options up 63 also grew strongly, albeit from a lower base 6.Trading by non-dealer financials under the microscope. Non-dealer financial institutions have become the most active participants in currency markets Who exactly are these players What do they trade and why do they trade FX With the new and more granular description of the group of non-dealer financial counterparties in the 2013 Triennial, we can now shed light on these important yet hitherto unanswered questions. Who are the key non-dealer financials and what do they trade. A significant fraction of dealers transactions with non-dealer financial customers is with lower-tier banks While these non-reporting banks tend to trade smaller amounts and or only sporadically, in aggregate they account for roughly one quarte r of global FX volumes Table 2 Smaller banks do not engage in market-making, but mostly serve as clients of the large FX dealing banks As they find it hard to rival dealers in offering competitive quotes in major currencies, they concentrate on niche business and mostly exploit their competitive edge vis--vis local clients 7 Like dealers, they extensively trade short-tenor FX swaps less than one week , which are commonly used for short-term liquidity management. The most significant non-bank FX market participants are professional asset management firms, captured under the two labels institutional investors eg mutual funds, pension funds and insurance companies and hedge funds The two groups each accounted for about 11 of turnover Table 2.Institutional investors differ from hedge funds not only in terms of their investment styles, horizons and primary trade motives, but also the mix of instruments they trade These counterparties - also often labelled real money investors - frequently tr ansact in FX markets, as a by-product of rebalancing portfolios of core assets, such as international bonds and equities They were behind a large fraction 19 of trading volumes in forward contracts Table 2 , which they primarily use to hedge international bond and to a lesser extent equity portfolios The management of currency exposure is often passive, requiring only a periodic resetting of the hedges, but can also take a more active form, resembling strategies of hedge funds 8.Hedge funds are especially active in options markets, accounting for 21 of the options volume Table 2 Options provide them with a convenient way to take leveraged positions to express their directional views on exchange rate movements and volatility Some of the more actively trading hedge funds and proprietary trading firms also specialise in algorithmic and high-frequency strategies in spot markets Hedge funds were behind significant volumes in both spot and forwards, accounting for 14 and 17 of total volumes, respectively. FX trading by official sector financial institutions, such as central banks and sovereign wealth funds, contributed only marginally less than 1 according to the most recent Triennial data to global FX market turnover This small share notwithstanding, these institutions can have a strong impact on prices when they are in the market. Non-dealer financials and the geography of FX trading. The trading of non-dealer financials such as institutional investors and hedge funds is concentrated in a few locations, in particular London and New York, where major dealers have their main FX desks Table 2 With a share of over 60 of global turnover, these two locations are the centre of gravity of the market Dealers trading with non-dealer financial customers exceeds that with non-financial clients by a factor greater than 10 in these centres Graph 2 centre panel , much higher than in other key FX trading locations, eg Singapore, Tokyo and Hong Kong SAR Investors seeking best trade executi on often prefer to trade via sales and trading desks see glossary in London or New York even though these investors may have their head office in other time zones This is because liquidity in currency markets is typically highest at the London open and in the overlapping hours of London and New York. Prime brokerage has been a crucial driver of the concentration of trading, as such arrangements are typically offered via major investment banks in London or New York Graph 2 right-hand panel Through a prime brokerage relationship with a dealer, non-dealer financials gain access to institutional platforms such as Reuters Matching, EBS or other electronic communications networks ECNs and can trade anonymously with dealers and other counterparties in the prime broker s name Prime-brokered trades accounted for 23 of total FX volume in the United Kingdom and the United States, against an average of 6 in Asian and other FX trading locations In spot, the share of prime-brokered trades by US and U K dealers was even higher, at 38 Graph 2 right-hand panel The rise in electronic and algorithmic trading also contributed significantly to the concentration in centres For certain types of algorithmic trading, speed advantages at the millisecond level are critical Such high-frequency trading requires co-location close to the main servers of electronic platforms typically in the vicinity of London and in New Jersey. Trading by financials and the rise of emerging market currencies. The trend towards more active FX trading by non-dealer financial institutions and a concentration in financial centres is particularly visible for emerging market EM currencies A decade ago, EM currency trading mostly involved local counterparties on at least one side of the transaction eg McCauley and Scatigna 2011 Now, trading of EM currencies is increasingly conducted offshore Graph 3 left-hand panel It has especially been non-dealer financials often trading out of financial centres that have driven this inte rnationalisation trend Graph 3 centre panel. The ease and costs of trading minor currencies have improved significantly in this process Transaction costs in EM currencies, measured by bid-ask spreads, have steadily declined and converged to almost the levels for developed currencies Graph 3 right-hand panel As liquidity in EM currencies has improved, these markets have attracted the attention of international investors Naturally, this has also boosted the share of key EM currencies in total global turnover, from 12 in 2007 to 17 in 2013 The strong growth is particularly visible in the case of the Mexican peso, whose market share now exceeds that of several well established advanced economy currencies Another case is the renminbi, where most of the 250 growth is due to a surge in offshore trading China set itself to promote more international use of its currency and introduced offshore renminbi CNH in 2010 Ehlers and Packer 2013 9.The evolving market structure of FX trading. The growing p articipation of non-dealer financial institutions has been facilitated by the availability of alternative electronic platforms The FX market of the 1990s was a two-tier market, with the inter-dealer market as clearly separate turf This has changed There is no distinct inter-dealer market any more, but a coexistence of various trading venues where also non-banks actively engage in market-making. In today s market structure, electronic trading dominates It is the preferred trading channel, with a share above 50 for all customer segments Table 3 , and is available for all instruments and investors across the globe This market-wide presence, together with its slowing expansion, suggests that electronic trading has matured Spot is the segment with by far the highest fraction of trades conducted electronically, at 64 10 Despite the prevalence of electronic trading, voice via the phone and relationship trading remain sizeable in some segments Table 3 The voice contact may, for instance, provid e advice on alternative order execution strategies or ways to implement a trade idea It may also help to avoid high-frequency traders as a counterparty, or to ensure execution in a busy market Voice remains the preferred execution method for more complex FX derivatives such as options, where 62 of the deals were done by phone. The emerging microstructure caters to the demands of a more diverse set of market participants Non-financial institutions mostly prefer direct contact with their relationship bank, either via the phone or via a single-bank platform Financial customers are less loyal to their dealer than non-financials and have more dispersed trading patterns Table 3 They often trade either directly with dealers electronically eg via Bloomberg Tradebook or direct electronic price streams , or indirectly via multi-bank platforms and electronic brokerage systems that were previously the exclusive venues of inter-dealer trading EBS and Reuters Matching. The shift away from a clearly de lineated inter-dealer market is reflected in the execution methods data in the Triennial On EBS and Reuters Matching, which used to be dealer-only electronic platforms, the absolute volume of dealers trading with other financial customers is actually 17 larger than the volumes between dealers There are two main reasons for this shift First, as a response to competition from multi-bank platforms eg FXall, Currenex or Hotspot , EBS and Reuters opened up to hedge funds and other customers via prime brokerage arrangements in 2004 and 2005, respectively These platforms became active arenas for proprietary trading firms specialised in high-frequency trading Second, due to increased concentration of FX flows in a handful of major banks, top-tier banks have been able to net more flows internally By internalising trades, they can benefit from the bid-ask spread without taking much risk, as offsetting customer flows come in almost continuously As these banks have effectively become deep liquidit y pools, their need to manage inventory via traditional inter-dealer venues is much reduced. The trend towards flow internalisation left its traces in the data Traditional inter-dealer venues EBS and Reuters Matching have seen their market share shrink 11 Three years ago, dealers conducted 22 of their trades with other dealers via these venues This is now down to 16 The flip side is that dealers try to attract flows to their single-bank platforms to benefit further from internalisation The share of dealer volume on single-bank platforms went up from 8 in 2010 to 14 in 2013.Underlying drivers of FX trading volumes. Why has FX turnover grown strongly over the past three years to exceed 5 trillion in April this year We now explore possible factors behind the rise in FX trading volumes in more detail, from both a macro and a micro perspective. When interpreting the 2013 Triennial, it is necessary to bear in mind that the survey month was probably the most active period of FX trading ever reco rded The monetary policy regime shift by the Bank of Japan in early April triggered a phase of exceptionally high turnover across asset classes In the months that followed, the rise in yen trading partly reversed Bech and Sobrun 2013 Without this effect, however, FX turnover would probably still have grown by about 25 12 Hence, we need to look beyond this scenario for reasons behind the growth in FX volumes. To gain a better understanding of the drivers in FX volumes between 2010 and 2013, it is important to take a closer look at the trading motives of non-dealer financials, which have grown into the most dominant players One possibility is that FX turnover rose due to growing interest in FX as a separate asset class another is that trading volumes in currency markets grew as a by-product of international portfolio investments in other asset classes It is also relevant to elicit the implications of the evolving market structure, characterised by an increased participation of non-dealer financial institutions, greater diversity and lower search costs. FX as an asset class vs international portfolio diversification. Market participants generally regard FX as an asset class in its own right To exploit profit opportunities, currency hedge funds and overlay managers see glossary , for instance, frequently pursue quantitative strategies that involve the simultaneous purchase and sale of multiple currencies eg Menkhoff et al 2012 The most popular and best known is the carry trade, which seeks to exploit interest rate differentials across a range of countries Another popular strategy is momentum trading, a bet on the continuation of exchange rate trends A less known value strategy involves buying currencies perceived to be undervalued and selling those perceived to be overvalued, where the fundamental value can be determined by, for instance, a long-run equilibrium concept like purchasing power parity. Such simple strategies have been profitable for some time Graph 4 left-hand panel , attracting new entrants into the market In particular, the carry trade provided investors with attractive and not very volatile returns in the run-up to the crisis The 2004 and 2007 surveys also reported that turnover growth largely reflected the activity of investors engaged in such strategies Galati and Melvin 2004 , Galati and Heath 2007.It is unlikely, however, that quantitative FX strategies were the main drivers of turnover growth this time Interest rate differentials have shrunk, as many central banks have been easing monetary policy Major exchange rates mostly traded in a narrow range, characterised by temporary bouts of volatility and sudden policy actions, eg during the European sovereign debt crisis Neither carry trades narrowly defined nor momentum trades performed well in these conditions Graph 4 left-hand panel Consequently, currency hedge funds suffered significant outflows over this period Graph 4 right-hand panel , with some funds going out of business 13.A mor e compelling explanation for the stronger FX activity of non-dealer financials is the rise in international diversification of asset portfolios, triggering currency trading as a by-product Over the past three years, equities provided investors with attractive returns and emerging market bond spreads dropped, while issuance in riskier bond market segments eg local currency emerging market bonds soared Not only did this give rise to the need to trade FX in larger quantities and to rebalance portfolios more frequently, but it also went hand in hand with a greater demand for hedging currency exposures Among the currencies of advanced economies, FX turnover picked up the most for countries that also saw significant equity price increases 14 In the case of emerging markets, turnover mostly increased in currencies where local bond market investments offered attractive returns Graph 5 left-hand panel In fact, for these currencies the participation of hedge funds was particularly strong Graph 5 centre panel. A new form of hot potato trading. Factors at the micro level have also contributed to the growth in FX volumes in recent years First, a greater diversity and involvement of non-dealer market participants have increased the scope for more gains from trade second, a rise in the connectivity among the different players has led to a significant drop in search costs and third, the velocity of trading has increased due to a proliferation of computerised algorithmic strategies. Recent years have seen a greater diversity of participants active in the global FX market New types of participants have entered, such as retail investors see box , high-frequency trading firms and smaller regional banks eg headquartered in emerging markets Greater activity by more heterogeneous players expands the universe of trade motives, and extends investment horizons, factors associated with more scope for trading Banerjee and Kremer 2010.Retail trading in the FX market. In the late 1990s, FX trading w as mainly the domain of large corporations and financial institutions Banks charged small retail investors prohibitively high transaction costs, as their trades were considered too tiny to be economically interesting This changed when retail-oriented platforms eg FXCM and OANDA started offering online margin brokerage accounts to private investors around 2000, streaming prices from major banks and EBS Their business model was to bundle many small trades together and lay them off in the inter-dealer market With trade sizes now much larger, dealers were willing to provide liquidity to such retail aggregators at attractive prices. Retail FX trading has since grown quickly New breakdowns collected in the 2013 Triennial show that retail trading accounted for 3 5 and 3 8 of total and spot turnover, respectively The largest retail volumes in absolute terms are in the United States and Japan That said, Japan, which has a very active retail segment, is clearly biggest in spot Graph A left-hand p anel In April 2013, retail trading in Japan accounted for 10 and 19 of total and spot, respectively Retail investors differ from institutional investors in their FX trading patterns They tend to trade directly in relatively illiquid currency pairs rather than via a vehicle currency Graph A right-hand panel. The retail figures in the 2013 Triennial are lower than the level King and Rime 2010 reported based on anecdotal evidence By design, the Triennial only captures retail trades that ultimately end up with dealers directly or indirectly through retail aggregators Trades internalised on the platform are not captured Nevertheless, this is probably not a big problem, as the scope for internalisation on retail platforms is limited The boundaries of retail are also becoming more blurred Regulatory changes eg leverage limits for margin brokerage accounts for private investors in countries such as the United States have slowed growth in the retail segment and led some platforms to target thems elves towards professional investors eg small hedge funds Furthermore, the recent poor returns on popular strategies, such as momentum and carry trades, suggest that growth in the retail segment may have slowed. For example, to conduct a carry trade, they go long in NZD JPY, instead of entering a long position in NZD USD and a short position in JPY USD Internalisation is crucial for large dealers in major pairs, where internal netting may be as high as 75-85 But the scope for internalisation is limited for retail platforms with smaller flows, predominantly in minor currencies Reports indicate that even a liquid pair such as GBP USD has an internalisation ratio of 15-20 , suggesting that the scope for internalisation in eg JPY ZAR is much lower That said, internalisation ratios can differ strongly across retail platforms and jurisdictions but are unlikely to exceed 50.The more fragmented structure that emerged after the demise of the inter-dealer market as the main pool of liquidity coul d potentially harm trading efficiency by raising search costs and exacerbating adverse selection problems Yet, one of the most significant innovations to prevent this has been the proliferation of liquidity aggregation This new form of aggregation effectively links various liquidity pools via algorithms that direct the order to a preferred venue eg the one with the lowest trading costs It also allows market participants to pick preferred counterparties and choose from which liquidity providers, both dealers and non-dealers, to receive price quotes This suggests that search costs, a salient feature of OTC markets Duffie 2012 , have significantly decreased. Widespread use of algorithmic techniques and order execution strategies allows the sharing of risk to occur faster and among more market participants throughout the network of connected venues and counterparties The opening of EBS and Reuters to non-dealers via prime brokerage agreements was a key catalyst, but today all platforms offe r ways to connect computer-generated trading Over the period 2007-13, algorithmic trading at EBS grew from 28 to 68 of volumes Graph 5 right-hand panel. Furthermore, non-dealer financial institutions are increasingly engaged in providing liquidity, as the ease of customising the types of counterparty connections reduces exposure to adverse selection risk As a consequence, a given imbalance can be matched against the quotes of more liquidity providers, both dealers and non-dealers, and shuffled faster through the network of trading venues via algorithms This has increased the velocity of trading, and effectively is a new form of hot potato trading, but no longer with only dealers at the centre. Algorithmic trading is essential to the efficiency of this process, and has become pervasive among dealers and end users alike It is, however, important to distinguish algorithmic from high-frequency trading HFT , a subset characterised by extremely short holding periods at the millisecond level an d a vast amount of trades often cancelled shortly after submission eg Markets Committee 2011 EBS estimates that around 30-35 of volume on its trading platform is HFT-driven HFT strategies can both exploit tiny, short-lived price discrepancies and provide liquidity at very high frequency benefiting from the bid-ask spread Speed is crucial, and as competition among HFT firms has increased, additional gains from being fast have diminished 15 It is thus unlikely that HFT has been a significant driver of turnover growth since 2010 16.Trading activity in the foreign exchange market reached an all-time high of 5 3 trillion in April 2013, 35 higher than in 2010 The results of the 2013 Triennial Survey confirm a trend in the market already seen in prior surveys first, a growing role of non-dealer financial institutions smaller banks, institutional investors and hedge funds second, a further internationalisation of currency trading and at the same time a rising concentration in financial centre s and lastly, a fast-evolving market structure driven by technological innovations that accommodates the diverse trading needs of market participants. New and more granular breakdowns introduced in the 2013 Triennial allow a more detailed analysis of these developments With more detailed information on non-dealer financial institutions, the linkages between their trading motives and FX turnover growth can be better understood The once clear-cut two-tier structure of the market, with separate inter-dealer and customer segments, no longer exists At the same time, the number of ways the different market participants can interconnect has increased significantly, suggesting that search costs and trading costs are now considerably reduced This has paved the way for financial customers to become liquidity providers alongside dealers Hence, financial customers contribute to increased volumes not only through their investment decisions, but also by taking part in a new hot potato trading process , where dealers no longer perform an exclusive role. Banerjee, S and I Kremer 2010 Disagreement and learning dynamic patterns of trade , Journal of Finance no 65 4 , pp 1269-1302.Bech, M and J Sobrun 2013 FX market trends before, between and beyond Triennial Surveys , BIS Quarterly Review December. Duffie, D 2012 Dark markets asset pricing and information transmission in over-the-counter markets Princeton University Press. Ehlers, T and F Packer 2013 FX and derivatives markets in emerging economies and the internationalisation of their currencies , BIS Quarterly Review December. Kroencke, T, F Schindler and A Schrimpf 2013 International diversification benefits with foreign exchange investment styles , Review of Finance forthcoming. Lyons, R 1997 A simultaneous trade model of the foreign exchange hot potato , Journal of International Economics no 42, pp 275-98.Markets Committee 2011 High frequency trading in the foreign exchange market BIS, Basel, September. Menkhoff, L, L Sarno, M Schmeling and A Schrimpf 2012 Currency momentum strategies , Journal of Financial Economics no 106 3 , pp 660-84.Pojarliev, M and R Levich 2012 A new look at currency investing CFA Institute Research Foundation Publications. Secmen, A 2012 Foreign exchange strategy based products , in J James, I Marsh and L Sarno eds , Handbook of Exchange Rates Wiley. Algorithmic trading Automated transactions where a computer algorithm decides the order submission and execution also see High-frequency trading. Bid-ask spread The difference in the price the customer receives for selling a security or currency bid and the price at which the customer buys ask. Broker A financial intermediary who matches counterparties to a transaction without being a party to the trade The broker can operate electronically electronic broker or by telephone voice broker. Buy-side Market participants that act as a customer of the dealer This need not mean that the specific entity is actually buying or selling. Dealer A financial institu tion that is entering into transactions on both sides of markets, seeking profits by taking risks in those markets and by earning a spread sometimes also referred to as sell-side. Electronic communications network ECN A computer system that facilitates electronic trading, typically in OTC markets. High-frequency trading HFT An algorithmic trading strategy that profits from incremental price movements with frequent, small trades executed in milliseconds for very short investment horizons HFT is a subset of algorithmic trading. Liquidity aggregator Technology that allows participants to stream prices from several liquidity providers pools simultaneously Computer algorithms allow customisation of the price streams, by both the liquidity provider and the receiving counterparty. Multi-bank trading platform An electronic trading system that aggregates and distributes quotes from multiple FX dealers. Overlay management The management of the currency exposure of international bond and equity portfo lios. Prime brokerage A service offered by banks that allows a client to source funding and market liquidity from a variety of executing dealers while maintaining a credit relationship, placing collateral and settling with a single entity. Reporting dealer A bank that is active as a market-maker by offering to buy or sell contracts and participates as a reporting institution in the Triennial. Retail aggregator A term used for online broker-dealers who stream quotes from the top FX dealers to customers individuals and smaller institutions and aggregate a small number of retail trades. Sales and trading desk FX deals are traditionally arranged via sales desks, which are responsible for maintaining the relationship with the customer Once an incoming client order is received, it is passed on to the trading desk for execution. Single-bank trading system A proprietary electronic trading system operated by an FX dealer for the exclusive use of its customers.1 The authors would like to thank Claudi o Borio, Stephen Cecchetti, Alain Chaboud, Richard Clarida, Dietrich Domanski, Jacob Gyntelberg, Michael King, Colin Lambert, Michael Melvin, Lukas Menkhoff, Michael Moore, Richard Olsen, Richard Payne, Lucio Sarno, Elvira Sojli, Christian Upper, Clara Vega, Philip Wooldridge and seminar participants at the Central Bank of Norway for useful comments and suggestions We greatly appreciate the feedback and insightful discussion with numerous market participants at major FX dealing banks, buy-side institutions and electronic trading platforms We are particularly grateful to Denis Ptre for compiling the data and Anamaria Illes for excellent research assistance The views expressed are those of the authors and do not necessarily reflect those of the BIS or the Central Bank of Norway.2 Due to the decentralised structure of the FX market, where deals take place over the counter OTC and where liquidity is fragmented across different venues, the market is rather opaque and quantitative informatio n on market activity quite sparse.3 Over the last 10-15 years, market participants have increasingly recognised FX as a separate asset class This is reflected in the number of products offered by major banks to institutional and retail investors Secmen 2012 , Pojarliev and Levich 2012.4 The term hot potato trading was coined by Lyons 1997 and described the passing of currency inventory imbalances due to an exogenous shift in the demand and supply of currencies around the inter-dealer market.5 To put these numbers into perspective, it is useful to compare these figures with those of other main asset classes Total trading volume in all equity markets around the world, for instance, reached roughly 300 billion per day in April this year, about 25 of the global FX spot volumes of non-dealer financial institutions.6 The surge in options reflects the period of intense yen trading in April 2013 see below almost half of the options traded that month were linked to JPY USD At the time, hedge fu nds expressed their directional views via the options market, where they accounted for 24 of turnover.7 While the 2013 Triennial is the first to collect information on lower-tier banks, stable numbers of reporting dealers suggest that it is unlikely that such trades were previously reported as inter-dealer trades According to market sources, lower-tier banks have become more active in the FX market in recent years A recent trend for these banks is to source liquidity from top-tier dealers and to effectively resell it often referred to as white-labelling to smaller, local clients, who are less attractive to top dealers.8 Management of the FX component of asset portfolios is often delegated to overlay managers see eg Pojarliev and Levich 2012 Some of the FX management can be passive and simply targeted towards removing currency risk exposure Under more active mandates, the goal is to add extra return to the portfolio and to generate diversification benefits via currency investments.9 Non - financial customers still play a larger role in renminbi trading than they do in other important EM currencies They contributed about 19 to renminbi turnover in April 2013, whereas professional asset managers institutional investors and hedge funds accounted for only 9.10 Due to the practical benefits from electronic execution, such as straight through processing, most of the voice trades are in fact eventually booked electronically Some market reporters suggest that as much as 95 of all spot transactions could in fact be electronic.11 EBS has so far experienced the largest drop in volumes Graph 5 right-hand panel , which is natural given its lead in currency pairs where the internalisation ratios are the largest as high as 75-85 for key EUR and JPY pairs As internalisation ratios increase also for the smaller currency pairs that typically have been traded at Reuters, it is likely that Reuters will also experience a decrease in volume.12 This estimate is based on the assumption that y en trading would have grown at a similar rate as trading in other important advanced economy currencies such as the US dollar, euro, pound sterling and Swiss franc.13 While quantitative currency hedge funds faced a challenging environment, macro hedge funds with a discretionary investment style performed better, according to market sources Such funds are likely to have played a significant role as drivers of yen volumes between late October 2012 and April 2013.14 The Japanese case clearly stands out, where equity prices surged more than 55 in local currency terms between October 2012 and April 2013 Given the depreciation pressure faced by the yen over this period, real money investors heavily engaged in hedging Triennial data show that institutional investors were behind 32 of the volume in yen forward contracts in April 2013.15 Some electronic platform providers have also recently introduced microstructural changes to reduce competition for speed eg by increasing minimum tick size or by modifying the treatment of incoming orders in the queue.16 According to market sources, the HFT segment in foreign exchange markets has seen a consolidation in recent years In this process, major HFT firms have mostly turned to market-making as their main strategy. Drawdown and Maximum Drawdown Explained. So we know that risk management will make us money in the long run, but now we d like to show you the other side of things What would happen if you didn t use risk management rules. Consider this example. Let s say you have a 100,000 and you lose 50,000 What percentage of your account have you lost. The answer is 50.This is what traders call a drawdown. A drawdown is the reduction of one s capital after a series of losing trades This is normally calculated by getting the difference between a relative peak in capital minus a relative trough Traders normally note this down as a percentage of their trading account. Losing Streak. In trading, we are always looking for an edge That is the whole reason why traders develop systems A trading system that is 70 profitable sounds like a very good edge to have But just because your trading system is 70 profitable, does that mean for every 100 trades you make, you will win 7 out of every 10.Not necessarily How do you know which 70 out of those 100 trades will be winners. The answer is that you don t You could lose the first 30 trades in a row and win the remaining 70 That would still give you a 70 profitable system, but you have to ask yourself, Would you still be in the game if you lost 30 trades in a row. This is why risk management is so important No matter what system you use, you will eventually have a losing streak Even professional poker players who make their living through poker go through horrible losing streaks, and yet they still end up profitable. The reason is that the good poker players practice risk management because they know that they will not win every tournament they play Instead, they only risk a small percentage of their total bankroll so that they can survive those losing streaks. This is what you must do as a trader Drawdowns are part of trading The key to being a successful forex trader is coming up with trading plan that enables you to withstand these periods of large losses And part of your trading plan is having risk management rules in place. Only risk a small percentage of your trading bankroll so that you can survive your losing streaks Remember that if you practice strict money management rules, you will become the casino and in the long run, you will always win. In the next section, we will illustrate what happens when you use proper risk management and when you don t. Save your progress by signing in and marking the lesson complete.
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