The foreign exchange market is the largest and most traded financial market in the world. The foreign exchange market has grown to $5 trillion a day, more than 200 times the volume traded on the New York Stock Exchange. Historically, the major participants in the foreign exchange market were the central banks, multinational enterprises and large financial institutions of large countries. Although these institutions are still major players in the market, the development of online brokers and technology has enabled individual traders to enter the market and trade with large enterprises in a level playing field.
The advantage of trading foreign exchange is that the foreign exchange market is very attractive to individual traders because of its strong flow.
The mobile market means that there are a large number of buyers and sellers at any time during the trading period, which makes the performance of the trading very fast. The foreign exchange market opens 24 hours a day, five days a week. This means that we can open and close trading at any time of the day, unlike other markets such as commodities and stocks. Every day, markets around the world open one after another, starting in Sydney, then Tokyo, London, and finally New York, with the highest volume of trading in this period.
Because of the high flow in the foreign exchange market, most brokers provide higher leverage than other markets. (We will discuss this issue in more detail later.) The basic concept is that a trader only has to pay a very small proportion of the total position price. For example, if the leverage ratio is 200:1, we can invest $500 to get a position worth $100,000. As a result, smaller fluctuations in currency prices will generate greater weights, resulting in higher profits through fewer investments. However, leverage is a double-edged sword, which can also aggravate losses. Because of the high leverage ratio, a minimum of $100 can be used to open accounts with foreign exchange brokers. This entry requirement is lower than other investment categories. Foreign exchange brokers earn their income mainly through the bid-ask spreads. This is called price spreads, which are relatively small compared with the fees charged by traditional brokers because of the large volume of transactions. Because of the large scale of foreign exchange market, it is impossible for large participants to monopolize or manipulate.
In other smaller markets, large institutions can influence prices by placing orders on a daily basis. In contrast, the foreign exchange market is very large, and the impact of large institutions will not have a significant impact. Government decisions, policies and reports, as well as other global news, are most likely to be responsible for the large fluctuations in foreign exchange prices. With the participation of individual investors, the foreign exchange market has become more diverse and prosperous. However, the loss rate of individual investors in the foreign exchange market is as high as 95%. In the face of huge market and attractive opportunities, individual investors also face many problems, such as lack of financial knowledge, imperfect trading strategies and so on.
Individual investors are eager to find professional foreign exchange investment institutions to invest. However, most foreign exchange institutions exist in the form of economists and documentary communities, which can not provide investors with stable returns. Few top investment institutions offer stable and high returns, such as George Soros’s fund management company (with an average annual return of 80% for investors alone), starting with a threshold of millions of dollars.
In January 2017, Trade Hunter has been established. In order to gain more users around the world, transaction hunters not only provide long-term stable high returns, but also reduce the investment threshold, so that ordinary people can participate in the foreign exchange market without risk. Meanwhile, Trade Hunter is the first foreign exchange agent in the world to provide stable returns.