TODAY we explore the implications of global forex trading. This detailed guide assesses popular trading platforms MetaTrader 4 or 5 when choosing how to trade.
Source: Statista 2023
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In an industry where data is sparse, the rise in British pound forex trading in the United Kingdom is noteworthy. As of the end of 2019, forex trades involving the pound increased by nearly 50% compared to 2016. The daily trading volume reached an unprecedented $3.6 trillion in 2019, the highest for the period surveyed.
Importantly, this data is generally updated every three years, adding weight to these figures. No statistics are available for 2020, underscoring the 2019 data’s significance. For traders looking to capitalize on such market dynamism, understanding the differences between MT4 and MT5 trading platforms can offer unique & poignant advantages.
MetaTrader 4 (MT4) has been a leading choice for over a decade, offering a versatile workspace for trading Forex, CFDs on cryptocurrencies, indices, and more. It is known for its mobility, security, and multifunctionality. MT4 is compatible across desktop, mobile, and browser platforms, facilitating trading from multiple devices.
In contrast, MetaTrader 5 (MT5) is increasingly becoming the platform of the future. It offers advanced features like hedging, a fundamental calendar, and enhanced order management. Both platforms allow for algorithmic trading, but MT5, built on the high-performance MQL5 programming language, offers more analytical resources and simpler coding for custom indicators and trading strategies.
Key Findings from the April 2023 Forex Survey
Financial markets serve as the backbone of the global economy, affecting every facet of economic life. Driven by increasing global interconnectivity, these markets have expanded both in scale and intricacy. The foreign exchange (FX) market is a prime example.
According to the April 2023 survey by the Foreign Exchange Joint Standing Committee (FXJSC), the UK’s FX market has seen increased activity. The survey included 27 financial institutions and revealed several key insights, making it crucial for participants, whether they are using MetaTrader 4 or 5, or other platforms, to stay updated.
Let’s explore these findings and their implications further.
Broader Perspective: The BIS Triennial Central Bank Survey
For a more comprehensive understanding, it’s essential to consider the (Bank of International Settlements (BIS)) Triennial Central Bank Survey. This survey provides an extensive view of the size & structure of the global OTC markets in both FX and interest rate derivatives.
As of April 2022, the daily turnover in over the counter (OTC) foreign exchange markets escalated to an impressive $7.5 trillion, showing a 14% growth compared to the $6.6 trillion observed three years ago.
When it comes to the composition of this turnover, trading between reporting dealers accounted for $3.5 trillion, making up 46% of the global volume. This percentage is notably larger than what was seen in prior assessments.
The data underscores the fluctuating and increasingly complex landscape of innovative FX markets. For instance, the uptick in Non-Deliverable Forwards (NDFs) points to a heightened interest in tools for managing risk, particularly in a market subject to rapid shifts.
This could be an indicator for traders contemplating diversification in their investment tactics. The distinct features between trading platforms like MetaTrader 4 and MetaTrader 5 could offer various benefits, depending on one’s trading objectives.
Conclusion
While the data collected is subject to revision, it provides valuable insights into the evolving trends and behaviours within the FX markets. These trends serve as useful indicators for financial institutions, policymakers, and traders.
The increased turnover and change in preferred trading instruments signify a market that is adapting to both micro and macro-economic pressures, offering a myriad of opportunities and challenges for those involved.
As the financial landscape continues to evolve, staying abreast of these shifts is crucial for making informed decisions. Whether you’re a retail investor or a market participant in MetaTrader 4 or 5, understanding these trends can offer a competitive advantage in a market characterized by high volatility and opportunities for significant returns.
