The forex market undergoes various transformations each year. The trade volumes change and the traders and institutions involved also evolve. In the previous two years, the market has experienced increased levels of volatility. In 2017, a lot of predictions were based on the possible effects of the political climate in the USA. With a shifting policy that would put more emphasis on the local economy, the rates of the dollar were expected to increase. The predictions slightly came to pass as the dollar gained a little. The effect was however short-lived since most of the policy expectations were not met.
The 2018 forex market is influenced by an entirely different set of market forces. These current market is mainly characterised by several regulatory measures that have been proposed or implemented recently. On the retail side, some changes have also been witnessed but it is mostly business as usual. Popular trading platforms like Metatrader have continued to be an integral part of daily business. Here is a quick look at the status of the market this year.
The forex market in 2018 has generally be characterised by tighter regulations. So far, a lot of attention has been put particularly on digital currencies. There have been spirited attempts to regulate and create legal frameworks that guide cryptocurrency trade in Europe and other parts of the world. In addition, there have been increased efforts to tighten the noose on brokers so that only legit entities take part in the business. Such regulations are undoubtedly great for the prospects of the forex market. Small-scale forex traders and big traders alike are bound to benefit from the improved security in the market. The transparency levels in the market have also increased due to the friendly directives. For most traders on the retail side, the promise of a stable market can only indicate better outlooks.
Just like in other realms, automation has taken a foothold in the forex market. In sharp contrast to a year ago, automated workflows now define most activities in the forex market. Automation seems to have come of age and 2018 will definitely see more growth in this sector. The movement to automation has been as a result of rising costs. Most retail traders take the automation route to save on unnecessary costs associated with the business. On the brokers’ side, automation has also played a key part in maintaining liquidity. The efficiency that comes as a result of automation is invaluable for making quick trades without disrupting the business.
In terms of raw statistics, the forex market has continued to grow. The number of traders involved has risen and so has the volumes of trade. The market value of the major companies in the forex market has also increased significantly. The encouraging statistics have been extensively published by most of the platforms that facilitate forex trading.
In short, the forex market in 2018 looks promising due to sound regulatory frameworks, increased adoption of technology and heightened efforts to standardise digital currencies. As the year progresses, stability is expected in the market. The performance of currencies in the major economies will be relevant but market forces will ultimately prevail.