It’s no secret that forex trading is a huge time investment and usually a huge financial investment as well. With the huge increase in popularity, it’s natural to assume that there will also be a huge decrease in popularity at some point or even regulatory action that destroys the possibility of trading forex. With that in mind, is forex trading going to end?
Forex is not going to end due to the fact that the financial market has over $6 trillion in trading volume daily and is used by every bank, financial institution and corporate in the world. The market may be regulated in various ways for retail traders but forex certainly will not end, ever.
Will Forex Come To An End In The Future?
The simple answer is no, forex will never come to an end. Many people may not understand what forex is or what you’re actually trading. Forex is short for foreign exchange and this is the market where currencies are traded. It’s estimated that there are about 250 million daily trades in the forex market. These trades equate to roughly $6 trillion per day and every bank, hedge fund, institution and company in the world are taking part.
If forex trading did come to an end, the world would end – it’s the simple. There would be mass chaos, banks would shut down, international trade would shut down overnight, we would see hyperinflation and the world would genuinely cease to exist as we know it.
The good thing is that this will never happen and currencies will continue to be traded, as they always have been! The only way the forex markets could ever change would be if we no longer used FIAT currency and all value was pegged to some other instrument. Even then, foreign exchange markets would most likely still exist as even now we have BTCUSD, BTCGBP etc, if we look at cryptocurrency as an example.
If you’re worried about putting 1000 hours into learning to trade forex because you think forex will cease to exist, fear not! The only thing that you need to worry about is understanding how the forex market works and making sure that you trade forex at a reputable, regulated broker so that your funds are as safe as possible.
How Forex Trading May Change But Not End
Although forex isn’t going to end, it could certainly change in a few ways. These are mainly going to effect retail traders like you or I. On the other hand, the industry is already highly regulated across the board so there isn’t much that could be changed…
Tougher Regulations For Forex Traders
The most likely change to forex trading over the next 5 years would be stricter regulations in terms of account size, leverage, margin, taxation, trading hours and marketing/advertising. Basically, this would mean that brokers may be forced to stop marketing their services on social media or even limit the amount of leverage they offer on certain accounts. Sadly, this could also extend to people like you and I where we may not be able to actually deposit funds with some brokers.
When it comes to stricter regulations, we’ve already seen this in the cryptocurrency world. You can’t market your business freely and you will likely see brokers closing their doors to new traders as they struggle with regulation compliance.
The good news is that most brokers are far ahead of whatever smart legislation could be passed and have already invested heavily into ensuring that they’re adhering to all rules and regulations. This means that even if stricter rules are put in place, you’ll still be able to trade forex with a regulated broker who is doing everything they can to ensure their traders are protected.
I’m not saying that this will even happen but it’s simply something we need to consider when trading forex. This also should already be the case – you want to be avoiding unregulated brokers like the plague!
Tight Regulations On Prop Firms
The prop firm industry, for retail forex traders, is extremely new and there does need to be regulation in place to ensure the longevity of the industry. I’m not sure what these regulations could be but it’s worth keeping an eye on the regulators like the FCA to see what they’re planning to do with UK based prop firms.
In Summary – Is Forex Going To End?
In conclusion, forex trading is not going to end, ever. It’s the world’s largest market with trillions of dollars being traded on a daily basis.
The only thing that could change are some of the ways retail traders are able to access the markets but this would need global legislation which is extremely unlikely. That said, there may be stricter regulations on brokers or prop firms so it’s worth considering this when opening your account.
As for when forex trading will end? It’s next to impossible to predict that which is why you never see anybody talking about it. For me, the only thing I’d like to see end are all of these signal sellers and unregulated brokers who can’t even spell ‘foreign’ correctly, much less actually understand how the markets work.
Do you think forex will end? Let me know in the comments…