Retail Foreign Exchange Platform
Retail foreign exchange trading is a small segment of the larger foreign exchange market where individuals speculate on the exchange rate between different currencies. This segment has developed since the advent of the internet and dedicated electronic trading platforms that allowed individuals to access the global currency markets. In 2007 it had been speculated that volume from retail foreign exchange trading represents 5 percent of the whole foreign exchange market which amounts to $50–100 billion in daily trading turnover.
Prior to the development of forex trading platforms in late 1990s forex trading was restricted to large financial institutions. It was the development of the internet, trading software and forex brokers allowing trading on margin that started the growth of retail trading. Traders are able to trade spot currencies with market makers on margin. Meaning they need to put down only a small percentage of the trade size and can buy and sell currencies in seconds.
Retail forex trading has been promoted by some as an easy way to make profits and has thus been the focus for a number of foreign exchange frauds. In response financial regulators in a number of countries have introduced restrictions or provided warnings about this type of trading. However due to the decentralized nature currency trading and the easy global access to the internet a number of brokers are based in less restrictive jurisdiction.
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