FXCM’s Forex Trading Metrics for November

In its latest monthly metrics report, forex broker FXCM reveals a few trading statistics that might give clues to the overall trends in the forex industry this time of the year. Can you spot these clues? Here’s the original press release:

FXCM Inc. (NYSE: FXCM) today announced certain key operating metrics for November 2011 for its retail and institutional foreign exchange business. Monthly activities included:

Retail Trading Metrics

  • Retail customer trading volume(1) of $345 billion in November 2011, 2% higher than October 2011 and 7% higher than November 2010.
  • Average retail customer trading volume(1) per day of $15.7 billion in November 2011, 3% lower than October 2011 and 7% higher than November 2010.
  • An average of 452,268 retail client trades per day in November 2011, 2% lower than October 2011 and 31% higher than November 2010.
  • Tradeable accounts(2) of 192,772 as of November 30, 2011, an increase of 1,197, or 1% from October 2011, and an increase of 12,783,or 7%, from November 2010.

Institutional Trading Metrics

  • Institutional customer trading volume(1) of $151 billion in November 2011, 13% lower than October 2011 and 108% higher than November 2010.
  • Average institutional trading volume(1) per day of $6.9 billion in November 2011, 17% lower than October 2011 and 108% higher than November 2010.
  • An average of 30,011 institutional client trades per day in November 2011, 31% lower than October 2011 and 521% higher than November 2010.

More information, including historical results for each of the above metrics, can be found on the investor relations page of the Company’s corporate web site, www.fxcm.com.

This operating data is preliminary and subject to revision and should not be taken as an indication of the financial performance of FXCM Inc. FXCM undertakes no obligation to publicly update or review previously reported operating data. Any updates to previously reported operating data will be reflected in the historical operating data that can be found on the Investor Relations page of the Company’s corporate web site, www.fxcm.com.

(1) Volume that FXCM customers traded in period translated into US dollars.
(2) An account that has sufficient funds to place a trade in accordance with FXCM trading policies.

Year-on-year, it is pretty clear that trading volume has increased. November 2011 versus November 2010 showed an uptick, with retail trading volume jumping by 7% and institutional surging by a whopping 108%. Average trading volume per day for both groups also tell the same story.

Looking at the month-on-month figures, however, trading volume has declined. This is probably caused by two factors.

First, volatility and trading risks have significantly increased since October due to the uncertainty surrounding the euro zone debt crisis. Second is seasonality. The holidays are fast approaching, which means traders are starting to take end-of-year vacations.

I know FXCM is just one of the bajillion brokers out there and not representative of the entire forex industry, but the report does give us clues to the traders’ habits this time of the year.

For example, we know from the clues above that more and more traders tend to leave their screens and call it a year as the holidays approaches. To me, this indicates that trading volume will continue to wind down until December and probably early January.

Speaking of trading volume, you know from your School of Pipsology that the lack of trading volume usually attracts more volatility. After all, it’s easier to move the markets if there are barely any traders taking the opposite side of your trade, right?

Because of thin volume trading, holiday trading is also known for showing ridonculous spikes in your favorite pairs. But if you’re one of them forex junkies who can’t even leave the charts for one day, don’t worry! Forex Gump has you covered with his tips on how to handle the Christmas week volatility.

Happy holidays, everyone!

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  • Pipgirl01

    I’m new but I have heard that the holiday season is busy in the Forex market ?? Has anyone checked out history ?

    • pipcrawler

      As I’m sure you’ve seen by now, the markets are pretty dead.  I think after this crazy year, most everyone is taking a nice break away from the markets.   

  • Forex Rate

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