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Forex Market Volatility

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Decoding Market Volatility

Basically, volatility is considered as bad news by most investors as stock market volatility and financial crisis go hand-in-hand. Actually, volatility can sometimes be good news and some other times bad news. In any case, understanding volatility is a key process towards optimizing your portfolio management and maximizing your returns in the long-run.

Volatility can be used either for detecting potential breakouts or for categorizing financial assets based on the level of their risk.

What is Actually Volatility?

Volatility is a statistical tool that measures the degree of variation of a price series by using a standard deviation of returns.

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BIS Forex Market Report 2016

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Bank of International Settlements Forex Report (2016)

The BIS (Bank of International Settlements) triennial survey is considered the most comprehensive report in the Foreign Exchange Market.

BIS Report / Summary of Findings (compared to three years ago)

-The total Forex market volume is slightly diminishing due to regulatory tightening ($5.1 from $5.4 trillion a day)

-The US Dollar maintains and strengthens its dominant position, the Euro, on the other hand, is falling but maintains the second position

-China's Yan market share is rising fast and already reached 4.0% (doubled since three years ago)

-The Forex market's activity became even more concentrated (77%) in the major five (5) world financial centers

-London's role as the global financial center is diminishing, but still, maintains the dominant market share

-The three major Asian financial centers (Tokyo, Hong-Kong, and Singapore) are rising fast in terms of volumes and market shares

Read more: BIS Forex Market Report 2016