Earlier this year, we launched a campaign to help fund our second ever book, Signals: Charting the New Direction of the Global Economy. Thanks to over 1,200 backers, we reached our funding target, making the book a reality.
After months of research and design, we submitted Signals to the printers in September, and we are delighted to announce that it is officially available for purchase.
What’s Signals all About?
Did you know, that over the next three years humanity will have created more new data than in all of human history combined? More data inevitably means more complexity, which makes it harder to narrow down the root causes that will lead to future trends.
Our new data-driven book identifies clear takeaways—called ‘signals’— that are shaping the future of the global economy. Every chapter uses powerful charts and data visualizations to put each signal into perspective and simplify complex, global trends.
Each signal covered in the book comes with:
- A graphical road map to explain its journey
- A data-driven dashboard
- An indication of the signal’s overall strength
- Supporting charts and data visualizations that put each signal into perspective, showing its potential impact on the global economy
To learn the full backstory of Signals, please visit our Kickstarter page, where we shared regular updates.
Thanks again to everyone who supported us along the way, we can’t wait to hear what you make of our latest book.
What’s New on VC+ in December 2020?
If you’re a regular visitor to Visual Capitalist, you know that we’re your home base for data-driven, visual storytelling that helps explain a complex world.
But did you know there’s a way to get even more out of Visual Capitalist, all while helping support the work we do?
New to VC+ in December 2020
VC+ is our members program that gives you exclusive access to extra visual content and insightful special features. It also gets you access to The Trendline, our new members-only graphic newsletter.
So, what is getting sent to VC+ members in the coming weeks?
“The Challenges in the New Age of Leadership“
SPECIAL DISPATCH: How Leaders Can Navigate a Rapidly Changing World
Without question, 2020 has amplified several key issues facing businesses today, prompting many organizations to re-establish the role they play for their customers, and society as a whole.
As we approach the new year, what can leaders do differently to meet these new expectations?
In this VC+ Special Dispatch, we explore some of the ways leaders can become more flexible, resilient, and courageous in an increasingly complex and unpredictable world.
Publishing date: December 3 (Get VC+ to access)
SPECIAL DISPATCH: A Close Evaluation of 2020 Predictions
At the very beginning of this year, we published Prediction Consensus: What the Experts see coming in 2020.
In this VC+ Special Dispatch, we’ll be revisiting this piece to look at how these expert predictions panned out over a very turbulent year.
Publishing date: December 10 (Get VC+ to access)
“Evolution of VC Visuals”
SPECIAL DISPATCH: How Have VC Visuals Changed Over Time?
Since 2011, we’ve been creating data-driven visual content to simplify an increasingly complex world. As our team has grown, our style has evolved, bringing new ideas, techniques and visualizations.
In this piece, we’ll take a close look at how our graphics have changed over the years and will highlight some of our favorite methods.
Publishing date: December 17 (Get VC+ to access)
PREMIUM NEWSLETTER: Our Weekly Newsletter for VC+ Members
Every week, VC+ members also get our premium graphic newsletter, The Trendline.
With The Trendline, we’ll send you the best visual content, datasets, and insightful reports relating to business that our editors find each week.
Publishing Date: Every Sunday (Get VC+ to access)
More Visuals. More Insight. More Understanding.
Get access to these upcoming features by becoming a VC+ member.
For a limited time, get 25% off, which makes your VC+ membership the same price as a coffee each month:
PS – We look forward to sending you even more great visuals and data!
Forex Market: Unlocking Opportunities for Investors
What are the advantages of the forex market? Individual investors can access this expansive, global market—largely unknown to many.
Forex Market: Unlocking Opportunities for Investors
In 2019, the global foreign exchange market (forex) was valued at a jaw-dropping $2.4 quadrillion.
In fact, this is equal to more than 50 times China, Japan, Germany, India and the U.S.’s economic output combined. Institutional investors, such as investment banks, pension funds, and large corporations have typically dominated this space, but there are avenues for individuals to enter the market as well.
This infographic from Compare Forex Brokers breaks down the world’s most interconnected financial market, and how individual investors can start trading.
The Forex Market: A Global Landscape
Across the forex market, 170 major, minor, and exotic currency pairs can be traded as contracts for difference (CFDs). A CFD enables you to speculate on whether the price of an asset will rise or fall.
Here, trades are conducted on over the counter (OTC) markets—non-centralized markets made up of a network of participants. This is different from traditional markets, such as the S&P 500 and the Nasdaq, which operate on formal, centralized exchanges.
While the forex market is by nature, decentralized, these core regions show where forex transactions are most concentrated by market participants including banks, commercial businesses, or individual investors.
Globally, the majority of forex trading takes place within the following hubs.
|Forex Trading Centers (2019)||Country||Share of Global Over the Counter (OTC) Forex Turnover|
The UK accounts for over 43% of global forex trading, averaging $2.7 trillion daily according to the 2019 Triennial Central Bank Survey by the Bank for International Settlements. London’s geographic location between the U.S. and Asia makes it an optimal forex trading centre—a trend that has held strong over the last 50 years.
With forex trading in the U.S. jumping over 50% in the last decade, the U.S. is the next most active forex market. Meanwhile, averaging $633 billion in trading volumes in 2019, Singapore is Asia’s largest forex trading center, with Hong Kong following close behind.
The Top Seven Currency Pairs
What are the most highly-traded currency pairs?
Overall, 68% of global forex trading falls into seven major currency pairs.
|Top Seven Currency Pairs||Percentage of Total|
|1||United States Dollar vs Euro||24.0%|
|2||United States Dollar vs Japanese Yen||17.8%|
|3||United States Dollar vs Great British Pound||9.3%|
|4||United States Dollar vs Australian Dollar||5.2%|
|5||United States Dollar vs Canadian Dollar||4.3%|
|6||United States Dollar vs Chinese Yuan||3.8%|
|7||United States Dollar vs Swiss Franc||3.6%|
Currency prices are impacted by factors including inflation, international trade, political stability, among other macroeconomic factors.
Breaking Down Institutional and Retail Trading
While commercial and central banks, hedge funds, and investment managers make up most of the forex market, only 5.5% are individual investors.
Importantly, they differ in a few key ways.
|Institutional Forex Trading||Retail Forex Trading|
|- Buy and sell the physical currency|
- Interdealer market: Large institutions trade on an interdealer market, which is a non-centralized network of dealers
- Less formal: Often trades are conducted by phone, email or instant message.
- Non-transparent: Execution prices and buy/sell orders are not visible to the market.
|- Buy and sell contracts for difference (CFD)
- Contracts for Difference (CFD): CFDs allow traders to speculate on the price of an underlying asset. Traders do not own the underlying asset.
- Long and Short Trades: Traders can take a long or short position:
- Long position: buying a CFD with the expectation the asset's market price will increase.
- Short position: selling a CFD with the expectation the asset's market price will decrease.
For various reasons, retail forex trading increases in popularity year after year. However, before diving in, it is important to know the stakes involved in this speculative market.
Understanding the High Risk of Forex Trading
Retail forex trading is, at is core, very risky.
In 2019, 71% of all retail forex trades lost money. One explanation is the highly leveraged nature of the market—many investors trade using borrowed money. But while trading with leverage can magnify losses, it also applies to gains.
Key Benefits of the Forex Market
While there is risk inherent in the market, what are some of the advantages in forex trading?
- Low transaction costs: No exchange or regulatory fees. Overall trading costs are low with both commission and no commission pricing structures available.
- High liquidity: Along with being the largest market globally, it is also the most liquid with $6.6 trillion in daily trading volume.
- 24-hour market: Trading is not confined to limited hours or time zones.
- Leverage: Forex brokers offer retail traders leverage which allows the to increase their exposure
Unlike equities, currency trading is all about relativity. A currency can depreciate overall, but can also appreciate relative to a currency that has depreciated even more.
Connect to New Markets
While big gains are possible, many trades lose money, but regulatory improvements have helped build trust in the market.
Meanwhile, multiple digital platforms provide a link to global currencies, allowing retail forex traders to enter the market and trade from any location. For those comfortable taking more risk, currency markets offer opportunities with outsized potential.
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