Retail Trading

Retail trading can be classified as trading relegated to individuals through a brokerage service or platform.

This can include both beginner and experienced traders, and has reflected a growing segment of the industry.

Overall, trading is divided into two designations, i.e. retail and institutional. Retail trading most commonly involves the investing of forex, commodities, and stocks, though can include any asset such as cryptos, etc.

Retail trading notably differs from institutional trading, which include investment banks such as JP Morgan or Citibank and central banks like the US Federal Reserve and the European Central Bank.

Each asset differs in the size of its retail and institutional markets. For example, retail forex trading is a small piece of the broader market where individuals speculate on the exchange rate between different currencies.

At the time of writing, the combined institutional and retail forex market exceeds 7 billion dollars in daily activity, with retail only constituting a small part of this.

Signs of a Growing Retail Trading Sector

The past few decades have seen a strong growth in the retail trading sector.

This has led to the development and harnessing of electronic trading platforms and the internet, which have collectively allowed individual traders to access the global currency markets.

Individual retail traders have comparable access to the same trades as central banks and online financial institutions, more so than ever before.

Consequently, the retail forex trading industry continues to grow every day with the implementation of new trading platforms in tandem with more seamless accessibility.

Retail traders also rely on brokerage services who provide access to markets in the form of comprehensive trading platforms.

The most popular of these platforms are the MetaTrader 4 (MT4) and MetaTrader 5 (MT5), which offer access to trading forex, stocks, contracts-for-difference (CFDs), and other assets.