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The forex industry evolved nicely in 2009. Looking towards 2010, and the new decade, here are 5 predictions about the industry.

I wrote this post after reading Kathy Lien’s excellent article about the top 5 events of this decade. I’m looking at trends that already began recently, as well as trends that I believe that we’ll see in 2010 and in the following years.

  1. Forex trading will become more mainstream: Most people think of forex only in the context of buying hard currency when they go for a trip abroad. As the forex industry continues to evolve, I believe that it will become more mainstream, getting more attention in the media, and becoming an investment channel that the banks offer.
  2. BRIC currencies to become more popular: The big nations of Brazil, Russia, India and China aren’t very popular with forex traders. China’s economy is the third in the world, and will soon become second, but the currency doesn’t float. The other countries aren’t popular now. Not yet. I already wrote about the Brazilian Real. I believe that their popularity will rise: more brokers will offer them, people :in forums will talk about them, and their trade volume will rise.
  3. Consolidation of forex brokers: Currently there are lots of forex brokers out there. Some are market-makers, and others are ECN/STP. Most traders don’t know the differences. I think that many of the smaller brokers, and especially market-makers, will disappear or merge into bigger brokers. Consolidation happens in any maturing industry, and it will eventually happen in forex.
  4. Education will become important: Following the previous point, the level of education is rising among traders and this will be seen not only in choice of brokers but also in trading. Forex education will impact trading styles, profits and people who supply resources for teaching and coaching forex. Here’s more about the growing role of education.
  5. Commodities will grow with forex: Oil and gold are already quite popular. As the world recovers, more commodities will be in the limelight. Silver has gained traction due its rise, and a food crisis will probably make wheat very popular. Commodities don’t have to compete with forex: more brokers will probably offer both together. It’s becoming more and more common.

I’d love to hear more predictions…

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