Foreign
exchange market | The stock market
The foreign exchange market is also known as the FX market, and the forex
market. Trading that takes place between two counties with different currencies
is the basis for the fx market and the background of the trading in this
market.
The forex market is over
thirty years old, established in the early 1970's. The forex market
is one that is not based on any one business or investing in any one
business, but the trading and selling of currencies.
The difference between the stock market and the forex market is
the vast trading that occurs on the forex market. There is millions
and millions that are traded daily on the forex market, almost two
trillion dollars is traded daily. The amount is much higher than
the money traded on the daily stock market of any country. The forex
market is one that involves governments, banks, financial institutions
and those similar types of institutions from other countries.
What is traded, bought and sold on the forex market is something
that can easily be liquidated, meaning it can be turned back to
cash fast, or often times it is actually going to be cash. |
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From one currency to another, the availability of cash in the forex market
is something that can happen fast for any investor from any country.
The difference between the stock market and the forex market is that
the forex market is global, worldwide. The stock market is something that
takes place only within a country. The stock market is based on businesses
and products that are within a country, and the forex market takes that
a step further to include any country.
The stock market has set business hours. Generally, this is going to
follow the business day, and will be closed on banking holidays and weekends.
The forex market is one
that is open generally twenty four hours a day because the vast
number of countries that are involved in forex trading, buying and
selling are located in so many different times zones. As one market
is opening, another countries market is closing. This is the continual
method of how the forex market trading occurs.
The stock market in any country is going to be based on only that
countries currency, say for example the Japanese yen, and the Japanese
stock market, or the United States stock market and the dollar.
However, in the forex market, you are involved with many types of
countries, and many currencies. You will find references to a variety
of currencies, and this is a big difference between the stock market
and the forex market.
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