| Forex Automoney - How The Foreign Exchange Market And The Stock Market Are Different |
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| Written by Robert Leviton |
| Wednesday, 18 August 2010 20:29 |
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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 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. There are definite differences between the volume and dollar value of trading on the stock market and the Forex Market. With the Forex market, governments, banks, financial institutions of many countries can actively trade Forex at any time. The result is that nearly $2 trillion dollars is a typical single day trading volume. This far exceeds the dollar amount of trading on the stock market of any single country. 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. 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. Because there is only one Forex market, and it is worldwide, it needs to be available 24 hours a day, as the market spans many countries in many different time zones. Since stock markets are basically "local" to their country, the stock markets will be open when businesses are open in that country. Therefore, the stock market's availability will mirror business availability. This will include weekends, holidays and any other non-working days. The stock markets' hours will also follow the business hours of whatever country it is in. Since the stock markets are based on the country where they are located, trading is in the local currency. Depending on location, therefore, transactions will take place in dollars, euros, yen, or whatever the local currency is. When you trade forex, however, the trade is always involving currencies of two countries. This is another key difference between the Forex market and the stock market. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. Want to find out more about Forex Automoney, then visit Robert Leviton's site on how to choose the best way to trade Forex for your needs. |