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Sunday, April 12, 2009

The Forex Exchange Market vs the Stock Market

By Gugu Martini

The FX market is likewise referred to as the foreign exchange marketplace. When selling takes place between two countries with unique currencies is the cornerstone for the fx market this is the basis of the trading practices in this market place. The forex market is over thirty years old, founded in the early 1970's where you are not investing or trading in business concerns instead your are selling and trading monetary systems.

The difference between the stock market and the forex market is the vast trading that occurs there, a whopping two trillion dollar plus is traded daily. The amount is much higher than the funds traded on any given country's stock market. The foreign exchange market is one of a few that involves governments, banks, financial institutions and another countries counterparts to those institutions.

The items that are bought and sold on the fx market are commodities that can be liquidated easily meaning it can be turned back to cash fast, often times it is cash already From one currency to another, the availability of cash in the forex market is something that can be arranged for any investor regardless of what country they are in.

The biggest difference the stock market and the forex market is that the latter is global or worldwide. The stock market is something that takes place only within a country due to dealing with the businesses and products in that country but the forex market takes that a step further to include any country.

There are set business hours for the stock market which typically follow the traditional business day so the stock market is closed on bank holidays and weekends. The foreign exchange market is open 24 hour a day due to the variety of countries that take part in trading selling and buying in a variety of time zones. As one market is opening, another countries market is closing which makes this an ongoing process of how the foreign market training happens

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 Spanish peso and the Spanish stock market. However, in the forex market, because you are involved with different countries and many currencies. You will find references to a variety of currencies, making this the biggest difference between the stock market and the forex market. - 23221

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