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Wednesday, April 15, 2009

The Difference Between the Forex Exchange Market and Stock Market?

By Gugu Martini

The FX market is also referred to as the foreign exchange market. When trading occurs between two countries who have dissimilar varieties of money they lay the foundation for the FX market this is the foundation of the trading patterns in this market place. set up in the early 70's the Forex market is over 30 years of age where you are not investing or dealing in business enterprises rather it is established on the trading of 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.

What is sold, bought and traded on the fx market are commodities that can be liquidated easily this means that they can be turned into cash quickly if it is not already cash The currency of one country to another the cash that is available in the fx market is something that can be arranged for any investor regardless of what country they are in.

The difference between the stock market and the forex market is that the latter is global or worldwide. While the stock market is more country specific and is based on businesses and products that are within a country, the fx market goes further to involves 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. - 23212

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