How is the FX Market Different from the Stock Market?
In the foreign exchange market, also known as the FX or FOREX market, trading that takes place between two countries with different currencies. This is the basis for the Forex market and the background of the trading in this market. 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.
1. Vast trading occurs daily on the Forex market:
The difference between the stock market and the Forex market is the vast trading that occurs on the Forex market. Millions and millions are traded daily on the Forex market, with as much as three trillion dollars being traded daily – an amount far greater 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.
2. The Forex market is global:
The difference between the stock market and the Forex market is that the Forex market is global / worldwide. The stock market on the other hand is something that takes place only within a country. While the stock market is based on businesses and products that are within a country, the Forex market includes any country.
3. The Forex market is open 24 hours a day:
The stock market has set business hours which generally follow the business day, and will be closed on banking holidays and weekends. The Forex market however, is one that because of the vast number of countries involved is open generally twenty four hours a day except on weekends. The countries involved in Forex trading, buying and selling are located in many different times zones, so as one market is opening, another countries market is closing. This is the continual method of how the Forex market trading occurs.
4. The Forex market is based on multiple currencies:
The stock market in any country is based only on that countries currency. For example, the British stock market, and the British pound, or the United States stock market and the dollar. However, in the Forex market, you are involved with many types of countries, and therefore 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.
Filed under: Forex Information & Tips
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