Tuesday, October 30, 2012

Benefits Of Forex Trading Vs Stock Market Investments

The foreign exchange market is also known as the FX market, the forex marke or the currency market, in basic terms it is a worldwide investment market for trading currency. Trading that takes place between two counties with different currencies is the basis for the forex market and trading in this market involves just that - buying an amount of one currency with the amount of another currency . 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 numerous 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 of dollars that are traded daily on the forex market, in 2010 there was almost four trillion dollars traded on a daily basis. The amount traded daily on the forex market is much higher than the money traded on the daily stock market of any country. The forex market involves large banks trading billions each day, central banks who use currency targets to control national inflation and interest rates, commercial companies who trade with foreign currency when buying and selling goods, investment managers, retail brokers, and the list goes on.

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 while the stock market is limited to trading that takes place only within a country. The stock market is based on businesses and products that are within a specific country, and the forex market takes that a step further to include any country in the world.

The stock market also has set business hours. Generally, this is going to follow the normal hours of a 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 that there is a market open somewhere at any given time. 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 Euro and the European stock market, or the United States stock market and the US dollar (USD is the most heavily traded currency). However, in the forex market, you are involved with many types of countries, and many currencies.

While there are many differences between Forex Trading and Stock Market investing, it will always still depend on what you as individual would prefer. Just remember that the popularity of Forex Trading is growing for a reason and the time to get involved and learn is now. Technological advances has made it much easier for electronic trading via online portals and therfore much easier for you to also be involved.

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