If you have traveled to another country, you usually had to find a stand exchange at the airport, and then exchange the money you have in your wallet (if you're a dude) or purse (if you 're a woman) or man purse (if you're a metrosexual) into the currency of the country you visit.
You go to the counter and notice a screen displaying different exchange rates for different currencies. You will find "yen" and you think "WOW! Mon dollar is 100 yen?! And I have ten dollars, I'll be rich!" (This excitement is quickly killed when you stop store to the airport afterwards to buy a can of soda and, all of a sudden, half your money is gone.)
When you do this, you basically have participated in the forex market! You exchanged one currency against another. Or in terms of forex trading, assuming you're an American visiting Japan, you've sold dollars and bought yen.
Before going home, you stop at the booth exchange the yen that you miraculously left (Tokyo is expensive!) And notice the exchange rates have changed. These are changes in rates of exchange that allow you to make money in the forex market.
The foreign exchange market, which is commonly known as "Forex" or "FX" is the largest financial market in the world. Compared to the measly $ 22.4 billion volume day of the New York Stock Exchange, the foreign exchange market looks absolutely ginormous with its $ 5 billion trade volume per day. Forex rocks our socks!
Take a moment to put this into perspective with monsters ...
The largest stock market in the world, the New York Stock Exchange (NYSE), trades a volume of about $ 22.4 billion each day. If we used a monster to represent NYSE, it would look like this ...
You hear about the NYSE in the news every day ... on CNBC ... Bloomberg on ... on the BBC ... Heck, you even probably hear about it in your local gym. "The NYSE is up today, blah, blah." When people talk about the "market", they usually mean the stock market. Thus, the NYSE looks great, is strong and likes to do a lot of noise.
But if you actually compare the foreign exchange market, it would look like this ...
Oooh, the NYSE looks so puny compared to Forex!
See graph of the average daily trading volume for the forex market, New York Stock Exchange, Tokyo Stock Exchange and London Stock Exchange:
You go to the counter and notice a screen displaying different exchange rates for different currencies. You will find "yen" and you think "WOW! Mon dollar is 100 yen?! And I have ten dollars, I'll be rich!" (This excitement is quickly killed when you stop store to the airport afterwards to buy a can of soda and, all of a sudden, half your money is gone.)
When you do this, you basically have participated in the forex market! You exchanged one currency against another. Or in terms of forex trading, assuming you're an American visiting Japan, you've sold dollars and bought yen.
Before going home, you stop at the booth exchange the yen that you miraculously left (Tokyo is expensive!) And notice the exchange rates have changed. These are changes in rates of exchange that allow you to make money in the forex market.
The foreign exchange market, which is commonly known as "Forex" or "FX" is the largest financial market in the world. Compared to the measly $ 22.4 billion volume day of the New York Stock Exchange, the foreign exchange market looks absolutely ginormous with its $ 5 billion trade volume per day. Forex rocks our socks!
Take a moment to put this into perspective with monsters ...
The largest stock market in the world, the New York Stock Exchange (NYSE), trades a volume of about $ 22.4 billion each day. If we used a monster to represent NYSE, it would look like this ...
But if you actually compare the foreign exchange market, it would look like this ...
Oooh, the NYSE looks so puny compared to Forex!
See graph of the average daily trading volume for the forex market, New York Stock Exchange, Tokyo Stock Exchange and London Stock Exchange:
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