| The foreign exchange market - otherwise called the | | | | on the time zone, dozens of global financial centers - |
| forex market, or simply the FX market - is the most | | | | such as Sydney, Tokyo, or London - are open, and |
| traded financial market in the world. | | | | currency trading desks in those financial centers are |
| More than anything else, the forex market is a | | | | active in the market. |
| trader's market. It's a market that's open around the | | | | Currency trading never stops, not even a single day, |
| clock six days a week, enabling traders to act on | | | | unlike business which have holidays and such. Even |
| news and events as they happen, to think about | | | | though it's a holiday in Japan, for example, Sydney, |
| how events can cause the market to go up or down. | | | | Singapore, and Hong Kong may still be open! |
| It's a market where half-billion-dollar trades can be | | | | Currencies and Other Financial Markets |
| executed in a matter of seconds and may not even | | | | As much as we like to think of the forex market as |
| move prices noticeably. | | | | the be all and end all of financial trading markets, it |
| Try buying or selling a half billion of anything in | | | | doesn't exist in a vacuum. You may even have heard |
| another market and see how prices react. | | | | of some these other markets: gold, oil, stocks, and |
| The Figures | | | | bonds. |
| Average daily currency trading volumes exceed $2 | | | | There's a fair amount of noise and misinformation |
| trillion per day. That's a huge number isn't it? Just | | | | about the supposed interrelationship among these |
| imagine the number of 0s there are. | | | | markets and currencies or individual currency pairs. To |
| Liquidity | | | | be sure, you can always find a correlation between |
| Liquidity refers to the level of market interest - the | | | | two different markets over some period of time, |
| level of buying and selling volume - available at any | | | | even if it's only zero(meaning, the two markets aren't |
| given moment for a particular asset or security. The | | | | correlated at all). Always keep in mind that all the |
| higher the liquidity, or the deeper the market, the | | | | various financial markets are markets in their own |
| faster and easier it is to buy or sell a security. | | | | right and function according to their own internal |
| A Trading Day | | | | dynamics based on data, news, positioning, |
| The forex market is open and active 24 hours a day | | | | andsentiment. Will markets occasionally overlap and |
| from the start of business hours on Monday morning | | | | display varying degrees of correlation? Of course, |
| in the Asia-Pacific time zone straight through to the | | | | and it's always important to be aware of what's |
| Friday close of business hours in New York. Or in | | | | going on in other financial markets. But it's also |
| other words, it is always open. This means that you | | | | essential to view each market in its own perspective |
| can always trade! At any given moment, depending | | | | and to trade each market individually. |