The Foreign Exchange Market is commonly misconstrued as the stock market, but the FX market obviously only deals and trades in money transfer. The difference between the two markets is the extensive trading that takes place on the foreign exchange market.
The vast sums of monies that pass through the FX market can be phenomenal, easily reaching in to the trillions daily,
so obviously the amounts of money are far greater than that of the stock market.
The monies that are traded, sold and purchased across the FX markets can be efficiently liquidated, ergo it can be converted to hard cash fast. This is the huge benefit to investors wishing to deal between two currencies in different countries, the fact that it can be done at great speed.
The fundamental difference between the FX market and the stock market is the fact that the FX market’s deals are worldwide. The stock market will generally deal from within a country and sell products and business native to that country.
International money transfers are constantly taking place around the world and so the market needs to be open for business 24 hours a day. The immense number of countries that deal in FOREX trading, buying and selling are of course going to be situated in differing time zones.
When an FX market is closing on one side of the world another is opening for business, creating an infinite progression of worldwide trading. The stock market however has set times of closure and will also shut down for bank holidays and weekends.
Currency is one of the main differences between the two markets. For example: the UK stock market will only deal in British pound (GBP) / Sterling or the USA will obviously deal in US dollars both using their native currencies.
The Foreign Exchange Market nonetheless, will be involved in numerous currencies from numerous countries.