Learn Forex 101

What is the Forex Market

When you exchange one currency for another, this is essentially what the Forex market is, and what they do. In the foreign exchange market, when the exchange rates change for the type of currency you’re trading for another, this is how many people make money in this type of market. The Foreign Exchange market, which is known as Forex or FX across the country, is the largest, and most known financial market in the world. They pack out a lot more than the New York Stock Exchange who comes in at $153 billion a day, while Forex comes in at $4 trillion a day in trade volume.

NYSE Investment

The New York Stock Exchange is the largest stock market in the entire world, and they trade around $74 billion each and every day. This is something that lets you know how much money is being used when it comes to trading stocks, but think about how much of a profit a lot of those stocks can actually bring in towards the end, if they choose the right trade.

Hearing about NYSE everyday is something that is common when you listen to the news. This is because they allow people to know if the stocks are up or down for the day. When the ‘market’ is being referred to, it tends to be the stock market that they are referring to. The stock market is big, loud, and makes a lot of noise about what it does. But when you look at it in a different way, compared to the Foreign Exchange Market, it would be tiny in comparison.

Forex Investment vs NYSE

There are big differences in the markets out there and the amounts that they trade on a day to day basis. This can be shown through a small diagram. When comparing the Forex Market, New York Stock Exchange, London Stock Exchange, and the Shanghai Stock Exchange, this is what you get:

The Average Stock Trading Volume per Day:

Forex MarketNew York Stock ExchangeLondon Stock ExchangeShanghai Stock Exchange
3.98 Trillion$74 Billion$7 Billion$18 Billion

The market out there for trading currencies is 53 times bigger than the stock exchange markets throughout the world. The amount shown above for the Forex market is actually the number that covers the entire world and their foreign exchange market rates as well. The retail traders or smaller traders that spot market online come to about $1.49 Trillion of the total. The Forex market is a huge place to be, but it is not as huge as media makes it out to be.