I have been trading for 2 years now and I keep noticing the correlation between the equity market of a country and it’s money market.
For example, since US is a consumer based economy, a stronger equity market leads to a stronger dollar, and in export based country like Japan and China, the relationship is reversed. Commodity currencies such AUD and CAD strengthen when it’s equity market gains. In foreign exchange, the differential between these two variables seems to drive the direction(not magnitude) of the currency pairs. Any thoughts?
Actually, if you look back through history you’ll see that often the USD is weaker during strong periods in the US economy. Basically, it’s a function of demand for imports.
I would like to say that their is no big difference between the two simply because. they are more or less the same. Though the viables slightly differ from one market to the other. Traders should be able to choose the market best on their peferences and priorities. I can not tell you the one to join because you may blame me in future.
It is so sad to say that, we have been experiencing a serious challenge in the forex that has affected the whole world. There are few traders who have become money looters. If you are not careful, you may also be deceived. In fact, the new members should get trusted brokers to help them to catch up in the forex minus a negative experience.
There is not much difference between these. They are the same in a way. It is you who has to choose a market. You can make your decision on the basis of what you understand the most. You can study different markets and then decide which one you want to go with.