There is far more to successfully trading the Forex market then knowing the Forex market. All the securities markets are interconnected there is no movement in one that is not met by a movement in the rest. It is impossible to fully understand the Forex market without understanding what is happening outside of it.
There are four major security market categories: Equity markets, Bond markets, Commodity markets, and the Forex market. The equity market is where stocks are traded. They are different in each country: American stocks trade on American markets while Japanese stocks will trade on the Japanese market. Bond markets differ from country to country as well, but all deal with essentially the same security: government debt. While commodities are traded around the world, they all very closely follow each other, since oil in Europe is still oil in Australia. Finally, there is the Forex market, which you will hopefully already know something about, and it is the most global of the markets.
Since Equity and Bond differ by region, they are most useful in giving information at different times of the day. Commodities, however, give more general information since they are traded all around the world.
Each market also gives a different piece of the puzzle. Equities are useful as a thermometer of risk appetite, and commodities explain the expectations for different aspects of the economy. Bonds show the most fundamental of fundamentals: the change in the money supply.
In the next three articles I will explain how each of the three other markets, Equity, Bonds, and Commodities are related to the Forex market.
