Equities Forex Education

Which is better in Forex Vs Stock Trading ?

Stock market is considered volatile and getting victory in your dealing is not easy, in fact it can land the investor in trouble if he is not careful. With many experts in the market are working it out, there are luckily chances that the investor will succeed. When you see Forex vs stock trading, the traders around the globe are moving towards Forex as it had many advantages. The biggest advantage is that Forex is 24 hour trading and the volume of turnover is very big. Forex provides the ability to trade during different time zones which is a big plus, the trader can plan his own trading schedule based on his time zone.

The stock brokers charges a fee or commission or additional amount for the transaction, but Forex broker will not charge any commission as they are compensated through the bid. In the Forex there is no constraint of short selling in the currency market. As currency trading includes the buying of one currency and selling of another, there is no bias to the market. The trader has equal access to trade in the market irrespective of its state. In case of stock market, there are centralized exchanges and hence there is involvement of middleman which will cost the investor the money or time. The spot currency trading is not centralized and the prices will differ among different currency dealers. The trader is sure to get the best deal at competitive rates and there is no extra fee to pay.

When you compare Forex vs stock trading, the highs and lows of stock market have always depended on the large fund buying and selling and it can rise or fall the market. Whereas in case of spot trading in Forex, it is highly unlikely that one fund or bank can control a particular currency. On the other hand these conversion houses of banks are just participants in the spot currency markets where liquidity is extraordinary. In case of stock markets the analysts and brokerage firms or any stock broker can influence the stock market. Either it may be through recommendations by the big brokerage firm who may suggest buying or not buying particular stork. That’s how the stock market works, but in case of Foreign exchange, it generates billions in terms of revenue for the bank of the world’s and directly or indirectly is a big requirement of the world market. The analysts in Forex have very little or no influence in the exchange rates, hence it avoids the volatility.

Big currencies like EURO, USD, CAD, AUD, CBP, JPY, and CHF account for the majority of the market volume; Forex trading gives the trader to focus on lesser instruments compared to the exchanges like NYSE where there are more than 1500 listings. Forex has definitely shown growth in past 15 years and whereas the Stock market has been able to show the similar growth pattern as Forex. Forex market provides very high liquidity, it provides the kind of margins which cannot be expected from stock market where most margin traders need at least half of the value of the investment, the Forex trader just requires just 1%. So we can see that in Forex vs stock trading, Forex provides a better way of trading compared to stocks.

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