Forex Vs. Stocks
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I speak to a lot of people wanting to switch from trading stocks and learn forex and how to trade it. I would like to take a look at trading the Forex and compare it to trading stocks. Many times, a question asked by traders is if there is an advantage of Forex trading over stock and commodity markets. There are definitely advantages in financial trading the Forex market. They will be discussed in more detail below.
- The trading schedule is a little bit different for Forex than stocks. In the Forex market, there are centers all around the world, so financial trading can take place 24 hours per day, Monday to Friday. As the doors close in one trading center, another is opening its doors each day. In the stock market, you can only trade during the hours of 9:30am EST to 4pm EST. The ability to trade all day, brings unlimited opportunities to Forex traders all over the world.
- The Forex market involves the actual trading of money. As the value of one currently falls during hard times, it allows for a profit in another currency. You should also be aware that the Forex market is not negatively affected by the increase in interest rates. When interest rates rise, it has a tendency to depress the stock market.
- In the Forex market, your variety is cut way down. You basically have 4 options or major currency pairs, the EUR/USD, GBP/USD, USD/JPY and USD/CHF. In the stock market, you have over 10,000 different stocks that you can choose from. It is much easier to manage a Forex account with four currencies than a stock account with hundreds or thousands of stocks.
- When trading in the Forex market, you never have to pay a commission, they are free! The only cost is the spread. On stocks, you most likely have to pay a commission whenever you buy or sell. It is either a fixed commission or one based on the number of share your purchasing or selling.
When the Forex market and the stock and commodity market are looked at head to head, the Forex market appears to be a better investment choice based on its strengths. If you are thinking about putting your stock trading days behind you and learn how to trade the Forex, there are a lot of of quality forex trading courses out there to help you make the transition.
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CMOE says:
2 years ago
This is a good hub. Thanks for the info.