Learn the difference between forex trading and stock trading
Forex trading training - stocks vs fx trading.
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Both the stock (equities) market and foreign exchange market (forex) offer lucrative opportunities for investors. Trillions of dollars are funneled and exchanged through the markets on a regular basis. While they share some similarities, however, forex and the stock market are two unique markets with their own characteristics.
Let's first go ahead and get the most obvious difference out of the way: the stock market trades securities of various companies without the respective company's involvement, whereas forex is a decentralized market for the trading of currencies. This means you'll have far greater options available when trading on the stock market, as it contains thousands upon thousands of different stocks. Forex, however, is limited to currencies like the USD, EUR, JPY, GBP, NZD, CAD, etc.
One of the reasons why so many investors prefer forex trading is because of its simplicity. In addition to trading single currencies, investors can trade “pairs” of currencies, such as the EUR/USD (most popular). So instead of having to monitor the fluctuations of thousands of different stock, you can focus strictly on monitoring your respective currency or pairs or currencies in which you have invested. It's this level of simplicity that has made forex such a popular investment platform among newcomers.
As noted in an article published by Investopedia, commissions tend to be higher (much higher) in the stock market when compared to forex. Stock brokers typically require a commission fee on their spreads, in addition to the actual exchange fees. Forex brokers, however, only take the spread fee as their commission. Technical jargon aside, you get keep more of your money when investing in forex.
But there are still some reasons to choose the traditional stock market over forex, such as profit margins. Stock market trades can yield huge gains, sometimes ranging as much as 50%. Forex, however, typically involve smaller profit margins, although at the benefit of less volatility.
Another distinguishable difference between forex and the stock market is their trading hours. Most major stock exchanges (e.g. NASDAQ, DOW, NYSE) open for trades at 9:30am EST and close at 4:00pm EST. There are exceptions to this rule, however, such as market holidays and half-day market holidays. forex, on the other hand, is open for trading 24 hours a day throughout the workweek, with the market closed for trading on the weekends.
Learn more about FOREX TRADING:
Please watch: "Forex Trading Success - 5 Tips to Become a Better Forex Trader"