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Forex trading Vs Stock trading

In order to learn more about forex & stock trading, we can first try and understand the behaviour of both the markets & then decide on the one which suits you (investor) the best.

  1. Compared to the stock market, forex is a bigger market. It lays its foundation on currency trading primarily.
  2. In order to gain an upper hand in the forex market, it is always advisable to know the currencies of different nations & their behaviour in the world financial arena.
  3. Trading in stocks is trading in shares of companies wherein the cost of each share may range from a few dollars to hundreds of dollars. Trading currencies depends upon the country’s currency rating and if there are any fluctuations. There is more liquidity in the currency trading market.
  4. Another feature of currency trading is that it is always quoted in pairs. This means that you should not only take into account the economic purview of the currency of your country but also the country you are trading with.
  5. The availability of currency markets is more than the stock markets. This implies that there are certain hours allotted to the stock market operations. On the other hand, forex market is open 6 days a week, 24 hours a day as the exchanges are not centralized.
  6. The geographical margins for the forex markets are not restrictive in nature. They follow ‘over-the-counter’ (OTC) exchange policy. Some markets also give the flexibility of mobile trading to forex investors. However, the same is not true about stock trading. Unlike forex markets, stock markets are centralized.
  7. Dealing with stocks is a trickier task and you need a financial planner to help you with your stocks planning. So in order to manage your stocks well you, not only, are required to shell out money for buying stocks but also pay a lump sum to your advisor. On the other hand, forex trading doesn’t require the intervention of a middleman, as you can do spot trading in forex market.
  8. The forex trading is less time consuming as the traders can almost instantaneously execute a forex trade. Make sure you study the forex market analysis as formulated by experts. On the other hand, the execution of stocks in stock market take a little more time than usual,