Forex Trading Vs Stock Trading – Why Forex Ticks Well. Forex vs Stocks.
Risk tolerance, convenience and account size are the major factors that influence your decision on whether you should trade Forex vs Stocks. If you will not be available for active participation during the active trading hours, then stock markets are definitely not for you. Though similar in trading mechanics to the stock trading industry, Forex trading can be your best choice for the features that differentiate Forex from stocks as explained below.
The Similarities between Forex vs Stocks Trading End with these Factors
The bid prices and ask prices are forever changing in the stocks and currencies market. The types of orders placed are the same.
As a common rule, the fluctuations in price for both equities and currencies is based on the supply and demand factor. However, the similarities end here.
Here are the Differences that Make Forex Trading Tick
Alternative Trading Choices: There are thousands of alternatives in the stock trading market.
However, in the currency trading market you should contend with four “major” currency pairs, three “commodity” pairs, and “cross” currencies.
Trading alternatives in Forex are easy to manage and master when compared to the many thousands in the stock industry.
Overlapping Market Hours: You can take advantage of the overlapping market hours in forex. Though the forex market is open 24 hours a day, you should consider trading during the local trading hours of Sydney, Tokyo, London, or New York or during the overlapping trading hours.
The active local market hours or the overlapping hours are when the markets are actually active and the prices are moving. When two markets are open at the same time, there is a market hour overlap, and you have more volumes, events, and news happening.
This eventually leaves you with lot of tradable indicators and signals.
Forex Trading Is Easier to Follow: Forex trading is easier to follow because you need to only follow the fundamental and technical indicators for eight major countries in asset classes for Australian Dollar (AUD), American Dollar (USD), Canadian Dollars (CAD), New Zealand Dollars (NZD), Japanese Yen (JPY), Great Britain Pound (GBP), Swiss Franc (CHF), and Euro (EUR) respectively.
However, when it comes to trading stocks you need to update yourselves to a world of more than thousand products and listings, which is not easy if you are a beginner.
Opening and Closing Positions: There are strict rules and regulations in the stock trading industry. Therefore, it is not easy to open and close positions in the stock trading industry. However, you can open and close positions in the forex market round 24 hours in a day.
Profits in a Declining Market: When the market is declining it is difficult to make profits in the stock market. In the forex market, you can make profits both during the rising and declining markets.
Low Margins and High Leverage in Forex: Low margins and high leverage are possible in the forex market. Low and flexible margins help you make more profits in a currency trading market which is not possible in a stock market. Leverage can work to your advantage or otherwise and this is where strategizing comes in to play.
The fact that low investment, high profits with small price movements, and comfortable trading hours are possible in forex trading is reason enough to make forex tick for you when compared to stock trading.
So we want to know what you think, Forex vs Stocks? which one will it be for you? Make sure to comment down below.