Compare Forex Trading and Stock Trading

Foreign currency exchange market i.e. Forex is one of the largest and most smooth financial markets in the world. With dissimilarity of stock markets, the Forex market is an over-the counter market. Here no clearing house or central exchange is matched. As the Forex market was opened only to Hedge Funds it was not approachable to retail traders like us. And therefore, it is not much popular with retail traders or investors. Nowadays Forex trading is also for retail investors. But while comparing Stock trading is for long time for retail investors. Now with use of internet and many advancement in computer and internet it is easy for retail traders to trade foreign currency from anywhere in the world with less charges and easy approach. This has increased the ratio for retail traders in stocks and Forex.

The most popular form of investment is Stock trading where you can buy and hold the position. Many companies are there who are enduring the recession where there stocks are collected for rebound. After the crash in stock market of 2008, Forex trading has also been popular too many people. They have started trading in Forex market.



But which of this is better option for a trader? Is it Forex trading or stock trading? Let us compare two of them:


Fluidity and size of market:


In the world Forex market is one of the largest markets. It dominates the stock market with daily dealings of over US$ 3 trillion. There are elite currency combinations in the Forex market whereas thousands of different stocks in stock markets. Therefore, compared with stock trading Forex trading is less prostrate to price handling by big investors. A Forex investor can get in and get out of market easily. Whereas stocks are of less fluidity and trader can be in difficulty during big bad news. For small cap stocks this can be worst. Due to high liquidity of Forex market, traders can relish better price than compared to stock traders.


Trading Hours:


Forex market is opened 24 hours while Stock market opens daily from 9.30am EST to 4pm EST. This means Stock markets have limited time for trade whereas Forex traders can choose any time for trading. The main disadvantage of stock market traders is that it is opened only for few hours.


Nature of the items:


The type of items used in selling and buying in Forex trading markets and stock trading are very much different from each other. In Forex trading buying and selling is of currency pairs whereas in stock trading buying and selling a share is done with a particular company in a country where many factors decide the rise and fall in share.


Affordability


While trading with stocks, trader needs enough amounts for trading. But Forex trader can start with a least amount of few dollars this is because they allow for higher purchase. There can be larger transaction as compared with stock market.


So with the help of these points you can make your Forex trading experience better and easier in comparison with trading in global economy.