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Comparison between Forex and Stock Trading

Forex (Foreign Exchange) market is the largest financial and liquid market in the world.

Unlike the stock market, FOREX is an over-the-counter market with no central exchange and clearing house where the orders are matched.

Traditionally, forex trading with dealers was not popular/private investors (traders have shorter positions than investors) because the foreign exchange market for hedge funds was only open and for retailers as they are not available. Only in recent years, forex trading is open to trade.

A boker like FXTrader777 allow its users to the Meta trader 4 platform. Relative share trading was around much more for private investors. Recent developments in computer technology and exchange allow a small cost and easy access to retailers or currency for trade, from almost every part of the world with Internet access.

The easy access and low commission have the chance to win much higher for the retail, both in stocks and currencies. What is the best option for a trader?

Trade comparisons for the retail currency exchange are as follows:

The Type Of Instrument

The type of trading stock elements bought and sold between trading in the foreign exchange market and is different. In stock trading, buying, representing or selling a stake in a particular company in a country.

There are many different stock markets in the world. Many factors determine the rise or fall of a stock price. More information on factors affecting stock prices – see my article in the reserve.

Forex trading involves the buying or selling of currency pairs. In one transaction, a trader buys one currency from one country and sells currency from another country.

Thus, the term “exchange”. Traders expect the value of the currency in relation to sells them for the value of the currency will grow to buy. Basically, bets a trader’s currency from the economic perspective (or at least his monetary policy) by one country against another country.

The Size Of The Market And Liquidity

Foreign exchange market is the largest market in the world. With daily transactions of more than 4 trillion dollars, injured stock markets.

Although there are thousands of different stocks in the stock markets, there are a few currency pairs in the foreign exchange market. Therefore, forex trading is less susceptible to market manipulation by large players compared to stock trading.

The large volume of the market also means that currency pair enjoys greater liquidity than shares. A forex trader can easily enter and exit the market.

Stocks are relatively less liquid; a trader may find a problem coming from the market, especially in the biggest negative news. This is worse, especially for small-cap stocks.

Also because of its huge liquidity in the foreign exchange market, forex traders can enjoy better communication of prices compared to stock traders.

Trading Hours

Forex market is open 24 hours, while the US stock market is open daily from 9:30 to 15:00 ET et al. This means that Forex traders can always be replaced, while brokers are limited to 16:00 ET from 930 pm EST.

A major disadvantage of store marketers is that the stock markets are only open to market producers in the pre-market (8:30 a.m. to 9:20 p.m.) and post market hours a.m. (4:30 p.m. to 6:30 p.m. EST).

And it is in these pre-market and post-market times that most companies release their earnings results that have a large impact on stock prices. This means that retailers see retail (many of us) only increase or decrease prices at these times. Moreover, at this time honored to stop for not. Sufferers of the currency are not great disadvantages. In addition, a stockbroker ends their currency trading outside of business hours.


For trading, a merchant must have a fairly large amount of capital at least tens of thousands usually in your account. However, a merchant can start trading with just a few hundred dollars. Indeed, forex trading makes a greater impact. A forex trader would get a bigger transaction over the stock market.

Some Forex brokers offer 100: 1, 200: 1 or 400: 1. 100 Leverage: 1 means that $ 1k can get 100-fold transaction value up to $ 100k. No interest on money is used. Trading in shares, in general, does not allow more than twice the leverage effect in the trading margin. They are related to the interest rate negotiation.

Transparency and Analysis of Data

There are thousands of different files in different industries. A trader needs of many research initiatives and chooses the best act to name a few. There are many factors that affect the price of the share. There are many other factors that can influence the course of action. Traders can, therefore, focus on a few currency pairs for trading.

In addition, most of the data or messages that affect the exchange rate are announced officially planned and transparent. Therefore, the retail Forex traders have a better chance of success than the retail stocks.

The market conditions of Bear / Bull

Merchants can act on both types of buying currency pairs without restrictions or sales. However, stock traders have more restrictions and profits in low market conditions to trade. There are more restrictions and costs associated with the sale of related actions.

In a bull market, if the economy is going well, stock traders have a big chance to buy shares in the profitability of all, then sell it later. Savvy traders, however, could make a profit in all market conditions.

Currency trend

The main currencies are influenced by national fiscal policy and macro trends in national financial policy and the trend tends to slow macro in a particular direction, either in cash growth (interest rate cuts) or rate cycle up last.

Stock rates and generally varies due to many factors; many of these factors are specific to micro and actions. Therefore, a better Forex trader may have trends in money markets that companies that use the stock markets in stock.


In general, most markets are in key actions controlled better than the foreign exchange markets. Therefore, traders must be aware of the difference in equity markets. Fortunately, there are many forex brokers which have a good reputation in the market. With care and thorough research, it is easy to find a reliable Forex broker.

Based on the above points, forex trading seems to be trading better than stock trading, especially in these global uncertainties. During the negotiations, the state tree stock can be an interesting alternative. A stock trader should seriously consider withdrawing your additional currency trading.

Forex Traders can take action all opportunities after hour’s stock trading company, use, exchanged for foreign exchange. Forex also allows stock traders to understand a complete view of the global economy activities and improve your stock trading skills.

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About StephanJ

Stephan J is the founder of Monetize.info and is making a living exclusively online since 2004. He tried and managed to make good profits on everything from Forex trading, options, website flipping, adsense, affiliate websites.His passions are cycling, fitness and he is spending a small fortune on watches and fine cigars

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