28 May

5 Key Differences between Forex Trading and Stock Trading

admin Learn Forex Trading 1 Comments
Foreign exchange market may seem to some people very identical to another financial market. On the outward, the forex exchange has many connections to the stock exchange. 
There are Five Major Differences between Forex Trading & Stock Market Trading
  1. Trading hours
  2. Trading Market 
  3. Financial Friction 
  4. Speed 
  5. Complexity
Trading Hours
Both the stock market & the forex market works in a hard schedule. Most stock market opens for 8 hours, & then blocked until the next morning when that open for trading again. For ex., the ASX- Australian Securities Exchange trading time is between 10 am - 9:30 pm Sydney Time. In comparison, there is no spare time in forex trading. The forex market opens 24hours a day in 3 shifts, during the whole year. You can select between the US session, Asian session or European session for forex trading hours, It allows for currency trading all day or night.
Trading Marketplace
Forex, contrast the stock markets, are not geographically choke down. It is in fact treated an OTC- over-the-counter market exchange. It can be supervised on a location best suited to the appeal & amenity of the trader. Some forex trading platforms such as MT4 even allows for mobile trading using an Android phone. On another hand, stock markets are consolidated. Which means it is located mainly in one place like NYSE- New York Stock Exchange, in where all trades are opened or exited.
Financial Friction
The stock markets always desire a mediator, which hence concludes to more financial friction, or simply set fees. Every time a stock is sold, a mediator or might it be a broker or some other body, is always fixed between buyers & seller. They take money just to promote the trade. This is the same case every time a stock is buy or sell. You have to go through a mediator. In Forex trading that is not happen in the case. In forex market place, a trader can buy or sell straight by spot trading for the reason of forex market is not consolidated. Although of course the forex broker is there. But the boundary is, in the forex market, the spreads are clearly shown. As well as, most brokers don’t require an even charge a commission & additional transaction fees.
Trading Speed
In forex markets, a trader can set an automatically execute a trade on a forex trading signal. It makes forex trading relatively spontaneous. A forex trader is less possible to miss a trade for the reason of the time it takes to execute an individual trade. In stock markets on another hand, a trader has to set this order to the trading floor or platform, & from there, it might still take few minutes to be executed.
When you consider about it, forex trading blisters down to tracking just four major currency pairs. Of course, one might contend that in forex trading, you got to do a lot of formulation & study for a flawless forex market analysis. On the advantage side, many websites offer forex education training, forex market analysis & forex tips like http://www.letechs.com/. Compare this to keeping many tabs on thousands of stocks in the stock market. In forex markets, currency traders have the more advantage of using forex systems in one tab. This system helps a currency trader in certain the best time to buy or sell a currency and the best stuff that a stock market trader for that is a broker in the market.
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Risk warning: Trading foreign exchange (Forex Trading) and contracts for differences (CFDs) on margin carries a high level of risk, and may not be suitable for all investors. There is a possibility that you may sustain a loss equal to or greater than your entire investment. Therefore, you should not invest or risk money that you cannot afford to lose. Please ensure you fully understand the risk involved before trading, and if necessary seek independent advice.

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