In general, when deciding between forex or the stock market, forex can be seen as the riskier option, but open to more short-term wins, whereas stocks are better for slower, long-term growth. This also depends on the specific investments made on either side
There are approximately 2,800+ stocks listed on the New York Stock exchange. Another 3,300+ are listed on the NASDAQ.
Which one will you trade? Got the time to stay on top of so many companies?With forex, there are dozens of currencies traded, but the majority of market players trade the seven major pairs.
24-Hour Market
The forex market is open 24 hours a day during weekdays but closes on weekends. With time zone changes, however, the weekend gets squeezed. The forex market opens on Sunday at 5 p.m. local time in New York City. It closes on Fridays at 5 p.m. and resumes trading again 48 hours later to begin a new week.
Minimal or No Commissions
As a lot of online stock brokers now offer zero commissions, so this is now less of a factor.
Most forex brokers charge no commission or additional transaction fees to trade currencies online or over the phone.Combined with the tight, consistent, and fully transparent spread, forex trading costs are lower than those of any other market.
Most brokers are compensated for their services through the bid/ask spread.
Higher Trading Volume and Liquidity
Investors need to differentiate between volume vs liquidity, as both terms are widely used in stock trading. Volume and liquidity are correlated; however, the two terms are also very different from each other.
Short-Selling without an Uptick
Unlike the equity market, there is no restriction on short selling in the currency market.
Trading opportunities exist in the currency market regardless of whether a trader is long OR short, or whichever way the market is moving.
Since currency trading always involves buying one currency and selling another, there is no directional bias to the market. So you always have equal access to trade in a rising or falling market.
Minimal Market Manipulation
How many times have you heard that “Fund A” was selling “X” or buying “Z”? The stock market is very susceptible to large fund buying and selling.
https://ceb8e715865feaca402d2c92cfb0ed20.safeframe.googlesyndication.com/safeframe/1-0-40/html/container.htmlWith currency trading, the massive size of the forex market makes the likelihood of any one fund or bank controlling a particular currency very small.
The FX market is sufficiently liquid that significant manipulation by any single entity is all but impossible during active trading hours for the major currencies.
Analysts and brokerage firms are less likely to influence the market
IPOs are big business for both the companies going public and the brokerage houses.
Relationships are mutually beneficial and analysts work for the brokerage houses that need the companies as clients. That catch-22 will never disappear.
Foreign exchange, as the prime market, generates billions in revenue for the world’s banks and is a necessity of the global markets. Analysts in foreign exchange have very little effect on exchange rates; they just analyze the forex market.
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