Forex Vs. stocks

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Forex and stocks differ in many ways, and so do their respective markets. Below is a comparison table that helps to outline the differences between the two:

 

Forex / Forex Trading

Stocks/ Stock Trading

Forex trading is the buying and selling of one currency for another. This market deals solely with currency, the value of which is determined by the market forces of demand and supply, of which there are less than for stocks, helping better analysis and decision making Stock trading is the buying and selling of company stocks, the value of which are determined by various factors such as profit/loss, market sentiment and more.
The Forex market is always highly liquid, which makes it a fast-paced trading space. As money is always on call, as long as you have it, it can easily be converted into another currency when trading. The stock market has a lower level of liquidity. Trading stocks means owning shares, which en.tails regulations surrounding ownership. Regulations mean this market operates at a slower pace than the Forex market.
The Forex Market is open longer. As it spans the globe, covering the numerous business districts and time zones, there is less down time. This means there are more trading opportunities available to you due to the higher volume of trading. The stock market operates on a standard business day schedule of roughly eight hours. It opens for trading in the morning and closes in the afternoon, at which point all trading stops until the next business day.
The Forex Market does not have a central location or hub for trading activity which means traders can participate from wherever they are. All that is required is an internet connection and computer, iPad or smartphone. Stock markets are centralised with one location serving as the hub for all trading activity. It is here that all trades are entered or exited. Some examples include the Australian Securities Exchange which has hubs in Sydney, Melbourne and more or the New York Stock Exchange.
In the Forex market, a trader can buy or sell directly as the market is not centralised. In the stock market, there is always a middleman between the buyer and seller such as a broker, which means fees for the trader.
Forex trading essentially comes down to tracking less than ten major currency pairs. Whilst acquiring sound understanding of the market, analysis methods and keeping abreast of relevant current news takes effort, keeping tabs on currencies is an easier task than for stocks. Stock trading means not only keeping tabs on thousands of stocks currently on the market, but it also requires keeping up-to-date with economic factors, company announcements, profit and performance information, industry news and general market sentiments and movements.
Forex trading occurs within a short timeframe. Traders buy and sell currency over small increments of time eg minutes, hours or days. It is an action of making money rather than an investment per se. Stock trading ie investing in shares is a relatively long-term investment where it can potentially take years to yield the desired return. Investing in shares often forms part of an investor’s long-term financial strategy.

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