Comparing Forex Trading And The Stock Market

There are a lot of advantages for trading currencies on the foreign exchange market, the stock market does not have. Here are a few.

A 24 hour market - Foreign exchange markets are open to the public to do all day. Small investors are starting to craft in their spare time can benefit because they do not need to juggle their plans for business opportunities. This means that if you choose Forex, you can plan the trade, when it worksfor you. It does not matter if you're a night owl who wants to trade are one in the morning. It is to open a bank in Tokyo.

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Low transaction costs - Since Forex brokers work on commission, and no hidden costs lurk in small print, you do not pay a lot for business. Broker fees are built directly in trade, the bid / ask spread. This spread is the difference between the purchase price and sale price of the currency, and is in the so-called periodPips.

Leverage / Margin - Trading on margin means that forex traders have more influence on trade. It also offers the possibility of a very high profit only on a small investment to make. If you find a broker so that a margin of 100 to 1, you can purchase $ 100,000 in the currency with only $ 1000 deposit. Remember that leverage works both ways and can lead to large losses, if you're not careful.

Fast running Commerce / high liquidity - If you buyCurrencies means that the trade-in cash - and is the only liquid investment. Trades can be executed almost immediately, and there is no need to sit around and wait to pass through.

Difficult to control - The Forex market is so big it almost impossible for one person, a bank, a fund or a government, is long-term influence. The bag, however, influenced by such small things can be a TV analystnegative forecast.

Small sample size - Stock trading means that you have thousands of options, including international companies, large and small companies, and newly issued IPOs. It's difficult to follow everything. In Forex trading, on the other hand, there are seven major currencies to follow. That means you can devote plenty of time to each. In fact, there are a number of successful Forex traders who don't even trade in all seven currencies. You can just pick three or four and stick to them without a problem.

No bear markets - Because it's possible to trade short or long, you can make money whether the prices are up or down. You just have to make the right guess.

Comparing Forex Trading And The Stock Market

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