Forex Trading vs Stock Trading

As more investors grow dissatisfied with the performance of the domestic stock markets, they are beginning to explore some options for international investments. While there are a number of opportunities to get involved in foreign markets, foreign exchange trading is quickly becoming one of the most popular. Investors like forex trades because they are made quickly and with minimal hassle. There are several definable benefits to foreign exchange trading.

The first benefit is that forex is liquid. In fact, forex is the most easily sold form of investment in the world. Since you are dealing with cash, forex trades are never on the block for long. There is always someone, or some bank, willing to make a trade. This liquidity is what makes trading forex so appealing to many. Even in falling markets, you have the ability to sell whenever you are ready.

Another benefit of foreign exchange trading is that forex trades are available 24 hours a day. Since the medium is the world’s currencies, the market must be open 24 hours a day since banks in different time zones are always open. The development of internet technology has opened up a world where trading can happen instantaneously at any time of day. Since many forex traders work full time jobs during the day, the ability to sit at home and make trades in the evening, even after their own nation’s markets have closed, is very important.

Some foreign exchange traders like this platform because forex trades rarely charge any commission fees. When trading regular stocks and even some futures, the investor’s profits take a substantial hit from the commission based fee structure in which the brokerage firm gets a percentage of every trade made. With online forex trading though, these commissions are not applicable as you are making the trades yourself. It may seem like small change, but over the course of a year, many forex traders find that they have increased their portfolio substantially because they are able to invest the money that normally would have gone to commission fees.

Investors who limit their portfolios to domestic common stock often find that their trading activity must come to a halt in a declining market. You may hear them talk of “riding out the storm.” For those who make forex trades however, the normal rise and fall of the world’s economies does not affect the nature of the trading. Forex trades depend only on the exchange rate. The actual value of the currency doesn’t matter. For this reason, you will see that foreign exchange trading remains active even when trade volumes of common stock are very low.

 

6 responses to “Forex Trading vs Stock Trading

  1. I have not traded forex before, but I have traded stocks for about 30 years. One thing I’m quite sure they both have in common is the need for discipline. No matter what type of trading your doing it’s important to have a trading plan and follow it.

  2. My husband and I traded forex for about a year and lost a lot of money. We had courses and software, but in the end, it wasn’t for us.

    I have started a new internet marketing venture and would like you to take a look at it and tell me what you think.

    Thanks

    Denise
    http://www.dubli-network.blogspot.com

  3. Nice to see your blog about work from home and top collections here.

  4. this Forex Trading vs Stock Trading « Top Work From Home Blog is great.
    Have a look at this too source2update.com

  5. Good writeup, my investment adviser always said.
    .. Many people think that they are going to get rich off penny stocks, and they
    fail to recognize the long-term growth with compound interest on a basket
    of blue-chip stocks. While selecting companies for
    potential growth is the key, you should always balance your portfolio with several major companies as well.
    These companies have a track record for growth, so their stock is likely to perform well and consistently.

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