Forex V/S Stocks – Which One Should I Choose?
Forex or Stocks
Forex or Stocks – which one should I choose? It is a common question that often arises in the minds of most of the newbies in the stock market and money market. Forex which stands for foreign exchange has earned a huge popularity in the trading world and in recent years, a quick shift has been observed for investors from stocks to forex. So, what is the reason that encourages investors to take interest in Forex? Or, is it actually a good bet to play in Forex than stocks? There are several questions that strike in the minds of new traders and finding a right answer can certainly bring peace in this situation. So, Forex V/s stocks is certainly a great topic which we will cover in this article and make you aware of which should you choose for your investments or for trading.
Forex & Stock Markets Have A Huge Difference
It is a reality that there are several differences lie in the forex and stock markets. Due to those differences, we can easily present individual aspects and qualities of each market to traders. Knowing these aspects, one can certainly make a wise decision for his or her investment in forex or stock markets. The contribution of these aspects sums up to a huge probability and opportunities to grow your profit in a small period of time. Though the expert traders believe that forex is like a sword having double edges and if you fail in handling it, it can bring a huge defeat to you and can certainly lead you to your profit as well as capital loss. So, we cannot deny with the risk involved in forex market and considering that risk, you should think of investing in the forex.
Although we highlighted the risk factor of forex market to you, it does not mean the stock market is fully safe and has no risk factor to care about. But, there are certain risks that are associated with market fluctuation and commodity price fluctuations which can be handled by following global market events and expert stock market advisers at some level. Just like risk factor, there are several other things on which we can evaluate forex and stock markets individually. So, let’s find out other major aspects in two of them that make one better on another.
Hours Of Trading
Forex market provides several opportunities for traders to trade due to its broadly open trading time. In this market, traders usually make transactions from around 7 PM EST to around 3 PM EST. The forex market remains open from Sunday to Monday always. Though in the stock market, you are allowed to trade in pre-fixed time slot between 9 AM EST to 4 PM EST and it remains open from Monday to Friday only. So, the time limit is a big factor that makes Forex better than Stocks. In Forex, you are allowed to enjoy several trading opportunities throughout a week and at any time. This way, you can easily grow your profits and can make good money.
Difference At Leverage
If we compare the stocks to Forex, it has less leverage as it provides fewer opportunities for growing your profit for your investment. However, in Forex, you get more leverage and get greater opportunities to enhance their profits on their investments. Here, brokers often provide 1:50 to 1:400 leverage. Finding more leverage means more ease in profit making. So, here again, forex wins from Stocks on leverage.
Comparing At Liquidity
In Forex, the market trading remains higher as compared to stock market. Apart of it, in Forex, your choices usually narrow down in 4 different major pairs for currency like GBP/USD, EUR/USD, USD/Japan Yen. Though in stocks, there are more than 40 thousand stocks to trade in. Having this much choice usually, makes things complicated and confusing for traders to decide which stock should be the best to trade in. It takes too much time to decide the best stocks and a wrong choice may bring disastrous results to your investment.
In forex, you don’t have to worry about commissions to be paid to anyone as it is free of all sorts of commissions like no brokerage charges, no fee for exchange, and no fee related to government. On the contrary, in stocks, there are huge commissions which you have to pay and that actually affects your profit. The broker can charge you a certain fixed amount as commission or you can choose to pay off with every selling or buying of shares in stock trading. Thus, forex trading is far better and more profitable for you as compared to stock trading. There is no stress of paying commissions that usually deducts the profit on your investment in forex.
No Influence To Market
The best thing of Forex is; it has a great scope and no individual investor has that power to manipulate the market or can affect the currency trading. In comparison to stocks, the market of forex is stronger that cannot be affected easily. In the stock market, the fluctuations come even by the decision of a single large company and that makes it actually weaker to Forex.
When we bring forex and stocks together for comparison, Forex emerges as the winner because of its greater edges in comparison to stocks. So, if you are a new in trading and do not want to take much risk with your investment, then go for Forex for better growth of your money.
Jake Smith is professionally a marketing manager and blogger by hobby. Currently he is associated with Team Intrexium, which help individuals to choose the right business platform with Fortunity Alliance Network. He has five years of experience in Forex Trading. Jake loves to share his information and experience with others.