Title: Forex Vs Stocks
1How Forex Market Differs from Stock Market? Why
you should choose forex?
2Introduction
- Before we talk about the Forex business it is
very important to know that Forex is a risky
business and it should be approved by the
government of your country. - Few countries do not allow Forex due to the
problem of money laundering. Otherwise, Forex is
a good business as a part-time or full-time job
opportunity. - Today we will look into some more detail about
trading stocks and forex and there advantages and
disadvantages. Then it will be easier to decide
a decision for the investors. Stock market
investing is for long term objectives, for
example, say 5 to 10 years. - But if your objective is short-term perhaps you
are looking to supplement your income giving up
your job and become a full-time trader. In that
case, forex might be the preferred approach.
There are several reasons.
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3Introduction
- First of all, if you trade in the stock market
literary there are thousands of thousands of
different stocks available to trade Globally. - The stock market is made up of multiple stocks
getting a Grasp any one individual could be
quiet difficult because you have to go through
lots of research, however if you inclined to do
this research or if you got the know-how, you
got the experience you can analyze company data,
balance sheet, then of course stocks can be very
profitable but there are a whole bunch of stocks
out there you need to do a lot of research. - On the other hand if you look at the forex market
it is generally made up of say 10 different
currency pairs so you can actually spend less
time in analyzing individual currency pairs
than the vast array of stocks available out
there, again it does depend on personal objective
and the amount of time individual can allocate
for this work.
4Introduction
If you are inclined to be a fundamental trader,
trading stocks could be the preferred way to go
because the fundamentals are a lot easier to
understand than the forex market. Certainly, if
you understand how to read a company balance
sheet and so forth but If you want to be a
technical trader then I think the forex market
might be easier. The forex market is huge around
5 trillion dollars a day which is made up of
retail and of course institutional players.
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5Stock vs. Forex
Cost
Time Flexibility
01
03
02
05
06
07
Accessibility
Financial Freedom
Technical traders preference
Is Forex is a Zero-Sum Game ?
04
08
Leverage-two-edged sword ?
6The cost of trading generally speaking is cheaper
in the forex market. So If you have a small
account you are going to waste all your money on
commission so You should choose Forex.
1. Trading Expenses in Stock Market vs. Forex
Market ?
72.Time Flexibility in Forex business than in
Stock business
- Forex market is open 24 hours a day no matter
what time zone you are in. But of course starting
times of the day will be more liquid but you can
trade different currencies in the different
time-zone. - You can also adjust that with your lifestyle if
you have other jobs to do in the daytime. On the
other hand, the stock market is open from 8 am to
4 pm. So after that, you cannot trade.
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8Generally, the major Forex pairs have super large
liquidity. Certainly the Euro against the US
dollar which is the most actively traded currency
pair out there. There is always a buyer and
seller on the other end because it's not just the
retail individual, there are many Corporations
who buy to hedge risk against other Investments.
3. Forex market is more Liquid than stock market
94. Accessibility in Forex is easier compared to
Stocks
- It is easier to get access to the forex market
than access in the stocks market. First of all,
you don't need a lot of money to start a
business. - Secondly, you have to go through lots of rigorous
government standards, rules, and regulations. - Thirdly if you have a computer and internet
connection that means now you have access to a 5
trillion dollar market a day and it is trading 24
hours compared to the stock markets. Because one
market is closed then another market is open. So
you have much more power over your time. Which in
the end matters.
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10If you want financial freedom for you, want
residual income or you are a student or doing
other jobs besides this you can do Forex trading
very easily and earn money. But without
knowledge of this industry, you should not come
here because it would be gambling. Here we are
not talking about gambling we are talking about
professional.
5. Financial freedom is higher in Forex than
Stocks
116. Technical traders prefer Forex market over
Stock market Technical is more angle towards
the forex market then towards stock markets
because the forex market is the largest market
which equals to 5 trillion dollars a day. It
shows the key level of support and resistances
which are more respected in the forex market
because there are many more players than they are
in the stock markets. Generally, the stock
market is mostly occupied by the fundamental
analyst. But it is a personal choice based on
objectives and individuals characteristics.
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12 Forex is a Zero-Sum game because if you are
losing the money some other people are gaining it
but stock trading is a positive some. Because
when you buy share you are participating as an
owner of the company.
7. Is Forex is a Zero-Sum Game compared to Stocks
?
138. Leverage is a two-edged sword in Forex It
can be good for you or it can be bad for you
because you can amplify your gain or you can
amplify your losses. Leverage in forex is
larger than stocks so it has the potential to
lose or gain a lot of money. The way people
understand leverage usually tends to be as the
thing that can make me a lot of money very
quickly but if I don't use it wisely it can also
lose my money. Leverage also shortens the
timeframe of losing money or gaining money so it
depends on the person how can use it by using his
experience, knowledge, and strategy.
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14 Conclusion
- It also takes lots of effort, analytical ability,
research and passion to do this business. If your
analysis is not that good and you are losing your
balance in forex business you can get help from
the professional traders. You will also find
thousands of free articles and videos on the
internet. You can go through them. The bottom
line is you have to be the master of Forex
Trading. After that, you can consistently be in
the profit at the end of the month.