Stocks or forex market?

Stocks or forex market? All you need to know about trading 

The foreign exchange market is also known as the FX market, or the forex market. Global trade that takes place between two countries with different currencies is the basis for the forex market.  

The forex market is over thirty years old, established in the early 1970′s. However, unlike with the stock market, in forex, you don’t invest in a business or its stock, but in the rise and fall of national currencies and the exchange rates between them.  

Another difference between the stock market and forex is the vast trading volumes that take place on the forex market. More than $5 trillion are traded daily on the forex market. This amount is dramatically higher than the amount traded on the stock market of any country or region combined. Governments, banks, financial institutions, and retail traders all take part in the exchange and speculation of currencies and their exchange rates on the global stage.   

This high daily turnover in forex provides a wide range of advantages to forex traders because the deep liquidity translates to faster order execution and better pricing. When there’s almost limitless competition for an asset, that asset becomes much cheaper to afford and the same principle is true in forex.   

The difference between the stock market and the forex market is that the forex market is decentralized and global. On the other hand, the stock market is limited by the national stock exchanges that exist in each country or region. The stock market is based on businesses and products that are available within a country, and the forex market takes that a step further to include any country in the world.  

The stock market has set business hours. Generally, this is going to follow the business day and will be closed on banking holidays and weekends. The forex market is open generally twenty-four hours a day because of the vast number of countries that are involved in forex trading. As one market is opening, another country’s market is closing. This is how the forex market manages to be available for trading throughout the day.  

Also, the stock market in any country is going to be based on only that countries currency, say for example the Japanese yen, the Japanese stock market, or the US stock market and the dollar. However, in the forex market, you can gain exposure to hundreds of different currencies and all the opportunities that come with them.   

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