Get the complete info & details of Forex Market Vs Stock Market.
- Forex Market:- The market in which participants are able to Sell, Buy, Exchanges & speculate on currencies. Foreign exchanges market is made up of banks, commercial companies, central banks, investment management firms, hedge funds, & retail forex brokers & investors, The forex market is considered to be the largest financial market in the world.
- Stock Market:- A stock Market or equity market is a public entity for the trading of company stock(shares) & derivatives at an agreed price.
Difference Between Forex Market Vs Stock Market.
| Forex Market | Stock Market | |
|---|---|---|
| Liquidity | High to very high -All Hours. | High during market hours. |
| Trading Hours | 7hours a day (Indian Market). 22 hours a day (International Market). 5 day weeks. | 9:00 am to 3:30 pm, 5 Days a week. |
| Minimum capital | Starts with a minimum amount. | Starts with a minimum amount. |
| Leverage or Margin | Yes, Can be up to 500:1 & so on. | Can be up to 40 times more for intraday. but need to clear outst&ing within 3 days. |
| Short Selling | No restriction due to forex is both way trading | Restriction on short selling & stop orders. |
| Confidence in securities | Major currencies will not fail. | Some companies will fails without notices. |
| How to Trade | Mostly trade online. | Trade online or phone call thru premises. |
| How to leverage can help grow your capital? | Intraday Trade, Your capital easily can growth few hundred percents, but easily get a margin call if you don’t know how to manage it. No need Q buy Long, Shorts. | Within days, capital can grow 5% to 20% ++ but same go opposite directions. Need Q during buy & sell stocks. |
Advantages of Forex Trading.
- The forex market is extremely liquid, hence its rapidly growing popularity. Currencies may be converted when bought or sold without causing too many movements in the price & keeping losses to a minimum.
- As there are no central banks, trading can take place anywhere in the world & operates on a 24- hours basis apart from weekends & holidays.
- An investor needs the only small amount of capital compared with other investments. Forex trading is outst&ing in this regards.
- It is an unregulated market, meaning there is no trade commission overseeing transactions & there is no restriction on trades.
- Low Tranjection cost.
- Ability to profit in both directions.
Disadvantages of Forex Trading.
- The major risk is that once the counterparty fails to deliver the currency involved in a very large transaction. In theory, at least, Such a failure could ruin to the forex market as a whole.
- High leverages may cause high loss.
Advantages & Disadvantages of Stock Trading.
| Advantages | Disadvantages |
|---|---|
| Low commissions. Trade from anyware. | High risk: If a company goes bankrupt and you have stock of that company, huge losses can occur. |
| Complete freedom No time bar. | Hidden Cost. |
| Make money in minutes. No investment limit. Quick returns. | Many brokers charge additional fees for trading penny stocks. |
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