In this day and age, the stock and foreign exchange markets are the most popular platforms in the trading world. If you are a newbie, it’s important to understand the specifics of each one of them in order to figure out where to trade best.
In today’s article, we should explore which market is better. This, in turn, will help you to evaluate their possibilities and make an informed decision.
Financial markets are typically divided into four categories: foreign exchange market, stock market, commodity market and cryptocurrency market. As the name itself suggests, the assets traded in the foreign exchange market are the currencies of the different countries.
1. The international foreign exchange market is basically a gigantic exchange office. The buy, sell and exchange transactions are performed by central and commercial banks, exporters, and importers, as well as other major institutions and businesses. Another name for it is Forex.
2. This market operates around the clock from Monday to Friday. Each day has three major trading sessions: Asian, European, and American. This is what makes the stock and foreign exchange market different.
3. Its daily turnover is more than 6 trillion U.S. dollars. By the end of 2020, it may reach 10 trillion U.S. dollars.
You can learn more about the foreign exchange market by reading the book 50 Shades of Forex.
1. The stock markets are local and exist in many countries around the world. There are the American, Asian, and European stock markets.
2. The stock and foreign-exchange markets have different trading platforms the market cap of which is not the same as well.
3. Securities are traded in the stock markets. Many traders prefer trading companies’ stocks.
4. Trading sessions are limited by the local time.
It wouldn’t be quite accurate to claim that one is better than the other. Each one has its own peculiarities which can be an advantage for one trader and a drawback for another. So, it makes sense to rely on your personal preferences.
Let’s explore the stock and foreign exchange market from the private trader’s perspective.
This is just a small list of advantages and features of these two markets. However, the provided information can already help you navigate the trading world and make the right choice.
We have provided you with a brief overview of the stock and foreign exchange market. In today’s world, traders don’t have to make a tough choice between the two. Modern brokers like Gerchik & Co allow their customers to trade both currency pairs and CFDs on instruments of the stock market all in one terminal (MetaTrader 4 and MetaTrader 5).
This way you’ll be able to:
Keep in mind that before you actually start making trades, you need to explore both markets and the ways for their analysis (fundamental, technical and indicator methods). You can make money in both the foreign exchange market and the stock market provided that you are using the trading system and do not violate the risk management rules.