What’s the Difference Between FOREX and Stock Market?
by myauthor on Dec.29, 2011, under investment
FOREX and stock markets are almost similar and you can find lot of common things between them. Regardless if you are trading FOREX vs.. stocks, you use the same charts and trading tools. Some trading platforms even allow you to trade both at the same time.
Technically, there is no difference in trading FOREX vs. stocks. There is only one exception in opening and closing positions the same way. FOREX market is open 24/7, while stock exchanges in various countries open and close at regulate business hours. This is the reason why you should close all your stock positions before stock exchange closes if you trade intraday.
The thing that a particular stock or a currency pair represents is the biggest difference between. Stocks may represent single companies or baskets of companies, however in Foreign Exchange, currency pairs represent economies of entire countries. For instance, the entire European economy vs. the entire US economy is represented by the EURUSD currency pair.
So in case that there is any economic events happening in any European country or in the US, the price will also be affected. For stocks, whatever bad news about Microsoft, will not affect Waymart. But if they compete on the same market, like Microsoft and Apple, each will be affected if something happens in any of them.
You need to understand what you want to achieve in trading in deciding if you want to trade FOREX vs. stocks.
FOREX is extremely risky and volatile, but gives you great opportunities to make a big buck, while good quality stocks are considered to be safe, but give you a little return.
If playing safe is all you need, then go for quality stocks. Go for FOREX if you want to have both fun and money!
