Stock market and the Forex market have a number of differences between them. So today we will discover what exactly these differences between two markets are.
1. The work on the stock market starts at 9.30 in the morning and lasts until 16:00 pm (EST). Therefore, traders engaged in most of the transactions during the day, can trade only during this time frame.
In contrast, the Forex market operates around the clock (except Saturday and Sunday), which allows the trader to not adapt to the market and to choose the most convenient and suitable time for trading.
2. In view of the fact that the stock market shares are traded by thousands of different companies it’s hardly difficult to predict what stocks and which companies will increase in prices or, conversely, decrease. It is also not easy to be fully acquainted with all of them.
For this reason, the choice of some major companies to follow them from the myriad of available can be challenging.
However, on Forex, in most cases, the trade is carried out by several specific currencies, the price of which is in US dollars. Also, the cost of these currency pairs against the dollar and against each other is more influenced by economic events and news in contrast to the company's shares on the stock market.
It is always easier to analyze the objective economic factors affecting the situation inside the country you’re interested in because economic news is always freely available through the regular publication of the media.
3. In times of deteriorating economic situation in the country and a permanent decline in the market, investors, working on the stock market, find themselves in a very difficult situation. At such times their income is reduced very critical, and in some cases it can fall to zero if the investor does not take money from a loan broker to play a game on the decline.
Given the cyclical development of the economy, since after its growth always comes recession, the duration of which can vary from several months to several years. At this time in the Forex market, unlike the stock market, investors are trading; buying increasing in price and selling the currencies that fall in value. This is the basic principle of doing business and extract profit from it in the Forex currency market.
However, despite the number of advantages of the Forex over the stock market no one can guarantee you one hundred percent win. That is why a constant learning, experience and analyzing are extremely important at any modern market.