The Difference Between Forex Currency Trading and Investing In Stock Market
People initially were not familiar with the word Forex since; it has only come into existence for the past fifty years. However; Forex and Stock market investing can be mystified with one another but in reality there stands a lot of difference between them.
There are too few differences linking the two. Let us discuss them specifically.
Access to the market
Forex currency trading do not have a listed market so it is termed as the counter trading whereas trading of stocks take place through listed stock markets for e.g. London Stock Market.
Since; the stock trading happens through the listed of the stock market there are certain limitations on when the investors or brokers can access them. But this is not in the case of forex.
The timings of the stock markets start from morning 9.30 to evening 4. Whereas the Forex Currency market is open 24 hours. People are open to place trades anytime with the Forex market.
Stock markets habitually have physical locations such as New York Stock Exchange. The stock trades are completed or done through their specific locations of the state/country. Whereas forex currency trading do not has to have central location for trading. Forex trades are placed from all over the world.
Long term vs. Short term
Surprisingly, Forex currency market is known to be quite capricious. Most of the currency trades are sold and bought in less than twenty four hours. This is the reason it is considered as a short term venture.
Whereas, trading of stock is normally measured as a long term investments. It is quite challenging to buy and sell the stocks and make a quick profit out of it. Sometimes, the shares are kept for longer period of time for better returns.
Forex currency market does not have a pre-requisite to have funds available. Since; the Forex trading are open for 24 hours, one can experience the high level of liquidity.
The stock market is not well thought-out to be very liquid. The time for the trading offered is limited and so does the admission to the stock market which adds of not being flexibility towards being liquid. Furthermore buying the stock a person requires having a full amount available and for selling them it requires a willing buyer.