Forex Daily Outlook
Difference Between Forex and Stock Markets
on Forex and stock markets are two very different things, each
requiring different strategies. There are also advantages and
disadvantages to both markets which should be considered before
starting to trade in either.
There is a fundamental difference
between the two markets related to what is actually being bought and
sold. When trading on the stock market you are buying and selling
shares of individual companies, whereas in Forex you are buying and
selling different countries’ currencies. On the Forex market,
aren’t buying anything physical but actually money itself.
currencies that are commonly traded include the US dollar, Great
British pound, Japanese Yen, the Euro and the Swiss Franc.
of this fundamental difference, stock markets usually trade in shares
of businesses that are specific to a certain country, which is why
there are different markets around the world. As Forex is a global
market, it has a much greater reach that includes almost every country
on Earth without having anything to do with individual companies or
striking difference between Forex and stock markets is that Forex
trades a much greater amount of money every day than any of the stock
or future markets. On average, the Forex market trades $4 trillion
dollars each and every day, dwarfing any other market on the planet.
This makes it an extremely attractive proposition for establishments
such as banks and other financial institutions, and as such they make
up the major players of the Forex market. It is also what attracts
hundreds of thousands of private traders from all around the world.
big difference is that trading on Forex can take place all day, every
day, apart from a short break each weekend. This is because Forex is a
global market, and hence “follows” the daytime
around the world,
usually starting in Australia.
For this reason Forex traders can react to any changes immediately
without having to wait for the market to open in the morning. The only
exception to this is a few hours every weekend when the market is
One advantage of Forex trading is that when you place an
order or make a trade it happens instantly. With stock markets, there
is often a delay between placing an order and the order going through
which can cause a lot of problems. This also means when monitoring the
Forex market, the data you see is in real time, which makes trading a
lot more reliable even if the market in particular is unstable at a
things that make Forex unique compared to other markets include the
much larger numbers of people involved, the wider range of possible
factors that can affect the market prices and the sheer volume of
trades each day. To become a successful Forex trader, it is important
to understand that there are many different factors that
necessarily affect stock markets which can change currency rates
quickly. These can include economic factors such as inflation levels
and interest rates, political situations such as a change in a
country’s diplomatic relations and numerous other things.
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