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Stock Trading Or Forex Trading?

In fact, some investors may obviously have trouble getting into foreign currency trading because they still continue to believe that trading stocks is much better. Well, this is commonly because they actually do not understand what exactly forex is. Of course, with trading stocks you are really trading only tiny pieces of the company which can possibly decrease or increase in actual value depending on how much money exactly this company makes.

However, with foreign currency trading the entire name of the game is definitely short term! Without any doubt, many currency trades are commonly made within a round the clock period. Besides, the dividend can actually be much higher than with stocks. And so in this article I will outline several main benefits and advantages of foreign currency trading versus stock market, so that you are able to determine for yourself whether this kind of market is right and good for you.

First of all, let’s talk about currency trading and broker fees. In fact, with stocks it is necessary for you to pay a certain commission to your broker for those trades that you make. Moreover, depending on whom your broker actually is those fees can be quite high and also add up very fast. Thus with a big number of trades your commissions definitely can get out of your control very quickly. For sure, forex trading certainly offers an advantage in that area seeing as how forex trading is really commission free.

Secondly, let’s take a look at differences in time. Of course, when you are trading stocks you are actually limited to that time which you are able to spend on them. Well, this kind of market closes in the afternoon. However, when you are trading on the forex market the day definitely lasts twenty four hours and the trading starts way across the other side of our planet in the markets such as Australia early in the week and also does not stop until the end of our usual working week in such places as New York.

And finally, let’s mention limited size of these markets. In fact, the biggest existing difference in forex trading versus the stock market is definitely the actual size of the market itself. And so if you were actually put together every American stock exchange, they would just equal nearly around one hundred billion dollars of usual daily activity. However, with foreign currency trading the market really handles simply anywhere from between one and a half trillion dollars to three trillion dollars per day. In addition, this kind of market is worldwide and also not restricted to any place in the world. Well, that allows for the foreign currency to be more liquid!

Before you decide to make a forex investment or start forex trading yourself, better find a good forex book and read more about forex market – this will save you from tons of troubles and traps.


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