Judul : Is Forex Trading Better Then Stocks?
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Is Forex Trading Better Then Stocks?
Some investors may have trouble getting into forex trading because they still believe that trading stocks is better. This is usually because they don’t understand what forex is. With trading stocks you are trading tiny pieces of the company that can increase or decrease in value depending on how much money the company makes. Each stock can be sold for a profit in the short term and the long term. Most people who get into stocks are looking to get in it for more of a long term investment.
With forex trading the whole name of the game is short term. People are not concerned about holding on to anything for to long. Many forex trades are usually made within a 24 hour period and the dividend can be much higher then with stocks. In this article I am going to outline some of the benefits of forex trading versus the stock market so you can determine for yourself if forex trading is right for you.
Broker fees and forex trading
With stocks you have to pay a commission to your broker for the trades you make. Depending on whom your broker is these fees can be high and add up pretty quickly. So with a large number of trades your commissions can get out of control pretty fast. Forex trading offers a benefit in this area seeing as how forex trading is commission free.
With forex trading your broker does not take a commission for you trades. They set something called a spread on your investments. This is simply the difference between the asking price of whatever currency you’re buying and the selling price. So you won’t have to build up large fees.
Differences in time
When you’re trading stocks you are limited to the time you can spend on them. The market closes in the afternoon. If you’re trading the forex market the day last 24 hours, the trading begins way across the other side of the world in markets like Australia early in the week and doesn’t stop until the end of the working week in places like New York. So someone who may not have that much time on their hands can still get in on this market even if they are stuck in a full time job.
Limited size of the markets
The biggest difference in forex trading versus the stock market is the sheer size of the market itself. If you were to put together all the American stock exchanges they would only equal roughly about 100 billion dollars of daily activity. With forex trading the market handles anywhere from between 1.5 trillion dollars to 3 trillion dollars a day. The market is world wide and not restricted to any one place in the world. This allows for the currency to be more liquid meaning that there is always someone who is willing to buy and someone willing sell whatever currency they want.
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