There are many misconceptions about financial investing. Investing in the stock market (shares) is a good way to take advantage of your savings, but there are other less complicated and less demanding ways to speculate, such as forex trading (through traditional forex brokers or regulated binary options brokers) that are just as profitable. Forex trading has advantages over investing in the stock market which compels traders to opt for the former, there are some differences between currency and stock market, please find the main ones below.
Number of trading instruments (assets)
In forex trading, there is no need to monitor thousands of stocks, there are about 4,500 stocks available for trading on the New York Stock Exchange and an additional 3,500 stocks on the NASDAQ, making a total of 8,000 stocks, a large portion of which can be found at online brokers. . In forex trading, you can focus only on major currency pairs with low spreads, we have about ten (EUR/USD, GBP/USD, USD/CHF, USD/JPY, USD/CAD, AUD/USD, EUR /GBP, EUR) (includes /CHF, EUR/JPY, NZD/USD), thirty additional currency pairs commonly found among brokers may also be interesting to study, not to mention that some exotic currency pairs are also available.
Market order execution
Unlike the stock market, there is no difference between the price displayed on your trading platform and the effective price in the forex market. Outside of “normal” trading conditions, it is possible to notice slight “slippage”, for example during important economic announcements such as non-farm payrolls (the most important economic announcement in forex trading). What you see on your forex trading platform is the price you get at the time of execution because the forex market has price certainty and trading takes place in real time.
In some markets, such as the stock market, certain trading restrictions are imposed, such as short selling. Such a strict system is by no means present in the forex market which operates on a two-way process; When buying a currency pair we buy the base currency (BASE/XXX) and sell the counter currency (XXX/CTPT), and vice versa when a currency pair is sold.
In the foreign exchange market, traders can take advantage of the immediate impact of a major figure in the economic calendar, a sudden big news, a change in interest rates from the central bank. This spontaneity in the forex market causes significant price fluctuations and creates many daily investment opportunities that can be taken advantage of. In the equity market, the sensitivity is low; it is necessary to wait until a specific economic event (such as the release of quarterly sales figures or the announcement of a company’s IPO) concerns a share of a particular company in order for the effect to be felt on the price. Occurs infrequently and limits short-term trading opportunities.
Access to investment
Unlike brokers specializing in stock trading with forex brokers and regulated binary options brokers, it is not necessary to have a capital of several thousand euros to start speculating, usually such brokers are accessible from only one hundred euros. Know the minimum deposit is enough to invest in Forex!
Those who want to invest their money must be aware of the requirements of the stock market, it is possible to speculate about stocks in forex trading or binary options trading but in a simplified way, so this type of investment is recommended for beginners, forex trading is an effective solution and stock An alternative to the market, so what are you waiting for to get started?! 😉