Forex vs. Stock Markets

First, what is Forex? This is a short version of Foreign Exchange. It is also known as FX and 4X, but whatever name you use, it is the largest financial market in the globe. From 1997 to late 2000, daily Forex exchange has soared from $5 billion to over 1.5 trillion U.S. dollars…

Let’s look at a few reasons why forex trading is rapidly gaining popularity on other markets.

Business Hours

The Forex market sells for 24 hours a day from about 7:00 p.m. EST, Sunday to about 3:00 p.m. EST, Friday. The stock market is only open on Monday to Friday for limited hours.

Liquidity

Foreign exchange markets trade more than 1.5 trillion dollars every day, while the stock market has only about $200 billion. There are 7 major currencies exchanged on Forex, while there are over 40,000 stocks to choose from.

Commissions

No commission is charged on Forex while on the stock markets high commissions and transaction fees are charged.

Leverage

Forex Market offers high leverage ratios. Agents generally offer 100:1 to 400:1 leverage. This means that as a merchant using 100:1 leverage you control $100,000 with only $1,000 margin. Stock market investors pay full price for shares when bought unless there is a margin account and the leverage is usually with a margin of 2:1.

Low Minimum Investment

The minimum investment to start a Forex trading account is as little as $300. Most stock brokers require thousands of dollars as minimum to start up an account.

It is a perfect market. Forex trading has long been recognized as an opportunity to superior investment by large banks, multinational corporations and other establishments. Now, the Internet has shifted forex trading to individuals a lot. You could trade from your home, your office or anywhere in the world. You could also trade at virtually any time of day or night. You may choose to work part time or full time.

Obviously, the Forex market offers an important opportunity for those willing to invest time, focus and some money.

It is difficult for a new Forex trader to succeed in the Forex market without understanding the basics and how they function. This information may be obtained in a free Forex training program.