A major difference between the Forex and stock market is the amount of trading There are 4 major currency pairs; EUR/USD, USD/JPY, GBP/USD, USD/CHF and you will find 3 commodity pairs, USD/CAD, AUD/USD, NZD/USD. More on this later. All other currency pairs are called cross currencies, which are basically different mixtures of the very same currencies mentioned previously. Currency trading is simpler to follow along as you just follow these rather than picking form 10,000 of shares to find the very best deal.
The one thing a Currency trader has to do is keeping up on the information regarding these major 8 nations.
Stocks market and decreasing volumesFairly often, the stock markets may hit a lull, Leading to shrinking volumes and Action. As a result, It Might Be Difficult to open and close positions when you Want To do so. In downward markets, it's a hard job for a stock trader to create decent or Even profits. It is Hard to sell from the U.S. Stock market as it understands strict principles and regulations. On the other side we've got Forex which offers you the Chance to Gain in both up and downward markets. The same time within every transaction. So shorting is, hence, part Single trade you make. In addition, since the currency market is so liquid, traders are not Required to await a swing high in order to go into a sell position that's the rule in The normal stock market.
Liquidity of Currency Forex marketOn account of the high liquidity of the foreign exchange market, the margin is low and also the leverage is large. This is not possible to find about the normal stock market, since it will not provide you such low margin rated. Most margin dealers in the stock market need at least half their value of the investment available in their margin balance. As a Forex dealer we'll only need as few as 1%! Apart from that, commission in the stock market is way greater than in the foreign exchange market. Traditional stock brokers request commission fees in addition to their spreads, plus the fees that have to be paid into the market. Forex brokers only take the spread as their fee for an accomplished trade. Next part coming out soon Stay tuned! Check out our strategy page: Trading Strategies for forex and crypto.
Source: Trading manual Part 2: Forex vs Stocks