Forex Market Vs Stock Market. Advantages and Disadvantages

Get the complete info & details of Forex Market Vs Stock Market.

  • Forex Market:- The market in which participants are able to Sell, Buy, Exchanges & speculate on currencies. Foreign exchanges market is made up of banks, commercial companies, central banks, investment management firms, hedge funds, & retail forex brokers & investors, The forex market is considered to be the largest financial market in the world.
  • Stock Market:- A stock Market or equity market is a public entity for the trading of company stock(shares) & derivatives at an agreed price.

Difference Between Forex Market Vs Stock Market.

Forex MarketStock Market
LiquidityHigh to very high -All Hours.High during market hours.
Trading Hours7hours a day (Indian Market).
22 hours a day (International Market).
5 day weeks.
9:00 am to 3:30 pm, 5 Days a week.
Minimum capitalStarts with a minimum amount.Starts with a minimum amount.
Leverage or MarginYes, Can be up to 500:1 & so on.Can be up to 40 times more for intraday. but need to clear outst&ing within 3 days.
Short SellingNo restriction due to forex is both way tradingRestriction on short selling & stop orders.
Confidence in securitiesMajor currencies will not fail.Some companies will fails without notices.
How to TradeMostly trade online.Trade online or phone call thru premises.
How to leverage can help grow your capital?Intraday Trade, Your capital easily can growth few hundred percents,
but easily get a margin call if you don’t know how to manage it. No need Q buy Long, Shorts.
Within days, capital can grow 5% to 20% ++ but same go opposite directions. Need Q during buy & sell stocks.

Advantages of Forex Trading.

  • The forex market is extremely liquid, hence its rapidly growing popularity. Currencies may be converted when bought or sold without causing too many movements in the price & keeping losses to a minimum.
  • As there are no central banks, trading can take place anywhere in the world & operates on a 24- hours basis apart from weekends & holidays.
  • An investor needs the only small amount of capital compared with other investments. Forex trading is outst&ing in this regards.
  • It is an unregulated market, meaning there is no trade commission overseeing transactions & there is no restriction on trades.
  • Low Tranjection cost.
  • Ability to profit in both directions.

Disadvantages of Forex Trading.

  • The major risk is that once the counterparty fails to deliver the currency involved in a very large transaction. In theory, at least, Such a failure could ruin to the forex market as a whole.
  • High leverages may cause high loss.

Advantages & Disadvantages of Stock Trading.

Low commissions.
Trade from anyware.
High risk: If a company goes bankrupt and you have stock of that company, huge losses can occur.
Complete freedom No time bar.Hidden Cost.
Make money in minutes.
No investment limit.
Quick returns.
Many brokers charge additional fees for trading penny stocks.

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