Top Benefits of Forex Trading v.s Stock Trading

When it comes to comparing the ancient stock market (said to have started centuries ago) vs. the modern Forex market of currency trading; Forex seems to come out on top with major advantages for short and medium-term traders. With favourable factors in market size, trading time, and scope of focus to name a few, Forex is the more attractive trading option for many depending on your trading style.

Here are a few Advantages of Forex Trading vs. Stock Trading:

1. Easily Accessible

Compared to stocks, you don’t need a hefty start-up capital to begin with. This easy entry to trade makes forex extremely attractive to new traders across the globe. While easily accessible, this doesn’t equate to becoming a skilled trader immediately. Flexing your trading muscles and gaining the knowledge will take time, but at AIFX Learning, we can assist you in making forex trading easier. Read more about our unique approach of blending robot trade copier service with human expert advisors.

2. Trade All Day, Every Day

A unique strength of this relatively new forex market is that trading is not limited to the time constraint of a central marketplace. With the ability to trade virtually in an over the counter market (OTC); you can trade 24 hours a day, 5 days a week as opposed to a set amount of hours per day. In this global online exchange, the forex market can be active throughout the day depending on which country’s trading day is starting or ending. I.e When the US market is calling it a day, Tokyo’s trading is just beginning.

3. Size Matters: Volume & Liquidity

Why does the vast size of the Forex’s $5 trillion per day compared to the $2 billion per day (world’s combined stock markets) matter to a trader? With this large market volume, you can generally buy and sell as quickly as you’d like as you can be sure there’s always someone willing to trade back especially with the major pairs such as EUD/US, GBP/USD, USD/JPY etc. High Volumes often mean high liquidity. And liquidity leads to lower transaction costs and tighter spreads (the difference between the buy and sell price); both enticing benefits of trading forex vs. stocks.

4. Lower Trading Costs

While many online stock brokers have also started to offer zero commissions, forex brokers generally charge minimal or no commission for online trades. With a tight and fully transparent spread; forex boasts the lowest trading costs of any other market. The tight spread is what brokers earn their revenue from and a fully transparent spread is valuable in that you can gauge the cost of your position size before executing your trade.

5. Narrow v.s. Wide Focus

Eight major currencies are so much easier to monitor than thousands of stocks. Forex is traded in pairs and therefore traders can keep an eye on the economic trends for an indication of which forex pair to trade.

6. Trade through Rising or Falling Markets

No matter the market condition, you can continue trading whether you think the currency price is about to rise or fall. Some trading and strategies work well in volatile times of quick price changes and when the price is about to fall; this can be quite risky but highly rewarding if you can get the timing right. Try our free Quantum demo to enable you to test your trading skills in market conditions without real capital.