Why Trade Forex Market (FX): Stocks Versus Forex

The New York Stock Exchange has more than 2,800 stocks listed. The NASDAQ is home to an additional 3,300+ listings. Which one do you want to trade? Do you have the time to keep up with so many businesses

July 11, 2022 - 03:10 PM 346 views

Why Trade Forex Market (FX): Stocks Versus Forex

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The New York Stock Exchange has more than 2,800 stocks listed. The NASDAQ is home to an additional 3,300+ listings.

Which one do you want to trade? Do you have the time to keep up with so many businesses?

Numerous currencies can be traded when it comes to forex, however the majority of market participants only trade the seven major pairs.

Seven major pairings are significantly simpler to monitor than thousands of equities.


Examine Mr. Forex. He is extremely arrogant and attractive. Mr. Stocks is hopeless!

One of the many benefits of the FX market over stock markets is simply that. More examples follow:

24-Hour Market

The operating hours of an exchange determine the stock market.

For instance, the majority of stock exchanges in the United States opens at 9:30 am EST and close at 4:00 pm EST.

The currency market operates continuously around-the-clock.

Customer service is typically offered around-the-clock, and most brokers are open from Sunday at 5:00 PM EST through Friday at 5:00 PM EST.

You can create your own trading schedule since you can trade throughout U.S., Asian, and European market hours.

Minimal and No Commissions

This is less of an issue now that many internet stock brokers provide $0 commissions.

For trading currencies online or over the phone, the majority of forex brokers don't charge a commission or additional transaction costs.

Forex trading costs are lower than those on any other market when the spread is tight, stable, and completely visible.

The bid/ask spread serves as the primary means of broker payment.

More active and Liquid trading

The average daily turnover on the FX market is $6.6 trillion.

A tiny portion of this is seen in the stock market.

No Uptick in Short Selling

The currency market does not have any restrictions on short selling, in contrast to the equity market.

Regardless of whether a trader is long or short, or which direction the market is headed, there are trading possibilities in the currency market.

There is no directional bias in the market because currency trading always entails purchasing one currency and selling another. As a result, you can always trade in a market that is increasing or sinking.

Minimal Market Manipulation

How frequently have you heard that "Fund A" was purchasing or selling "X"? When enormous funds purchase and sell stocks, the stock market is extremely vulnerable.

With currency trading, it is extremely unlikely that any one fund or bank will control a specific currency due to the enormous size of the forex market.

Because of the FX market's high level of liquidity, serious currency manipulation by a single firm is virtually difficult when the main currencies are actively traded.

Large net worth individuals, banks, hedge funds, governments, retail currency exchange companies, and hedge funds are just a few of the participants in the spot currency markets, where liquidity is unheard of.

Less Likely to Have an Impact on the Market are Analysts and Brokerage Companies

Have you recently watched TV?

Have you heard of a particular Internet stock and the accusation that an analyst at a reputable brokerage business kept his or her recommendations, such "buy," even though the stock was falling sharply?

It is in these connections' nature. No matter what the government does to intervene and prevent this kind of conduct, it hasn't stopped yet.

IPOs provide significant revenue for brokerage firms as well as the companies going public.

Relationships are valuable to both parties, and analysts work for brokerage firms that require the companies as clients. That dilemma won't ever go away.

The primary market for banks worldwide, foreign exchange, brings in billions of dollars each year and is essential to the functioning of the world's markets. Foreign exchange analysts primarily focus on the forex market analysis, with relatively little impact on exchange rates.

ADVANTAGES

FOREX

STOCKS

24-Hour Trading

YES

No

Minimal or no Commission

YES

Maybe

Liquidity

HUGE

Meh

Short-Selling without an Uptick

YES

No

No Market Manipulation

Depends

No

The scoreboard between Mr. Forex and Mr. Stocks appears to reflect a convincing victory for Mr. Forex in the fight between forex and stocks! Will Mr. Futures aim for a 2-0 score?

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