What is the difference between the Forex Market and the Stock Market and where is it better to trade?
Trying to answer this one without sounding rude!
Forex Market is trading foreign currencies and the Stock Market is for trading stocks.
Most of the people here are trading forex so I think you’re going to get a weighted answer on which is best. If you’re thinking of trading either I recommend you do a lot of research and a lot of training.
Am a forex market trader nd can’t say much about stock market tho
I think there’s no much difference between the two, one just needs to understand the market and go for what is best for you
Stock markets close every night - therefore prices can gap next morning.
Stock markets are centralised markets - therefore trade volume figures are comprehensive.
the key difference is that the stock market is a centralized exchange and spot forex isn’t
the reason that’s so important, from the trader’s perspective, is that one (stocks) is a real, transparent, honest, objective market in which all brokers have the same prices and your broker IS actually a broker and wants you to win, not to lose, and there are no spreads at all, and lower commissions too, and volume figures are available (the only “voume” a spot forex “broker” can give you is of course their own volume, which doesn’t mean anything worth talking about)
you can get all those advantages with forex, too, but only by trading forex futures (which are centralized), not spot forex
harder to answer
if you want to trade stocks, then trade stocks; if you want to trade forex, then it’s a no-brainer that forex futures are better than spot forex, for all the hugely significant reasons mentioned above
nobody (in their right mind) who has enough trading capital to trade futures (realistically, you need at least a few thousand, rather than a few hundred, to do so) is going to choose to trade spot forex instead: that would just make no sense at all: one is all advantages and the other all disadvantages - you can’t get much more clear-cut than that
IMHO, and from a technical perspective, the stock market tends to go up, while FOREX pairs usually exhibit mean reversion. Stock prices “measure” the performance of companies, while currency pairs “measure” the strength of the economies behind the currencies. AAPL, TSLA of MSFT exhibit strong trends. EUR/USD, on the other hand, does not trend like that. And it makes sense, as the US economy and the EU economy are developed and relatively stable. The EUR/USD pair would exhibit a strong trend (in either direction) only if one of these economies would strongly overperform (or underperform) the other.
The currency market can be volatile and pairs can go up and down over a period of time.
For example EUR/USD in the year 2000 had a low value of 0.83 but just 10 years later in 2010 the value was has high as 1.45 then in 2022 it was back down as low as 0.96
That’s some huge swings.
Correct! Buy it still does not look like what AAPL or the likes do
The stock market has an inherent upward movement but not individual company share prices. So stock market indices tend to rise, but for short-term trading this effect is weak.
Agree with most of that, but most stock brokers do have spreads and fairly significant commissions, but technology has brought both down significantly if you choose somebody like Robin hood.
There are some very successful traders that trade spot forex. Spread betting is ultimately that and is tax free on profits so it’s not all negatives.
far from it … i think of spread betting as “almost all positives”, compared with spot and CFD’s
i think almost all the negativity one sees about spread betting in trading forums is hugely prejudiced, almost always out-of-date, pretty deeply misguided and mostly “just plain wrong”
In Forex, currencies are traded whereas stocks are traded in stock market and it’s the cardinal difference.
In Forex market, currencies are not traded rather than stocks and it’s a common difference. Besides that there are some other differences too.
Dont quote me on this but I believe I read where someone said stocks is like addition but forex is like multiplication. I entirely agree. I dont intend to be trading forever though, so at consistent intervals I put some of my forex trading surpluses into safe stocks.
Clever traders (not here) merge both the markets… Track XAUUSD in the FX Markets for entries and exits in the stock markets… Gold goes up on the daily charts… Buy the penny stock Gold Miners… Gold goes down on the daily charts… Sell the penny stock Gold Miners…
Back test 6 months of the rise and fall of the Gold Miners against the XAUUSD Daily chart… Applying the dates marked in the chart…
Spoon Fed strategies for your convenience… 60% gains can be found using even the simplest of trading concepts… DYOR
I have an open question in the broker discussion forum that dovetails with the concerns you kindly shared here: whether any spot forex/CFD dealers can be trusted, and whether it’s possible to consistently profit with them to a degree? Your thoughts/experience?
I’ve gathered that such dealers look to balance their member’s positions against the contrary positions of other members: but assuming that’s true, there are going to be moments where the volume composition of their members is 100% or thereabouts on the same side, however briefly? And if so, do such dealers hedge their risk with 3rd party liquidity providers? In any case, I’d think stop-hunting and otherwise intentionally meddling with the machine are a concern when working with such dealers? After all, even Goldman Sachs and major regulated banks and forms have been caught redhanded for dealing against their clients… and got a mere slap on the wrist by the SEC.
On the plus side of the spot/CFD dealers, the stop losses should be more guaranteed, as the action is fictional and there’s no concern of waiting for a counterparty to take your order, or only partially filling it? Unless the dealer is hedging, as mentioned above (and as I’ve gathered FXCM ostensibly used to do)?
Grateful in advance for your insight, and that of anyone else kind enough to share…
Forex is currency trading
Stock is trading shares in companies.
There is no better market to trade. Both are equally tradable, and It all depends on your trading Style and available capital
Also, you can trade stocks pretty much for free. Most FOREX brokers still charge you fees.
Believe me I wasn’t taking about fees and commissions.
By the way… if it’s free… YOU are the product.