Forex vs Stocks which is more profitable?
Well, now we will continue to learn more reason why trade forex?, this time we will discuss the battle between Forex vs Stock trading.
Which is superior between the two, this is further education which is the reason why to trade forex.
We have written this topic before, but this time we will try to make a comparison that is easier to understand.
On the stock market, there are thousands of types of stocks that you can choose from as instruments.
Reportedly there are 2,800 stocks listed on the New York Stock Exchange.
Meanwhile, on NASDAQ there are around 3,100 types of registered shares.
With that much amount, it might be confusing you will choose which stock you want to buy.
In forex, there are dozens of currencies as trading instruments
But most choose the major currency to trade.
In terms of trading instruments, forex is easier to choose than stock instruments, this is the initial battle, and forex is the winner in the first round.
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24-hour market Forex vs stocks
The forex market is open 24 hours, for 5 days a week.
While the stock market operates during working hours which usually ranges from 8 hours a day, from morning to evening.
In terms of time, forex gives traders more time freedom.
They can trade morning, afternoon, evening or night, or choose-in London and New York sessions, adjusting to the daily bustle of traders.
Thus in forex, you are free to make trading schedules more flexible.
Whereas if you choose trading stocks you have to go to the market every morning and go home in the afternoon.
Of the two comparisons, the forex has a higher winning score in terms of time worked.
Minimum average cost Forex vs stocks
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In forex trading there is no party to a monopoly, most brokers make profits with low spreads, some even offer only 1 pip.
And also to start forex trading does not have to be with large capital.
If in stock trading the cost to buy shares is greater and determined by specialists who monopolize for their needs.
So the possibility of widening spreads is a natural thing.
And if you have money of 100 $ you can only do transactions with the amount of 100 $.
But not on forex, with a capital of 100 $ you can trade this equivalent to 1000 $ because there is leverage in forex.
Instant execution market execution Forex vs stocks
That’s right, with the trading platform provided by the broker you can do instant execution at the best price right now.
You can also make pending buy limit orders when looking at the best price according to your analysis, or sell limits, buy stops and sell stops.
Brokers will usually execute your order in accordance with what you are asking for.
But it is possible that in high volatility market conditions this can cause freezes, where your order may not be executed due to rapid price movements.
In stocks, you will only buy prices at that time and you need to always monitor the development of stock prices to get the best price, according to you.
In terms of order execution, forex is still better than stocks, the score here has been three zeros for forex.
Short selling forex Forex vs stocks
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In general, a forex trader may make short selling, regardless of whether he is a trader with a typical short-term or long-term, there is no limit to short selling.
In price movements that are rising, you can do a buy and take action after only a few minutes when your target has been reached.
And if a downtrend trading, you can sell and release it after a few minutes later when your target has been reached.
Maybe in stock trading, you have to wait a long time to reach the stock price to rise at a certain level.
Thus in this case forex gives traders the advantage they can make more transactions in one day, or commonly called scalping trading.
No middlemen involved
In a centralized market does have advantages and disadvantages.
But when dealing in a centralized market there will be a middleman who connects the seller with the buyer which allows for swelling costs.
The involvement of this middleman is the cause of rising costs for trading instruments.
The forex market is a market that is not centralized, there are many dealers who compete to give the best price to traders.
So the trading costs will be lower than the trading costs on stock trading.
You can buy and sell at any price in the forex market, anytime.
No anyone controls the market.
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In the stock market is very vulnerable to large purchases.
This is because market capitalists which can sometimes be controlled by making large purchases.
In forex, a number of big players such as the government, banks, hedge funds, and large fund owners are only part of the forex market players.
But it is rare for one of them to be able to control prices for the long term.
With this condition, even if you do technical analysis, the possibility of turmoil is rare, but you can anticipate in advance.
Analyst broker has less effect on the price
Maybe you have heard a program on TV that broadcasts about a stock analyst giving recommendations to buy when conditions are declining prices.
In stock price movements there is a possibility that an analyst gives effect on the condition of stock prices.
But not in forex, you will see many brokers who have analysts to help clients in determining their position.
But these analysts are very unlikely to influence price movements.
A forex analyst will only convey what he sees and try to describe using their language.
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In stock trading, for you to be able to get profit then the thing you have to do is buy stocks if the stock value goes up you will get profit when you sell it.
And vice versa if you find the value of the stock decreases then if you sell it will get a loss.
In forex trading, you can take a buy if you predict the price of a pair will rise.
And you can take a sell if you predict the price of a pair will go down because in forex trading we know a currency pair called a pair.
Of the two buy or sell options on forex having balanced profit and risk possibilities.
You must be good at doing a market analysis to determine the direction of the trend and also the price movement.
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You may already be familiar with stock trading and experience with it.
But you might be surprised at the fact that the volume of forex trading can be thousands of times greater than stock trading.
The circulation of funds in the currency market reaches up to 5 trillion US Dollars per day,
far greater than the volume of the stock market which is only valued around 22.5 billion US Dollars per day.
From these calculations, we can conclude that the possibility of profit on the forex market is much higher than stock trading,
in addition, the forex market is open for 24 hours you are free to trade at any time.
Ease of analysis
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For ease of analysis forex trading fundamentally requires expertise in macroeconomic analysis.
The topic is related to the economic system in general, both within a country and globally.
The ease of foreign exchange analysis is the transparency of information and choice of trading pairs that are clearly classified according to their liquidity
(major, minor or cross, and exotic pair).
Thus, forex traders need not be confused about choosing the best trading pairs from thousands of existing currency pairs.
In stock trading there are those who consider doing a fundamental analysis of the company is a difficulty.
Because to find out prospective stocks,
a trader is sometimes required to be able to analyze and follow so many company developments from various sectors.
Security and risk analysis
In terms of security, in this case, stocks can be said to be safer than forex,
because they have been around longer and are seriously regulated by the government.
In addition, the credibility of stockbrokers is more secure because previously authorized
and licensed brokers must go through a series of rigorous selection and certification stages
Meanwhile, many groups of forex brokers inhabited by institutions have no regulations at all
So when you decide to choose forex, then finding the best broker is number one so you don’t get caught in a fraud broker.
The loosening of the forex broker regulatory system actually only impacts on the necessity of the trader to be more careful in selecting the best forex broker.
To find and find this forex broker you must make a selection by distinguishing which broker is the best or doubtful, if you find this then the problem will be solved.
You can find a broker of choice by reading reviews from trusted sites and also, looking for information through forex forums like forexpeacearmy
From the above explanation, forex gives more points than trading stocks, with a variety of reasons that make forex vs stocks better than stock forex.
Indeed, forex has the potential to provide quick profits, especially with high leverage by brokers, providing the potential for faster profits.
But on the other hand, without the provision of good trailing skills, it will be in vain you choose forex, because in addition to its advantages forex also has shortcomings, namely high risk.
In the end as an actor, you are free to choose which will be the main business, whether it’s forex or stock trading..