Trading Forex

Why Trading Forex is Better than Stocks

Comparisons and other kinds of analysis have always struck the Forex market as well as the stock market. Both these trading grounds have been successful in their own way by helping out investors achieve the next best thing. But when it comes to a head-on collision, who would come out victorious? Well, through specific points of analysis, we have been able to determine Forex as the winner. Want to know why and how? Go ahead and read important reasons which highlight why trading Forex is better than Stocks.

 

1. 24 Hour Market

One of the significant benefits of the Forex market is that trading tends to be carried on the basis of over the counter exchange. Since that is not transacted over a traditional exchange, it is facilitated to virtually exist for 24 hours a day and five days a week. This particular benefit is specific to Forex alone and does not come into the picture when you look for the same in the Stock market.

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2. Volume

The size of the Forex market and the Stock market are worlds apart, with Forex being the largest one. With an estimated trade of around $5 trillion a day, the market concentrates on significant currencies like EUR/USD, GBP/USD, AUD/USD and USD/JPY. Having a large trading volume of this sort brings about a long list of advantages for traders as they can get their orders executed easily and also closer to the prices that they want. While numerous markets are prone to gaps, Forex has more liquidity at each pricing point, enabling traders to enter and exit the market.

 

3. Liquidity

Markets that trade in high volumes, generally have high liquidity that later leads to tighter spreads and lower transaction costs. The major pairs of the Forex market typically have low spreads and costs when compared to numerous stocks on the stock market. With liquidity intact, the aspects of trading will make matters comfortable and help investors to grab the better deal out of the many options and opportunities.

 

4. Little to Zero Commission

A huge number of Forex brokers do not charge commission and instead, make their margin on the spread. Yes, that’s right. As the difference between the buying price and the selling price, spreads help brokers make a formative deal that leaves out the requirement of commission. As these spreads are also quite transparent, things always seem to head in the right direction. But the same cannot be said for the Stock market since the aspects of the commission are all rooted in the picture. Hence, look into these points and take a proper decision that benefits you rather than leaving you with stress.

 

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