The foreign exchange market offers several advantages to its traders, brokers and dealers. According to a myth, it is said that trading and investing are not the same. They have a difference. But, it is also true that if someone who invests, is a trader, only the time period will be different.
It is true that the forex market has similarity with the other financial markets such as the stock markets. But, there are some significant differences. Just a few differences are discussed in this article.
1. Liquidity:
The foreign exchange market or the forex market is the largest liquid financial market, as more than three trillion dollars are traded here on a regular basis. On the other hand, the regular turnover of the commodities market is around 440 billion dollars, and the US stock market is around 200 billion dollars.
2. Trading times:
There is a saying that the forex market never sleeps, since it is open 24 hours a day except for the weekends. This allows the traders to trade according to their convenient time. But, when you are trading in commodities or stock markets, you have to wait till the market opens, as it is open from 8.30 am to 6.30 pm on weekdays.
3. Limitations:
The foreign exchange market is an over the counter market, and it has no limitations, as this is a global financial market. Anyone can trade in the forex from anywhere in the world. The traders are allowed to trade with different countries’ currencies. In case of stock markets, you are only able to trade with the currency of the same country. Because of this reason that the forex market deals with multiple currencies and countries, this market is the biggest financial market in the world.
4. Type of currency:
The foreign exchange market is engaged in trading with purchases that can simply be converted into cash. The currency that are used and the investors of different countries are of secondary importance.
5. Trading speed:
In case of the forex market, the traders are enabled to use programmes in order to execute a forex trade on a forex trading signal. This is the reason that the forex market is almost instantaneous. On the other hand, the trades in the stock market take longer time to be executed. The types of trading platforms used in trade also affect the speed to a considerable degree.
6. Mediators:
In case of the stock markets, mediators are required in order to execute trades. A big amount of money has to be paid to the middlemen or brokers just because they facilitate the trade. Whenever you buy or sell stock, you have to take help from a mediator. But, the picture is something different in case of the forex market. In this market, the traders are allowed to purchase or sell currency directly by spot trading because of the reason that the forex market is decentralised. Of course, there are also forex brokers, but they don’t claim any commission, and they are paid with the spread.
It is true that the forex market has similarity with the other financial markets such as the stock markets. But, there are some significant differences. Just a few differences are discussed in this article.
1. Liquidity:
The foreign exchange market or the forex market is the largest liquid financial market, as more than three trillion dollars are traded here on a regular basis. On the other hand, the regular turnover of the commodities market is around 440 billion dollars, and the US stock market is around 200 billion dollars.
2. Trading times:
There is a saying that the forex market never sleeps, since it is open 24 hours a day except for the weekends. This allows the traders to trade according to their convenient time. But, when you are trading in commodities or stock markets, you have to wait till the market opens, as it is open from 8.30 am to 6.30 pm on weekdays.
3. Limitations:
The foreign exchange market is an over the counter market, and it has no limitations, as this is a global financial market. Anyone can trade in the forex from anywhere in the world. The traders are allowed to trade with different countries’ currencies. In case of stock markets, you are only able to trade with the currency of the same country. Because of this reason that the forex market deals with multiple currencies and countries, this market is the biggest financial market in the world.
4. Type of currency:
The foreign exchange market is engaged in trading with purchases that can simply be converted into cash. The currency that are used and the investors of different countries are of secondary importance.
5. Trading speed:
In case of the forex market, the traders are enabled to use programmes in order to execute a forex trade on a forex trading signal. This is the reason that the forex market is almost instantaneous. On the other hand, the trades in the stock market take longer time to be executed. The types of trading platforms used in trade also affect the speed to a considerable degree.
6. Mediators:
In case of the stock markets, mediators are required in order to execute trades. A big amount of money has to be paid to the middlemen or brokers just because they facilitate the trade. Whenever you buy or sell stock, you have to take help from a mediator. But, the picture is something different in case of the forex market. In this market, the traders are allowed to purchase or sell currency directly by spot trading because of the reason that the forex market is decentralised. Of course, there are also forex brokers, but they don’t claim any commission, and they are paid with the spread.
The Foreign exchange Market: A different Experience of Trading
Aucun commentaire:
Enregistrer un commentaire