Trading Forex or Stock Market - Which Do You Choose?

You have had a desire to begin trading in the markets. You probably have heard allot about the stock market and its benefits, but what about trading forex. What are the advantages or disadvantages to trading forex over the stock market.

Lets begin by going over the major differences between the trading the forex market and trading the stock market. Well we have all heard about the scandals in the past regarding insider trading and stock manipulation in the stock market, but why have we not heard about any insider trading going on in the currency markets. You see the stock market has wall street as a centralized location. Where is the forex market located? Well it has no one specific location. Currencies are bought and sold between large financial institutions, businesses and different countries everyday. Prices in the currency market will fluctuate for a variety of reasons including news releases, trade reports,each countries economic conditions, etc. The forex market cannot be manipulated by any one person, so you can rest assured that your investment will not be affected by any fraudulent scam.

It takes an enormous amount of money to move the forex market in any one direction. Over two trillion dollars a day is traded in the forex market. Yes you heard me right, two trillion dollars. The stock market does not trade two trillion dollars in one month. I hope you can see now why it would be incredibly difficult for any one person or entity to move the market for any extended period of time. Another major difference between the trading forex and trading the stock market is leverage. When you open a forex trading account through a brokerage firm, you will generally be given 100:1 leverage. You can actually control $10,000 with a $100 account. While that sounds good. It can also hurt you if you do not know what you are doing. There are literally thousands of stocks to choose from. While there are only a handful of currencies that you would have to track makes it much easier to make a decision on what you will be trading.

One of the last things I want to go over is market hours.Since the forex market is a global market,time zones can vary greatly from country to country. Because of this fact, the forex markets are open for trading 24 hours a day. Since you are not limited to the normal business hours of the stock exchange, you have much more flexibility on the hours you choose to trade. This is not an exhaustive list of differences, but I hope you now have a better understanding of some of the major differences between Trading Forex and the Stock Market.

Eric Medina provides many more Free Forex Tips at www.forexprolive.com Get more info on Forex Trading signals and an exclusive live trading group focused on the Forex Markets

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Trading Currencies for Dummies by Thomas Rockwood

Currency trading is the business of buying and selling of currencies from different countries. You may think that this kind of trading is very complex and has many things involved. But you have to understand the fact that currency trading is a very simple trading system that everyone can do.

First, you have to understand that currency trading (also called Forex) is the most liquid market in the world. It generates exchanges of more than a trillion dollars in a single day.

You also have to understand that Forex is not centralized and operates worldwide. It deals with the different currencies in the world. Unlike stock markets, it is usually contained on a single trading platform.

In Forex trading, you will see that it operates twenty four hours a day, and seven days a week. It doesn’t stop and people will always keep on trading currencies. This is one of the reasons why Forex trading is so liquid and why it is the largest financial market in the world.

The value of a currency will depend on the stability of a government. As you may notice, a country that does not have a stable government will have a currency with low value. Hence, you may want to trade currencies of a particular country with a stable government.

In order to make or generate income you have to buy a particular currency when it is on the low and sell when it is on the high. In a much more simple terms, this means buying cheap and selling it when it becomes expensive.

The most common method in trading currency is to speculate. You will have to know the trend of a particular currency in order to know where it is going and when to execute your buy or sell order.

Currency trading can give you the possibility of making it big and becoming rich. This is because you as an investor in the Forex market can use the leverage of 100:1. This leverage means that with every dollar you invest in the market, you can borrow one hundred dollars for you to trade in the market. This will mean that you will have more buying power in the Forex market.

Another great thing about Forex is that it’s fast and very volatile. In a little amount of time, with only a little investment, you can expect a high return of investment in a very short time.

Another great advantage of Forex is that it isn’t based on commission. This means that you as the investor will keep all the profits earned in your investment. It is known that small investors in Forex market have made a substantial amount of income and are now living a very comfortable life.

The only disadvantage in Forex is that because of the huge leverage you will hold it will be very risky if you lose in a trade. To minimize this risk effective money management should be taken into consideration.

Always remember that when you invest in a particular currency you will be investing in the government of a particular country. If the government folds it will be like owning a stock of a company that became bankrupt. This is why it is important to know about how stable the government of the particular currency you are holding is in order to make sure that the particular currency will remain competent in the Forex market.
About the Author
Thomas Rockwood
For more information on trading currencies and currency traders visit the Currency Trading Guides.