Difference Between Forex vs Stocks

If we refer to NASDAQ, we can see a list of approximately 3100 stocks and as for NYSE (New York Stock Exchange, there are 2800 listed stocks.

What would be your preference? Do you have time to stay ahead of all the stock firms?

As far as spot currency trading is concerned, there are four major pairs which are usually traded by the participants.

It is much better to concentrate on four pairs rather than getting confused about massive number of stocks.

Difference between Forex vs Stocks

Stocks has no chance against Forex!

There are numerous benefits that forex offers to its users, for instance:

24-Hour Market

The users are provided with yet another feature which is the 24/7 open market. No matter which country you belong to, you’ll never have to watch the clock waiting for the forex market to open.

This way the participants with jobs can decide their own time to trade. Users can develop their personal schedule for training.

No Commissions

Forex offers “Bid/Ask Spread” to its retail brokers in order to reimburse them for their services. Additionally, there are no brokerage, government, exchange or clearing fees.

Market Orders are Promptly Executed

The price shown while you execute the market is the price you get. In forex, the trades are immediately executed according to the normal market conditions.

Good News: Participants can get the real time streaming prices on their marker orders execution.

It should be noted that under normal market conditions, only entry, limit and stop orders are guaranteed by the brokers.

Generally, there are no delays in the execution of orders on Forex.

Short-Selling without an Uptick

Another benefit of the currency market is that it doesn’t impose any limitation on short selling as opposed to the equity market. There are numerous trading opportunities irrespective of whther the user wants to short or long the stocks.

There is no structural bias to the market because selling and buying is always a part of currency trading. Therefore, it is up to you if you want to trade in falling or rising market.

No Middlemen

Middlemen are almost always a part of trading and they charge money for their services. This is called centralized exchanges.

As opposed to centralized exchanges, there is decentralized exchanges in the spot currency trading which implies that different dealers will charge differently.

Due to highly competitive atmosphere in this market, you’re guaranteed to get yourself the best deal. Forex offers its participants prompt access as well as low costs.

Buy/Sell Programs Do Not Control the Market

The stock market is prone to large fund selling and buying. However, in spot trading, the probability of any one bank or fund controlling a specific currency is minimal.

The spot currency is highly liquid where individuals with large net worth, governments, funds or banks are just some of the participants in the market.

Analysts and Brokerage Firms are less likely to Influence the Market

We always hear suggestions from brokers and analysts about when to buy or sell stocks. This is how they work.

The brokerage houses and public companies rely on IPO’s. This sort of relationship benefits both the parties involved.

Global markets excessively rely on the revenue generated by the prime market, i.e. foreign exchange. Brokerage firms and analyst do not significantly influence the forex market.

No Market manipulationYESNO
No middlemenYESNO
Short-selling without an uptickYESNO
Instant execution of market ordersYESNO
Minimal or no commissionYESNO
24 hour tradingYESNO

Clearly, Forex is the winner here!

  • BrokerEUR/USD
    OANDA 1.3pips (variable) margin: 3.33%
    ETX Capital 0.6pips (variable) margin: 3.33%
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