FOREX vs. Stocks

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FOREX vs. Stocks

FOREX and stock markets have a lot of things in common. No matter whether you trade FOREX vs stocks, you use similar charts and trading tools. Some trading platforms even allow you to trade both at the same time.

Technically, there is no difference in trading FOREX vs stocks. You open and close positions the same way with only one exception. FOREX market is open 24/7, while stock exchanges in various countries open and close at regulate business hours. This is the reason why you should close all your stock positions before stock exchange closes if you trade intraday.

The biggest difference though is in what a particular stock or a currency pair represents. Stocks can represent single companies or baskets of companies, while in FOREX, currency pairs represent economies of entire countries. For instance, EURUSD currency pair represents the entire European economy vs the entire US economy.

It means that any economic events happening in any european country or in the US will affect the price. With stocks, bad news about Microsoft, will not affect Walmart. However bad news about Microsoft may affect Apple, because they compete on the same market.

To decide if you want to trade FOREX vs stocks, you need to understand what you want to achieve in trading. Good quality stocks are considered to be safe, but give you a little return, while FOREX is extremely risky and volatile, but gives you great opportunities to make a big buck.

If you need to play safe, go for quality stocks. If you want fun and money, go for FOREX!

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