Stock Market and Forex
Forex and the stock market. Novice traders often compare these two markets. And everyone praises exactly the Exchange, where he sells. And the conditions are better, and the speed of execution of the transactions above. In this article we try to ignore and look the part - what is the real market is better for a trader? Is it worth it to trade on both markets simultaneously? And where better to start with a beginner?
We also consider the financial betting (options).
Forex Market - Advantages and Disadvantages
Forex market is attractive to traders for the following reasons:
1. The minimum threshold for entry.
You can start trading with $ 1-10. For this purpose there Cent accounts. A lot of money so did not earn, but if you have the "extra" $ 20-50-100, you can already trade in the real market, buying and selling currency.
2. Ease of opening an account with a broker.
To start trading, enough to register the selected broker to deposit money into your account, download the MT4 trading terminal and determine the trading instrument ( currency pair). See chart, put a couple of indicators - and more! That's exactly what happens in most cases, for a beginner.
3. Ease trade.
For trade, most traders use only the graph and the indicator (s). More advanced players connect indicator volumes, PriceAction, trading advisors, etc. But to make a deal is very simple - just 2 clicks and we market.
4. Easy access to trading strategies.
Online on-demand "forex strategy", for example, easily find dozens of trading strategies that can be immediately put into practice. Separately is advertising like " Open 2 positions and earn a million!", Which undoubtedly promotes Forex, but presses on human greed. In this case the trader sees trade as a game, not as a responsible job, a new profession. 95% of traders lose their fast enough money in the forex market. And it's all thanks to the automated expert advisor. Good helpers in the work.
5. Aggressiveness trade (high leverage).
Thanks to the leverage that can reach 1:500 or even 1:1000, a trader can enter into transactions of significant size. But this increases the risk of loss of the deposit. Conservative traders prefer less leverage - 1:100 or 1:200.
6. Currency never depreciate.
This postulate shows a radical difference between the Forex market and the stock market. An action may be cheaper and drop to zero, and the currency - no. But if you think about it, it all depends on the direction of our transaction: if a trader enters a long trade and the currency starts to fall, without stop-loss deposit will eventually be lost.
Features of the stock market
The market shares and other securities also has its own peculiarities. Stock market attracts traders for the following reasons:
1. Exchange has a long history, merchants can be confident in the safety of trade ( the guarantee brokers).
Broker, giving access to the so-called Fund, has many licenses issued reliable guarantors. Thus, the trader can be calm for your money and focus on trade.
2. Trade on the fund is easier than Forex.
The thing is that there is an opinion: trader, trading profitably on the currency pairs will be able to make a profit on the securities. The fact that many of the strategies practiced much better in the stock market than on currency pairs.
3. In the stock market a large selection of tools.
Tens of thousands of securities allow the trader to select a tool for trading on the soul. At the same time, most forex traders use to trade just a few pairs. This is directly linked to item 2 - the more players focus on a single instrument, the less predict its movement.
4. Little leverage.
1:1, 1:2, 1:10 and more seldom. That is why the fund is considered less risky than trading.
We should also highlight the financial betting or trade (bid) on options. Option - a contract for the purchase and sale of an asset that has a time limit. Today, many brokers offer option trading. The option can be concluded on the currency pair, index, the security, etc. Profits can be from 1 to 70-83% of the rate.
In general, you can make a profit on forex and stock market. You can start with any of the markets. Before deciding to trade real money always test its capabilities in the demo.
If you can afford a small investment, it is better to start with a currency exchange.
Both markets, as well as betting, deserve attention. Should not rely solely on their financial capabilities. Taste, feel and defines. Traders earn on each of the markets, but often choose just one.
Good luck, and remember that the profitability of Forex trading is highly dependent on the chosen broker!
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