The US stock market: differences from currency exchange
Today we will talk about the U.S. stock market, or rather, how it differs from the currency of the Forex market. Supporters of the market shares make their arguments, why choose securities for increasing money, and Forex traders - why currency trading is better than the new York stock exchange. It is important to take into account the arguments of both parties and the right choice.
US stock market - the basics
On the stock exchange (sometimes use the abbreviation “Fund”) traded securities. It all began more than 100 years ago, when brokers stood in the so-called “pit” and cheered each other, to buy a share at the right price. Actively used, telephone, tormented tons бумагы to write the quotes and the rest of the required information. Today everything is automated: specialist trades through the network of its trade is the most simplified software. Traders can buy and sell any share of 100 PCs from any point of the globe, using the Internet and the trading terminal. Just in a few clicks, you can quickly open and close the bargain.
Changed the psychology of traders, although not dramatically. Actually market and further ruled by greed and panic. Oh and market makers, where the same without them. Let me remind you that he is a player with a large capital, which sees in real trading volumes, and thanks to the deals with large volumes of “moves” price.
Trading on the U.S. stock market is strictly regulated and clearly to control by the controlling authorities (different fee etc). The point is that the trader on the Fund really is protected from fraud broker. To become a broker, enabling them to trade in the stock market, you need to pass lots of checks. Become a Forex broker is a little bit easier, but the Fund is a separate issue.
Securities trading is a long history of over 100 years. Forex same counts from the power of 20-25 years. Therefore, many conservative traders prefer the exchange of shares.
Forex and stock market of the USA - looking for other differences
The minimum Deposit on the market shares - from $10,000, you can find brokers with access to the market with a Deposit of 2000$. In Forex you can start even with a 10$. Therefore, exchange more popular among beginners, which, by the way, read in network advertising, broadcasting about the phenomenal making money from trading.
Leverage. Traditionally it is considered that high leverage, beloved by Forex, carries higher risks. Currency traders with experience argue that the shoulder (1:500 or 1:1000) helps to increase profit at the obligatory stop orders. Traders shares rarely have the opportunity to trade with large shoulder. Maximum - 1:10, more often 1:1, 1:2, 1:5.
It is also believed that the US stock market less than forecast. If the movement of currencies on the Forex defy interpretation (got important news, spoke policies and other), the crash share may factor which a trader learns a few hours/days after the motion.
On the other hand, the majority of traders funds are sure to profit in the stock market in the US is much easier than on the currency pairs. This is likely due to two factors:
1. existence of so-called “Dom”, i.e. trading volumes.
2. technical analysis works best on the Fund due to the smaller number of players on a single instrument. For example, in Forex, approximately 30-40% of traders use a pair EUR/USD or GBP/USD. On the securities market action may sell only a few tens of thousands of traders at the same time. It's like stabilizes the movement of the campaign, it will become smoother. Of course, the value of the shares is also subject to sharp fluctuations, but less frequently. But a huge plus in the pair trading, the opportunity to use the automated currency trading software. The stock market is not using automation.
Time of trading can be both an advantage and a disadvantage. Forex - hour market. Shares are traded in a strictly defined time - the American trading session lasts from 16.00 till 23.00 Moscow time. Someone suitable option to sit a couple of hours in the market, make a profit and leave to rest. And someone wants to day and night to monitor the market and look for entry points. A matter of taste.
As we see, the markets are quite different. We dismantled the only major differences.
We recommend to start with Forex (low entry threshold and the minimum fee, ease of registration), and in the course of trade to learn stock trading. Both options are interesting and can bring a steady income, but the final choice is yours. We wish profit!
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