Foreign trading exchange is big in the terms of accessibility, liquidity, and nature. It’s possible to buy and sell currency over a counter. There’s not any physical exchange needed in this Forex market, unlike other markets out there. Besides, there’re many trading benefits. Let us take a close look at all of them. Your decision on whether you must trade currencies and stocks must be based over which asset you’re interested to trade, and there are a few factors that you have to consider.
Why to trade forex than stocks?
Making a choice about whether you must trade stocks or forex on leverage must be based over which asset that you’re interested to trade–shares or currencies. But, there are some reasons why many traders prefer forex trading than the stocks:
- Better liquidity: Forex market sees average turnover of over $5 trillion, while stock market sees lesser traders daily.
- Market opening hours: Stock market will be limited to exchange’s opening hours, while forex market is generally open 24hours in a day. But, it’s worth to note some stock indices are accessible for the weekend trading too.
- Higher volatility: Stock market generally tends to have higher stable rates that will change over the longer time frame. Even though it is the best thing for a few trading styles, volatility of forex market will create amazing opportunities for the shorter-term forex traders
Why should you trade on forex?
When you are making the final choice on whether you must trade on forex or stocks, there’s not any definitive answer to this question as there’re advantages and disadvantages to both the market. Ultimately, the final decision may come down to the personal preferences as well as attitude toward the risk.
While making the final decision, you have to take in consideration the trading style as well as financial goals. Suppose you’re interested in the fast-paced environment, then forex offers lots of opportunities for the short-term traders –like scalp traders, day traders, and swing traders. Suppose you are looking to take benefit of short and mid-term trends, and less volatility, then stock market can be the right choice for you.
Being an investor, it’s very important you remember that your place in forex market that is like being the small fish in vast ocean. So, your research and skillset to read the technical charts will deceive you as this market will move in an unexpected way.