Reading many different sites, realized that there is a problem: what it is better to choose for earnings. In this article we will try to identify clear advantages of each market. By analyzing two different markets, you first need to define evaluation criteria that will help determine the merits of each.
Forex And Stock Market Differences
If you estimate the market by the history of existence, of course, the stock market has more advantages. It originated as early as 1611 during the formation of the Amsterdam Stock Exchange. In the modern sense, the concept of the stock market came in the 20th century with the emergence of joint stock companies that began to sell their shares. As for the Foreign exchange market, its history began after the announcement of the decision to abolish the free convertibility of the dollar into gold in 1976. Despite its young history, it is rapidly developing rapidly, exceeding the turnover of the stock market by several times. According to statistics, the turnover of the international market in 2016 is 5.1 trillion US dollars.
A significant difference in these types of market is the commodity on which traders earn, because all of them are united by profit from trade. On the stock market trade securities – shares, bonds and stock indices. To trade such types of goods requires accordingly a large amount of investment, while the brokerage leverage from brokers is no more than 1:20. It is because of this that many traders prefer to earn money on Forex, as there are many privileges from brokers, brokerage leverage 1:100 and more, respectively, the deposit is needed less.
On the other hand, if we analyze the progressiveness and movements of markets – the stock market is less volatile, that is, the risks of significant jumps are less, justified by the fact that the stock market has fewer participants than on the currency market, and the market works on sessions. As for Forex, traders have the option to trade 24 hours a day 5 days a week, which opens up more options for them to earn. And there are many more participants in the foreign exchange market, as without currency exchange it will not cost any country, company or bank.
Summing up the analysis in which market it is better to trade, we can conclude that each market has its advantages and disadvantages, for investors who want to keep their capital closer there will be a stock market, and for investors who want to increase their money better exactly the foreign exchange market.
So anyone thinking about starting this business will need to first clearly define what kind of investors he belongs to.