The currency trading market differs from the stock market in many areas. When stocks begin to plummet panic ensues. People get nervous about their stock holdings and want to close their positions quickly. When forex trading currency prices begin to plummet golden opportunities arise. The currency that is plummeting means the currency that is paired with it is rising quickly. Traders who have these positions will jump for joy as other potential investors begin flocking to these rising opportunities.
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SAFE INVESTMENT STRATEGIES
Investing in currency can be a much safer investment when you factor in stop orders. Potential investors have an opportunity to place trades and then add addtional information to the trade to let the system know when to sell the position just in case the trade goes south. This allows forex traders to not lose as much money when it comes to their trades.
STOCK MARKET AND FOREX TRADING HOURS OF OPERATION
Forex trading is open for trading 24 hours a day 5 days a week. The stock market is open 5 days a week from 9:30 a.m – 4 p.m. Having the ability to trade at anytime during the week provides more opportunites for potential investors to trade in.
THE VOLUME OF TRADING DAILY
Another huge difference is the amount of volume that is traded in each market on a daily basis. The Forex market trades about 6 trillion dollars everyday. The stock market trades only about 250 billion everyday. A huge difference in the amount of money being traded. What does this mean? This means their are more opportunites to earn in the forex market. The opportunity to earn a lot of money quickly is also available. It is quite possible for forex traders to make thousands of dollars quickly after a small investment of only a few hundred doillars.
THE RISK FACTOR
Does this mean their is a greater risk when trading in the forex market? Not neccessarily. Their is a misconception out their that forex trading is a greater risk than the stock market. What people who believe this misconception need to understand is with a good forex trading strategy or strategies the risk factor gets lowered. Many people trade full-time because they know how to trade properly and have winning strategies they use to make a profit.
CAN STOCK MARKET SUCCESS TRANSLATE INTO FOREX SUCCESS
Another misconception is traders who trade well in the stock market think they can translate that success into the forex trade market. This is wrong because the strategies are different. Many people who try and mimic their success from the stock market find this out the hard way.
Forex traders find success with their trading strategies across multiple currency pairs. With the stock market I believe it is more difficult to translate similar strategies across multpile stocks let alone into forex trades. You kind of have to research each individual stock or rely on the services of mutual funds who have a diverse portfolio of stocks to choose from.
LEARNING AND GROWING AS AN INVESTOR
This article is not intended to knock the stock market at all. Obviously the stock market is a great place to invest in and make money. As with any type of investment platform, the more you learn properly the more successful investors will become.
As you grow as an investor in either the the stock market or within the foreign exchange your comfort level begins to rise as well. The risk factor is not as worrysome anymore. Instead the opposite is true. Seasoned investors eagerly seek out opportunities and look to execute more and more trades while at the same time always seeking for new ways and opportunities to invest and make money.