What is the difference between Forex and the stock market and what is better to choose for trading?

Hello, my name is Alena and I decided for myself that I will make money trading in the stock market (since my friend makes money without problems in this way). Tell me, what is the difference between the stock market and Forex and what is better to choose for trading?

Currency exchange and no less famous stock market, on which stocks and securities are sold, have a strong relationship. However, they have a significant difference in the principle of operations performed at such sites.

Need to understandthat the Forex market carries out foreign exchange trading, while in the stock market shares and bonds participate in trading. In more detail about Forex trading, we have already written in one of our previous publications.

Many probably heard that the largest and most significant stock exchanges are located in New York, as well as in two capitals - London and Tokyo.

The main difference between these two trading floors is the difference in the amounts that are operated in trading. What is trading and how to get training is described in the article here.

Differences between Forex and the stock market

In order to make a stock purchase, traded through the stock exchange, a large amount of money is needed, starting from several tens and ending with hundreds of thousands of dollars.

It is also worth notingthat trading takes place in a calm and measured rhythm, which cannot be said about Forex, where every second can have an impact on the process. In Forex, at one point you can get rich and make a ton of money, but you can also easily lose everything.

There are traders who have earned a large part of the funds in the Forex currency market, and then decided to change the risks and switch to a calm stock market. If you compare with crazy speeds on Forex, then this is indeed so.

The stock market can be divided into: primaryand secondary.

In the first case, the market strongly affects the economy of any country. It is from its indicators that development effectiveness depends. It places securities that have not yet been issued before. The main buyers are various investment funds, a very high percentage of all kinds of insurance organizations and other investors. Securities are placed when addressing directly to investors, or intermediaries can also be used.

The secondary stock market includes the OTC market, as well as the untwisted stock exchanges. Its main purpose is to resell issued and securities. These securities are bought by investors who are able to pay for them. Its difference from the primary market is the lack of influence on the investment volume of the country.

The main players in this market are speculative traders. Their functions are very simple - they purchase securities at the lowest cost. And when their growth occurs, they sell them at a new price and get the difference in their pocket. About who such a trader is and how to become one, read the article here.

It should be noted an unconditional determining factor - this is the price, and issuers, intermediaries and naturally investors participate in its formation, on the money of which all shares and bonds are purchased.

The stock market price is set in accordance with several principles:

1. Whether the securities will be profitable, that is, their focus, reducing their benefits, and also whether the investor will buy these securities in the future.
2. The difference in cost.
3. Decrease and increase in profitability.

These principles are used in developing strategies that promote stock market pricing. Thanks to these principles, they set a high or low price on securities, set the task of quickly making a profit, or simply enter the market, and perhaps there are plans to seize part of the market in a certain area.

Work with securities can be conducted in different directions. Some buy shares in order to profit from their value in the future, others purchase them in order to have their share of the total income.

Although this market is calm and safe, it is imperative to conduct an analysis before work, the primary task of which will be to minimize the risk of investments.

We hope we could give answers to your questions. We wish you and all readers of Richpro.ru magazine good luck in all your endeavors and success in trading on the exchange!

In conclusion, we recommend watching a video about Forex trading and earnings (with step-by-step instructions):

And also a video about other ways of investing (investing):

Watch the video: FOREX vs STOCK Market! Which one is BETTER and WHY?! (November 2024).