There is some sort of competition between the Forex market and the stocks market which is why most traders often wonder which one is better. Even if those two markets are somehow linked, the differences between them are quite big and, unfortunately, not many people know them. For example, many consider the Forex market as being the more attractive one and in this article, we will detail some of the main differences between those two, Forex vs stocks.
Forex vs Stocks
The biggest difference between the Forex market and the stocks market has to do with their size. The Forex market is much bigger and estimated to trade about $5 trillion each day. Some of the major pairs that are the most traded include EUR/USD, USD/JPY, and GBP/USD. This is probably why most traders find it the more attractive one in terms of trading opportunities. When there is a high volume, this means that traders can execute orders easily and around the prices they wish for.
This brings us to the next main difference which has to do with liquidity. When a market, like the Forex one, has high volume, it also has a high level of liquidity. This means smaller transaction fees and low spreads. This is why trading the Forex market can be considered a lot more advantageous than trading the stocks market.
Next up are the trading hours which, for the Forex market, can happen at any time of the day because this market functions 24/5. When it comes to indices, however, there are certain times at which you can trade because of certain variables that determine this schedule.
Last but not least, it must be said that a large majority of Forex brokers charge no commission or very low commission. However, they are the ones who make the spread margin, which is the difference between the buy and sell price. When trading the stock market, people need to pay not only the spread but also a certain commission to the broker.
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