Let us assume a sumo match between forex and stock. Forex is a huge size sumo man whereas stocks is tiny Mr Bean. Which one would you expect to win? Obviously there wont be any tough fight and sumo man will wins the match. The same thing occurs when you compare forex and stocks. Stocks go nowhere near forex. Forex win the fight easily.
Please dont mistake me that i don't like stocks and too much biased about forex, I do believe that stocks have its own place and even i invest in stocks every year, but when it comes to comparison and taking side i clear vote for forex.
I know you wont agree with my words till i show you the reasons behind my strong stand. Here i list you the reasons.
Forex Market is open 24 hours a day and 5 days a week whereas stocks is only 8 hours a day and 5 days a week. You can clearly see that forex traders have more room to think and act. They have no fear for overnight gaps. Gaps occur when market opens after a period of close. It always happens in stocks during morning open time. because of that traders in stock market liquidate their stock before the close of the day. Whereas forex traders have the freedom to have open trades without any fear.
Even though it is a big advantage for most of the traders, for some trader it is the main problem. They stare at the chart all night without sleep, hitting the wall whenever they see a spike in exchange rate. Even i have been in such situation. So believe me, you must have some discipline to become successful in forex.
Some say that less is more. It suits for trading instruments in forex and stocks. Despite cursed by few traders for less number of instrument to trade it is clearly accepted by majority of traders that having few currency pair is an advantage. When you look into stocks there are over 2200 stocks in NYSE alone and it could easily make a trader go crazy with his analysis.
Moreover top currency pairs EURUSD, USDJPY, GBPUSD, AUDUSD, USDCAD, USDCHF, EURJPY, EURGBP accounts for 74% of total forex volume. It also gives us ample trade setups in different timeframes. This makes a trader to have a clear mindset.
One last thing which we have to look is long and short trading. This is one big advantage for forex market. If you want to trade stocks you need 20 instruments whereas in forex 10 is sufficient because it gives us twice the trade setup of stocks. Even though you can do short trading in stocks it is considered as unethical because you want to see the company perform low.
In all the topic we taken into consideration, forex has clearly won the game and this is why i insisted in the beginning of the article that forex is the best. Hope you will agree with me now.
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Please dont mistake me that i don't like stocks and too much biased about forex, I do believe that stocks have its own place and even i invest in stocks every year, but when it comes to comparison and taking side i clear vote for forex.
I know you wont agree with my words till i show you the reasons behind my strong stand. Here i list you the reasons.
Trading time
Forex Market is open 24 hours a day and 5 days a week whereas stocks is only 8 hours a day and 5 days a week. You can clearly see that forex traders have more room to think and act. They have no fear for overnight gaps. Gaps occur when market opens after a period of close. It always happens in stocks during morning open time. because of that traders in stock market liquidate their stock before the close of the day. Whereas forex traders have the freedom to have open trades without any fear.
Even though it is a big advantage for most of the traders, for some trader it is the main problem. They stare at the chart all night without sleep, hitting the wall whenever they see a spike in exchange rate. Even i have been in such situation. So believe me, you must have some discipline to become successful in forex.
Number of Instruments to trade
Some say that less is more. It suits for trading instruments in forex and stocks. Despite cursed by few traders for less number of instrument to trade it is clearly accepted by majority of traders that having few currency pair is an advantage. When you look into stocks there are over 2200 stocks in NYSE alone and it could easily make a trader go crazy with his analysis.
Moreover top currency pairs EURUSD, USDJPY, GBPUSD, AUDUSD, USDCAD, USDCHF, EURJPY, EURGBP accounts for 74% of total forex volume. It also gives us ample trade setups in different timeframes. This makes a trader to have a clear mindset.
Liquidity
liquidity of Forex Market is several hundred times of stock market. It means you will mostly able to place trade without any problem and you will also have less spreads.Growth of both the market
If you see the growth chart of both stock market and forex market you could clearly see that forex market is ahead of stocks. Forex market is growing continuously from 1990 even though we had several recession. But stock market faces a big hit when there is difficult situation like recession. One report says that forex is growing continuously for 15 years whereas stock market went to position where it was in 2006. This clearly shows that forex is evergreen.Leverage
In trading, Leverage is both friend and enemy. As long as you remain disciplined and trade with proper money management and trade management you will see him as your friend. But if you get little greedy then your biggest enemy of forex. So you must take immense care trading using leverage. Even though there is huge risk the earning potential is also very high. For example of a stock price moves 200% (approx) currency pair like EURUSD need only 5% to 10% to achieve same result.One last thing which we have to look is long and short trading. This is one big advantage for forex market. If you want to trade stocks you need 20 instruments whereas in forex 10 is sufficient because it gives us twice the trade setup of stocks. Even though you can do short trading in stocks it is considered as unethical because you want to see the company perform low.
In all the topic we taken into consideration, forex has clearly won the game and this is why i insisted in the beginning of the article that forex is the best. Hope you will agree with me now.
Sharing is caring. share us and like us.