The Forex (Foreign Currency Exchange) market is, by far, the largest and liquid financial market on Earth discover more. In contrast to the stock exchanges, forex is a non-regulated market. The clearing house and central exchange are not available to match orders.
Hedge Funds dominated the forex market in the past. Investors and retail investors were barred from trading it. Retail traders can only trade forex since recently. Retail investors are able to trade stock for a longer period. Modern computer trading technology has made it easy for retail traders around the globe to trade foreign exchange and stocks. The convenience and low cost of trading in forex or stocks has increased the odds for retail traders. Which option is best? The following are comparisons of retail stock trading and forex trading.
Trading hours: They are detrimental to retail stock market investors
Forex is open all day long, unlike US stock markets that are only open 930am-4pm. Forex traders trade at any hour, while stock traders must only trade between 930am-4pm. Retail traders’ restrictions to only trading between 4:30pm and 6:30pm (pre-market) or after-market (4:30pm-6.30pm) are a major drawback. It is also at these times that many companies announce earnings, which can affect the price of stock. Retail traders, including myself and many others (including you), were not able to watch price changes in those hours. During this time, stop orders cannot be processed. Forex traders are not affected. Also, forex traders can complement their stock-trading with forex trades that are conducted outside stock-trading hours.
In general, major stock exchanges tend to be more regulated than the foreign exchange market. The traders must be able to distinguish between the stock exchanges. The market is flooded with reputable forex brokers. When you do the research, it’s easy to find a trustworthy and suitable broker. Forex trading looks like a very good option for trading in the current uncertain global economic climate. Stock trading may be viable during bullish market situations. Stock traders can use forex trading to enhance their business. A stock trader may use forex trading in order to benefit from market opportunities at times when the stock exchanges are closed. Stock traders would benefit from trading forex by gaining a more comprehensive view of world economies.