Currency Trading Vs. Stock Market Trading

Historically, being "closed" markets, Forex currency trading market and stock exchange market are now open for individual investors. Though Forex is relatively young than stock market, it encourages more and more traders to switch from stocks to currencies. The reason for this decision is that currency exchange trading provides a comprehensive range of opportunities and benefits that stock market simply can't compete with. Let's take a closer look at some of them.

One of the main advantages of the Forex currency trading system is that it is a true 24-hour market, open for traders around-the-clock from Monday till Friday. On the contrary, the stock market is restricted to US business hours and you have to be tied to opening and closing bells of the US stock exchanges. While trading futures limits your options, currency exchange trading provides you with much more opportunities and what is more important with the ability to customize your own trading schedule.

The NASDAQ (National Association of Securities Dealers Automated Quotations system) and NYSE (New York Stock Exchange) together combine over 8,000 stocks. It might take you lifetime to research all the companies, scour dozens of articles to identify hot stocks, but still with so many trading options it would be rather difficult to decide on what you should trade. However, the Forex market offers you much easier choices: there are only some dozens of currencies traded, where the most popular currency pairs are only four – EUR/USD, GBP/USD, USD/JPY and USD/CHF. This allows you to focus your time, power and efforts exclusively on just a few trading options.

Another important advantage of the Forex currency trading system is its high liquidity. Undoubtedly, it's more beneficial to participate in a highly active market with plenty of sellers and buyers operating in it. The daily money circulation volume in the Forex market is several times larger than that of stock exchanges (compare $3 trillion involved in currency exchange trading with less than $100 billion of the New York Stock Exchange). The high liquidity allows you to trade on the margin at cheaper rates and get much more profits than with various stocks.

Unlike the stock market, Forex doesn't have a centralized exchange location, which involves middlemen. These extra parties between buyers and sellers charge fees and commissions and somehow slow down the process. Forex traders interact directly that ensures a faster response and higher profitability.

And this is far from being the full list of Forex currency trading advantages over the stock markets.