Where the Forex Market Deviates from the Stock Market


The world of finance is brimming with stock exchange platforms. In estimation, the number of stock market exceeds 6000. The foreign currency exchange industry features almost all the influential and crucial currencies of the world economy. Reaching a reasonable decision becomes much more challenging for traders when it comes to choosing one suitable platform or pair over another.

Difference between the Forex and the Stock Markets

The world’s most celebrated and followed financial platform, Forex deviates from the stock exchange in diverse ways. The charm and glorious state of Forex over all other economic platform hasn’t come from one special feature. Here, we will discuss a few of them.

1.      Intervention by the Analysts and Brokerage

A regular trader is very familiar with occurrences where brokerage firms are being accused of pushing traders to buy stocks, even when the price is strongly plummeting. Such criminal activity by different brokerage companies is highly typical in the Forex industry. No matter how governments of various countries are trying to stop such actions, the state of affairs remains the same.

All the analyst companies are highly related to these brokerage companies. So, they work together and ensure that activities like nudging customers to fallen trade will not be going to stop in the stock industry anytime soon.

However, the Forex exchange, being the prime platform for currency trading, spawns billions of profits for all the influential banks of the world. Analysts and brokers have the least possible domination over the market trend. They just analyze the movements and help traders to earn their bread.

2.      Short Selling Facility

The stock exchange shows a level of restriction on short selling. Opportunities become fewer when a trader chooses to trade with short positions in the stock markets.

By comparison, the Forex exchange is generous in providing speculators equal opportunities regardless of the size of their decided positions. As FX trading is all about exchanging one currency for another, the platform on which they get exchanged experiences only a little exposure to various biases. Thus, it allows equal access to all traders whether the price is rising or plummeting.

3.      The volume of Trades and Liquidity

The currency exchange industry observes a mean daily profit of around 6.6 trillion US dollars. The vastness of such a volume of trade is nearly unimaginable.

A giant business body like that of the currency market is not comparable for the stock exchange. However, many smart UK traders are making decent profit by using Saxo. They are trading the major stocks with logical actions and are earning decent amounts with low risk.

4.      Commission Fee

The currency exchange also shines in this sector. Brokers claim a nominal or, for most of the cases, no commission fee for conducting trades. Converging with clear spread system and tights, trading costs in Forex are less than that of any other platforms of the world.

Brokers earn money from bid/ask spreads.

5.      Seamless Market

Unlike the stock market, the currency exchange industry remains active in at least one area of the world. The relentless trading hours is one of the prime features of this market that makes it more charming to the traders.

Being open almost all the time in a day, Forex makes itself a viable source of earning for different type of traders. Even people who want to trade on a part-time basis may consider the market as a promising earning source.

6.      Least Manipulation

The stock exchange industry is much susceptible to massive funds purchasing and vending. This is because these can easily be bought by different funds. Conversely, with the currency business, the likelihood of being controlled by different funds or banks is pretty small.

Incredible liquidity and the vastness of the FX industry make it impregnable by any single entity. All institutions, like banks, governments, and currency conversion-houses, are just a few of the typical spot-FX participants.