Foreign Exchange vs Stock Exchange

Posted by on Apr 8, 2014 in Featured, Learning to Trade?

Foreign Exchange vs Stock Exchange

When you are looking to begin your journey as a trader the first important decision you will make is the market that you want to trade in – the foreign exchange market or the stock exchange market.

Having traded in both, ForEx is my personal preference due to its liquidity and how much quicker the market moves in comparison to the stock exchange market.

One of the main differences between the two is where they are traded. The stock exchange market has a fixed location such as the London Stock Exchange whereas the foreign exchange market is not geographically tied; in fact it is referred to as an over-the-counter (OTC) exchange and can even be accessed through mobile apps, allowing users to trade whilst on the move.

When trading stock, markets have set hours (usually around 8 hours a day) set by the exchange which can limit traders if it is not their full time occupation. People can trade ForEx more or less 24 hours a day Monday to Friday. This allows traders to be more flexible and trade along side their full-time job, especially with how accessible the market has become.

The ForEx market is generally cheaper to invest in as users can put down small deposits and there are lower transaction costs. The stock exchange market has more regulations and limits restricting users and can be more expensive to initially invest in.

Have a look at this blog from Street Directory about the Foreign Exchange Market Vs. Stock Exchange Market and see the comparisons that they make between the two.

I personally find the foreign exchange market more interesting and certainly more accessible but would love to hear your thoughts. What do you trade? How did you become interested in trading? Please leave a comment or get in touch via Twitter.