Forex Trading Guide                       Bookmark This Page

Welcome to Forex Trading Guide

Article

Is FOREX Trading Better Than Stocks?
Ron King

For hundreds of years stocks have been a popular investment. Companies issue stocks to raise capital for expansion and new projects. Each share of the stock represents a partial ownership in the company. When the company makes a profit, the value of the stocks rise. Stock owners can sell their shares for a profit, or hold on to the stock for even more gain in the future. Sometimes companies will issue dividends -- part of the profits that are distributed to share holders.

Stock Exchanges

Stocks are traded on stock exchanges. Most stocks are bought and sold through brokers who charge a commission or fee for this service. United States stock exchanges include the New York Stock Exchange (NYSE), the American Stock Exchange, and the National Association of Securities Dealers Automated Quotation System (NASDAQ). Most stocks are listed only on 1 exchange.

Long-Term Trading Vs. Day Trading

Stocks were traditionally seen as long-term investments. So-called "blue chip" stocks, those having proven value over many years, often formed the basis of an investment portfolio.

Short-term trading is a relatively new phenomenon in stock trading, made possible by the advent of the internet. Day traders attempt to take advantage of large daily fluctuations in the market by buying and selling many times in a single trading day. This is relatively risky, and any profits are reduced by the broker commissions charged on each transaction.

FOREX

The Foreign Exchange Market (FOREX) is quite different from the stock exchange. FOREX is primarily a short-term market. Most traders enter and exit deals within a 24 hour period -- sometimes within a few minutes. Many FOREX trades can be made in 1 day without building up a large brokerage fee, because FOREX trades are commission-free. Brokers earn money by setting a spread -- the difference between asking and selling prices.

The FOREX is the largest financial market in the world, with transactions worth $1.5 trillion every day. By comparison, all the American stock exchanges combined handle about $100 billion. The huge volume of FOREX allows it to be 1 of the most liquid markets in the world. There is always a buyer and seller for any type of currency, because the world economy relies on the movement of goods from country to country. The stock market is less liquid because participants may choose to hold their investments indefinitely or move on to other markets.

Non-Stop Trading 5 Days A Week

The FOREX is not based in any 1 location. Trading markets are located worldwide and, due to time zone differences, trades can be made 24 hours a day, 5 days a week. Trading begins in Sydney, Australia on Monday morning (Sunday afternoon New York time) and continues non-stop until Friday afternoon New York time. Stock exchanges have more limited trading hours. While it is possible to trade on exchanges worldwide, each exchange is independent and operates for just 7 hours a day. It is not possible to buy or sell a certain stock that is traded only on 1 stock exchange when that exchange is closed.

Other FOREX Advantages

It is more predictable than stocks; it follows well-established trends.

It allows high leverage -- typically 100:1 as opposed to 2:1 on the stock market

It doesn't require a large investment -- mini accounts as small as $250 can get you started in FOREX.

FOREX trading is not without risk. Neither is the stock market. Either trading vehicle requires education, planning, discipline, and some disposable income.

About the Author

Ron King is a full-time researcher, writer, and web developer. Visit http://www.forex4u-now.com to learn more about this fascinating trading vehicle.

Forex trading News

Forex trading

Jan 09 - GBPJPY Decline Likely Extends Jan 08 - Trading Signals Buy Australian Against U.S. Dollar Jan 08 - Forex Trading Strategies Aggressively buy Japanese Yen Against US Dollar, British Pound, Swiss Franc, and Australian Dollar Jan 08 - EURUSD ...

GBPJPY Decline Likely Extends - DailyFx

Jan 08 - Trading Signals Buy Australian Against U.S. Dollar Jan 08 - Forex Trading Strategies Aggressively buy Japanese Yen Against US Dollar, British Pound, Swiss Franc, and Australian Dollar Jan 08 - EURUSD Resistance at Former Support Jan 07 ...

Trading Signals Buy Australian Against U.S. Dollar - DailyFx

ZURICH, Switzerland, Jan. 8 /PRNewswire/ -- In close collaboration with PFSoft, Forexone has released the ProTrader private branded trading platform entitled FXInfinity TRADEMONSTER. "PFSoft turned out to be the ideal partner for our development of ...

Swiss FX Broker Forexone Releases New Forex Trading Platform from ... - Newsblaze.com

Rate drops to new lows overnight as cross-liquidation continues. Aggressive liquidation by EURO-Sterling cross spreaders providing the main selling but traders note lots of stops active under the 1.3400 area. Late longs are under pressure and can't ...

EURO USD Forex Trading Tips and Analysis for Day Traders - Top News India

Veteran Turtle Trader, Russell Sands, Will Auto-Trade For You. $6K Minimum. 100% Guaranteed. Automate Your FOREX Trading and Explode Your Profits TODAY! Double Your Money Each and Every Month. FAP Robot Eliminates the Guess Work in FOREX Trading ...

Forex News Trading - Colleyville Courier

RIO DE JANEIRO (Dow Jones)--Brazil's real closed stronger against the U.S. dollar Friday, in a relatively calm market with low traded volume. The real closed stronger at BRL2.271 to the dollar on the Brazilian Mercantile and Futures Exchange, or BM&F ...

Brazil's Real Closes Stronger In Slim Trading Session - FXStreet.com

Unique experiences and past performances do not guarantee future results! Testimonials herein are unsolicited and are non-representative of all clients; certain accounts may have worse performance than that indicated. Trading stocks, options and spot ...

Matsys D Trade Signals - FXStreet.com

TOKYO, Jan 5 (Reuters) - The dollar held firm near a three-week high against the yen on Monday as risk appetite grew after Tokyo shares followed Wall Street higher on hopes for a recovery in the U.S. economy later in the year. The Nikkei share ...

FOREX-Dollar holds firm near 3-week high vs yen - Forbes

TOKYO, Jan 9 (Reuters) - The dollar inched up against the euro and held steady against the yen on Friday, trimming its losses from the previous day, though it was capped by caution ahead of U.S. employment data that is expected to be bleak. Concerns ...

FOREX-Dlr edges up vs euro but capped before jobs data - Forbes

At the FOREX trading room on Miami Beach Thursday, investors turned from their trading screens to a huge plasma television screen on the wall, where a larger than life President-elect Barack Obama was offering a grim assessment of the economy. "It is ...