Both forex trading and stock trading are “high risk and high return” investment, there are many advantages offered by forex trading compared to other types of trading, including stocks. Technological advances also have an effect.
Reported by investopedia, here are some of forex trading advantages. Check out the reviews carefully.
1. Less Capital
Money or capital has always been one of the main factors in determining something. Even when deciding to trade. The capital used to trade forex is less than stock trading.
Even now, there are many brokers who offer capital as little as $1. Profits can be 100 or even 1000 times. Meanwhile, for those who want to trade stocks, they require a large enough capital.
Apart from that in terms of commission for brokers, forex trading does not charge additional fees.
Usually, they take advantage of the spread (or the difference between the buy and sell rates). Meanwhile, for stock brokers, usually a commission will be deducted between 0.1 – 0.3% for each transaction, whether it’s buying or selling.
2. Forex Trading Market Open 24 Hours
For those who have a myriad of activities, the forex trading market is quite easy. Because it is open 24 hours a day in 5 working days. This 24-hour trading is also standard around the world, following world forex regulations.
So whenever you have time to trade, you can just contact CS. Meanwhile, for stock trading, time is arguably less flexible.
The stock market is usually open during office hours. Starting from 08:00 or 09:00 until evening. Of course this is quite a hassle for office workers who want to trade stocks. The times will collide.
3. Sufficiently High Liquidity
Another advantage of forex trading is having high enough liquidity. This means that at any time you can withdraw funds for transactions at any time.
Almost every day the turnover in the forex market can reach trillions of dollars per day, and that can be used for transactions.
As for stocks, the funds flowing to the stock exchange need to be distributed among hundreds or even millions of shares every day. So the liquidity is not as flexible as forex or forex.
4. Most of them have a trial account.
To attract even more traders, brokers are competing to give the impression of being trusted. So from that now many forex trading platforms provide demo accounts or trial accounts with fictitious capital.
So, this is of course very useful for novice traders. Can be simulated before making transactions with real capital.
This trial account can also train traders to be even more observant in taking opportunities in the future after actually jumping. And this has been proven, many traders have learned it from this trial account.
5. Low Level of Complexity
Another thing that makes many forex traders own is the low level of complexity. Just imagine, when investing in stocks, there are more than 500 companies offering their shares.
You need a lot of time to carry out investigations one by one so that you have minimal losses. Especially if you are a beginner, of course there will be many other things that need to be learned.
However, if you choose forex trading, it won’t be as complicated as stocks. There are only a few types of currency to choose. There are American dollars, euros, pounds, and also Japanese yen. Of course, because the selected eye type is not too big, you will have plenty of time to inspect other factors.
That is the advantage of forex trading compared to stocks. Still, there are actually advantages and disadvantages each of them. For those who have been in stock trading for a long time, of course it will be more tempting for stocks and vice versa. Thus, the choice is actually yours.