Difference Between Forex Market and Stock Exchange

Difference Between Forex Market and Stock Exchange

Difference Between Forex Market and Stock Exchange, if you have previously been buying and selling a stock business and then doing forex business can definitely feel a very significant difference between the two. And whether you will choose a forex business or stock depends on your choice and risk profile. If you like a business that has High Risk High Return, then please choose a forex business, but if you want a High Risk High Return business, please choose a business on the stock exchange 🙂

Difference Between Forex Market and Stock Exchange

How come everything is a High Risk High Return business, what’s the difference? actually the location of the difference is very far especially regarding the margin and the volatile value. In the forex market we will recognize margins which in short means we are allowed to borrow money from brokers and when opening a forex trading position we are only required to pay only a few percent of the value of the forex trading position and in the forex market we know the volatile terms which are the range of price movements every day the average value is higher than the stock price movement on the stock exchange.

Here are some differences between trading stocks with forex trading and whether you are compatible with one or both of these businesses, please compare the risk profile that you have in business to determine it.

Parameter Forex trading Stock trading
Capital Only with $ 1 we can do forex trading At a minimum, it requires capital of 1 million rupiah
Time The forex market (FX Market) is always open 24 hours a day The stock market is only open from 09:00 to 16:00
Liquidity Very liquid so that whenever you want to buy and sell a currency pair the market is always crowded Depends on the number of buyers / sellers so that sometimes we cannot sell stocks in large amounts
Profit / Loss Even though the market is in a downtrend or uptrend we can get both profit and loss We can only get profit if the stock price rises and suffers a loss if the stock price falls
Broker Commission There are several brokers that apply the commission system (fee) but most brokers benefit from the spread Every sale and purchase transaction we have to pay a commission to the broker.
Leverage Starting 1: 1 to 1: 1000 Usually 1: 3
With leverage on forex trading allows us to be able to get a profit of up to 50% once trading but also keep in mind that this is directly proportional to the losses that will be received and even your capital can run out in a day if you do not implement the strategy correctly especially regarding risk management . But even so there are also brokers who provide 1: 1 leverage, meaning you don’t need to use leverage when running a forex trading business but to make a lot of profit, the capital you have to use is also a lot. It’s different when trading stocks so to get a big profit then we also have to have a large capital as well because in the trading business leverage shares are very small and can even be said to have no leverage.

But even so the stock market offers something that the forex market cannot offer, namely the ownership of the company’s business. So when you buy shares on the stock exchange, of course, you are directly one of the owners of the company whose shares you bought with a portion of ownership proportional to the number of shares you bought. But usually the stock traders who used to buy and sell shares in a very short span of time did not care about this advantage because their target was to get a profit from the stock sale transaction.

But knowing what is the difference between the forex market and the stock market, at least we can determine what kind of business they want to make a profit from. Will it be forex trading that benefits from buying and selling currencies and or will it be a stock trader / stock investor who benefits from buying and selling shares. And all decisions are in your own hands.

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