Know More About Forex (Part II)

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Know More About Forex (Part II)

Let’s continue the discussion about Forex in the second part.

forex marketet

Difference Between Forex and Shares

Forex and Stock are indeed both in the realm of a futures trading business on the financial market. However, there are some striking differences between the two, namely:

Volume

The Stock Market has a smaller trading volume than the Forex market. The reason is because the shareholders of the company are only traded in the scope of the company’s standing. Unlike Forex which can be traded internationally, forex can be sold and bought by anyone freely. This causes the actors and market volume on Forex to be far greater than the Stock market.

The Stock Market only works at certain hours

The Stock Market is only floored on weekdays from Monday – Friday, from 09.00 am to 17.00 with a break from 12.00 – 14.00. Almost all of the stock exchanges in the world adhere to the same working days and hours according to local time.

The Forex market is open from Monday to Friday for 24 hours non-stop, with several different trading sessions. So the difference is that if on the Stock Market, trading activities at non-work hours cannot be done. Whereas on Forex market participants can still carry out activities during non-work hours.

Instant Forex Market Execution

On the Forex platform, order execution is done instantly and at the current price. While Stock Market orders must wait for the queue.

Short Selling Limits

In the Stock Market / Equity, there is a kind of limitation of profit taking when the price is falling (Short Selling). It’s different from Forex where market players can take advantage of both when prices skyrocket and prices fall dramatically.

Difference Between Forex Futures

Often we hear the term “Futures”, but what exactly are these Futures? Briefly and simply, Futures is a futures trading product provided by a Stock company.

For example: George buys (Long) a 1-month Futures, with the belief that the value of the traded instrument will increase in the next month.

There are 2 most striking differences between Futures and Forex, namely:

Quotes / Prices

When on the Forex market, of course the price that can be seen is Realtime, without any delay. It is different from Futures which has several delays in transaction execution, so Quotes / Prices obtained at the time of contract purchase and contract expiration period will exactly match Realtime prices.

Risk limitation

If on the Forex platform we usually have a Stop Loss and Margin Call feature that can limit how much loss we can receive. 

Previous : Know More About Forex (Part I)

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