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How stock market differs from Forex

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Old 15-01-2017, 12:30
Join Date: Mar 2014
Posts: 979
Default How stock market differs from Forex

However, we have to get an insight into the forex market to evaluate all its benefits. Letís start with instant execution of market orders. In case no emergencies occur on the market, your trade orders are fulfilled immediately. It means that a price quoted at the moment remains exactly the same after opening a position. You are given access to online trading at current prices. However, we should bear in mind that retail brokers can give you such an opportunity if the market is in the regular state. When unexpected news emerges on Forex or one of central banks carries out forex intervention, the foreign currency market is highly unstable, it changes frequently. Therefore, it might cause delays in execution of your orders. On the whole, it occurs rarely on the forex market.

One more obvious advantage of Forex is the possibility to trade round the clock as the market operation does not stop 24 hours a day 5 days a week (from Monday to Friday). Moreover, a lot of brokers provide their clients with special trading conditions: 24 hours 7 days a week. Thus, you are free to trade at any time for your convenience. Besides, you can work out your individual trading schedule.

Favorable Forex conditions include minimal costs and no commissions. The majority of brokerage firms do not charge their clients any extra fees for trades execution both online or by phone. It proves that you have to cover minimal expenses to get a quality trading service. Retail brokers earn mainly due to spreads.

On the plus side, the foreign currency market does not impose any restrictions for opening short and long positions. So, all traders have even odds whatever position they open for trading. Forex market is completely failure-free as selling a currency is followed by purchasing another currency immediately. Thus, it is up to you to decide whether you are going to make money on a rising or falling exchange rate.

One more distinctive feature of Forex is the lack of go betweens. Centralized trading floors can provide market participants with lots of extra possibilities. The problem is the fact that they engage a great number of mediators which make money on charging commissions for their services. Thus, every deal on an exchange floor involves some expenses. As for the forex market, it is totally decentralized. Thanks to it, retail brokers are keen to create the most attractive conditions for traders, to curb costs in particular. The competition among brokerage companies is rather fierce. So, you can be sure they suggest truly beneficial trading conditions.

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