How Is Forex Trading Different From Stock Trading

When it comes to investment, there is no shortage of opportunities. From Forex to stocks, to CFDs and futures - the financial market extends far and wide to provide traders with ample variety. Amongst the many investment domains, Forex trading and stock exchange stands tall. 

These two are incredibly lucrative and see a massive amount of traders entering routinely. The fame these fields carry has led several people to confusion! Many are often unable to decide between these two. Read on below to find out what separates stock exchange from currency trading. 

Forex Trading

Stock Trading: 

Put simply, stock trading is the buying and selling of a company's shares. Each share represents ownership of the company in percentages. When a company is growing, it usually lists itself on the stock market. When a said company sees profits, its market shares go up in value and you will be able to sell the stocks you purchased for a higher amount. 

Forex Trading: 

Unlike the long-term stock exchange, Forex is more of a short-term market but does occasionally see long-term trades. Forex Trading is the buying and selling of currencies. As a currency trader, you buy currencies from a foreign country, wait for an increase in value and sell it for profits. Since there is a massive level of volatility in the currency markets, trades are a lot more risky on these grounds. 

How Do These Two Differ?

1) For starters, Forex trading offers leverage to traders. Leverage is money borrowed from your broker so that you can have access to high-value trades without owning huge amounts of money right off the bat. 

2) Stock trading can't be done round the clock. Forex is a decentralized market that works 24x7 for 5 days a week, this gives traders a lot more time to capitalize on market trends!

3) Share trading is a lot more stable and secure when compared to Forex trading. While there are indeed risks involved in a stock exchange, they are of lesser magnitude.

Ultimately, choosing a trading domain comes down to your preference. For the long-term trade, stocks can be a great start. They are slow-paced but steady and when done right, can bring in hefty returns. Forex trading, on the other hand, is a lot more risky but just as profitable. If you can adeptly balance out the market risks, you will stand to make stellar profits!

Be it stock trading or Forex trading - get started today with the best! Join hands with WesternFX, one of the top Forex Brokers in the markets. With the assistance our experts provide, you will bag big wins and climb up the ladder in no time. Call us today to know more.