How to be a TRADER Part 4 – Forex Vs. Stocks

Forex Vs Stocks – FIGHT!

There are around 2800 stocks listed on the NYSE (New York Stock Exchange).

There’s also the NASDAQ index that lists another 3100. So to know the stock market you only need to stay on top of almost 6000 companies… EASY …. NOT!

In Forex, while dozens of currencies are traded, most of the market traders focus on 4 main “Major” pairs. Take your pick – 6000 companies or a handful of trading pairs… How much free time (Or lifetimes) do you have on your hands?

So now the blindingly obvious benefit of Forex over Stocks is out of the way let’s look at a few more.

24 Hour Action

Read a news article that wins you over on buying some company stock in the evening? Bad news my friend, you can’t buy it until the stock market opens in the morning.

Forex on the other hand is a 24hour, seamless market with 24/7 customer support in most cases. You can trade by your own watch!

Instant Order Execution

Usually, your trades are executed instantly. What you see is what you get – because the trades execute so fast there is a limit to price fluctuations as the trades are ordered. We are talking under usual conditions… So don’t expect the same treatment if Wall Street suddenly vanishes.

Generally, as soon as you hit that buy or sell button your trade is opened. Unfortunately, the stock market is not quite so clean cut when it comes to the user experience.

Minimal Expense when it comes to Commissions

Most FX Brokers do not charge commission or additional transaction fees when you trade currency through them. On top this, spread (the gap between where price is sitting and where your trade executes) is generally transparent and much lower than that of any other market. Simple.

No Uptick on Short-Selling

In the Equity market there is a restriction on short selling. This is not the case in the currency market. Trading opportunities are there in the currency market whatever the direction of the trader and whatever way the market is moving. You always have equal access to trade in both a rising or falling currency market.

No Middlemen

We have already covered this to some extent. The problem with the stock market in some ways is the middleman. These guys cost you money, whenever its transactional fees, or even fees for their time. When trading the Spot Currency market this is not the case. Spot currency is decentralised – this means that the competition between the various brokers is heavy, which ultimately means faster access, and cheaper costs for us.

Large Fund Buy and Sell schemes do not Control Currency movement

A common practice in the stock market is large funds buying and selling stock to directly control the price direction. Because the Forex market is so large, it is less common for this to happen. No matter how big the trader, they are just a small part of a giant market.

Analysts and Brokers are less likely to Dictate Direction

Media can have a very large impact on the masses buying and selling a currency, as can a broker and this can directly control stock price. Not sure what that all means – watch the Wolf of Wall street!

There is a close relationship between company’s stock and their brokers whereas with the FX market, all the broker can actually do is analyse it. So to conclude, here are the things that the Forex market CAN offer you, but the Stock Market Can’t:

  • 24 Hour Trading
  • Minimal or No Commission
  • Instant Market Order Execution
  • No Middlemen
  • No Market Manipulation


I think there is a logical clear winner here, but you be the judge…. My final thought:



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