How Does Foreign Exchange Differ From Stock Exchange?

Two incredibly famous investment domains, Forex trading and stock exchange are very profitable trading fields today. With investors crowding each domain in thousands, there is often a question among the beginners as to which option is better between stock and Forex trading. 

When it comes to profits, people will mostly prefer Forex trading. However, several believe stock exchange to be the more stable investment domain, which is both profitable and filled with opportunities.

Forex Trading Strategies

Here are the primary differences between Forex and stock trading: 

1) Different Assets Are Traded: 

A very evident difference between Forex and stocks is the asset being traded. In Forex trading, you exchange currency pairs and profit from the difference in their value. And in stock exchange, you buy stocks and sell them later when their value has increased. 

2) Liquidity: 

Between the stock and Forex markets, Forex has greater liquidity. Since it is open 24 hours a day, you will always find counterparty for your exchange! The same can't be said for stock trading. In the stock trading market, finding buyers or sellers take a longer duration. 

3) Technical Factors Affecting Market Value: 

While stock trading, the technical analysis done will consist of researching a company's history, its viability in the stock market, finding profitable conditions for trading etc. But in the Forex Trading In Pakistan markets, technical analysis comprises of studying a currency's complete historic price movement because the currency value is directly linked with the country's economy!  

4) Trading Hours: 

The foreign exchange markets are open 24 hours a day for 5 days a week, giving traders plenty of time to place their deals. This also allows for several provisions like overnight trading, and even helps increase the market's liquidity by a huge percentage. As a stock trader however, you will be limited by time heavily. 

5) Leveraging Facilities: 

Leverage is a provision Forex traders enjoy immensely. With a leveraged sum borrowed from the broker, you will be able to hold positions of higher value. In the stock markets, there's no leverage system. You trade consistently with the capital you have, without any further augmentations. 

Be it stock trading or Forex trading, with the right broker by your side, success will be yours without doubt! Reach out to WesternFX today; we will provide you with everything from the best stock trading platforms to proven Forex Trading Strategies. Our experts have years of experience, and will guide you through your many trades, ensuring profits are bagged consistently. Call us today to get started!