Part of the things to include in your forex trading tutorials when learning forex trading for beginners is how trading the forex market differs from stock. The purpose of this article is to show you these differences. These differences come with advantages and disadvantages as you can see below:
Open Market Hours
One of the key differences between the forex market and the stock market is their opening hours. While the stock market opens during the opening hours of the stock exchange, the forex market has no one single central exchange and is opens around the clock five days a week, from Monday to Friday. This gives forex traders more flexibility to trade the market at their most convenient time. This means that you can place trades on the Forex market whenever you find a trade-worthy opportunity.
The next significant variation between forex trading and stock trading is the tradeable instruments. You can choose from thousands of stocks to trade on in the stock market but the forex market only has few numbers of currency pairs you can trade on. It is not essentially a disadvantage for the forex market. Forex traders commonly concentrate on a few currency pairs and follow every trading opportunity of such currencies. The traders of the stock market follow from dozens to hundreds of stocks which take an enormous amount of time.
The next variation between the two markets is the overall trading cost. The Forex market has one of the least transaction costs in the financial market. The most common fees that traders pay is the spread. While trading the major pairs like the EUR/USD pair, the spread you pay could go as low as 1 pip. The stock market comes with comparatively higher fees, and a few brokers equally impose specific commissions on stock trades.