The Main Differences Between Forex and Stock Trading

The foreign exchange is famously known as forex,or simply currency trading is a global market which is decentralized where all the worlds currencies trade. It is the most liquid market with a high number of average daily trading volume. The important thing in the forex market is the rates of exchange between any two currencies which is known as the currency pair. A unique aspect of this trading is that it’s international and it’s decentralized.

Stock trading happens in a stock market which is basically the aggregation of buyers and sellers. This represents ownership claims on businesses which include securities that are listed on the public stock exchange. The goal of buying a stock is to hold it for some time then sell it at a higher price than what you paid for.

Trading hours

Both of these two have very strict market timing. For the forex market, it operates 24 hours a day and takes a break thrice throughout the year. Usually, the forex market doesn’t overlap,but you can decide to use specific trading hours which may differ due to time differences.

As for the stock market, it operates for about 7 to 8 hours in three trading sessions. The market before opening is also crucial as that’s when the stock traders place their orders before the real market opens and start running.

The marketplace for trading

Juno Markets forex is independent regarding the marketplace for traders. Thisis what is known as the over the counter exchange or OTC. The trade can occur according to the location, the demand for trade and most important within the government rules and regulations. Some countries don’t allow certain different currency pairs and its deemed illegal.

The stock market runs in a centralized setup. This could vary from one state to another or from one country to another. This is contrary to the forex exchange. This means that the forex market is bigger than the stock market regarding liquidity.

Varied leverage

Leverage refers to the minimum amount which is required to trade any particular asset. In the forexmarket, the leverage is usually ten times more than the stock market like 50:1. In stock, the ratio will be 5:1.

The trading speeds

The forex market supersedes the stock market when it comes to liquidity. This makes it more instantaneous without delaying. It makes it a much faster trade.In the case of the stock market, you have to be patient and wait for the order to be executed because of the dealer or broker in between the trade.

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