Differences Stock Trading vs Forex Trading
There are several key differences between stock trading and forex trading:
- Market: Stock trading takes place on exchanges, while forex trading occurs over-the-counter.
- Participants: Stock traders include investors and speculators, while forex traders include investors, speculators, central banks, and commercial banks.
- Assets: Stock traders buy and sell shares of stock, while forex traders buy and sell currencies.
- Leverage: Forex traders can use high levels of leverage, while stock traders may not be able to use leverage at all.
- Regulation: Stock exchanges are heavily regulated, while forex trading is less regulated.
- Fees: Stock traders may have to pay fees to both the exchange and their broker, while forex traders only have to pay a spread (the difference between the bid and ask prices) to their broker.
- Trading hours: Stock markets have fixed trading hours, while forex markets are open 24 hours a day, five days a week.
- Volatility: Forex markets can be more volatile than stock markets, as they are influenced by a wider range of factors.