Trading Stocks Vs. Trading Currency

Trading stocks and currency are very different. Some people prefer to trade on the stock market, and others prefer to trade on the Forex Market. Which one is better? Well, consider these following points, and then make the decision for yourself:

Leverage


The amount of leverage allowed on the two markets is quite different. When trading on the stock market, you can trade with leverage, but it will be very small, such as 2:1, and you have to qualify for it. When trading on the Forex Market, all you need to trade with leverage is to be able to open an account. If you can open a bank account, you can open a Forex account, so it is much easier. Also, you can leverage much higher in the Forex Market. In the US, you can’t leverage higher than 50:1, but in other places throughout the world, you can leverage 100:1 or more.

What You Need To Consider

Doing stock market analysis is important, and requires a lot of research about the companies you wish to invest in, but once you make a decision, you only need to worry about whether the company is going to continue along the path they are on, and hope they become more valuable. Forex analysis is also important, and can be more complicated. When trading currency, you have to consider the GDP and the economy of the country whose currency you are considering. You have to see what the political climate is, and if there are other circumstances on the horizon that might affect the currency. The Forex market can change much faster than the stock market.


Amount of Freedom

There are Forex brokers and stock brokers. You can consult a Stock EA and a Forex EA. You can use different stock programs and Forex programs, such as Stock Trade Copier and Forex Trade Copier. You can look at stock market trends and Forex signals. Even with all of this knowledge, you are still not guaranteed a win or a loss. Both of these trading options leave the trades up to the trader, but this is where the freedom aspects change. The stock market is not open as often as the Forex Markets. There is a lot more regulation in the stock market than in the Forex Market. The Forex Market is more volatile, but the stock market has more rules. Ultimately, the choice is yours.

Top Three Trading Secrets To Know Before Starting in Forex

Getting started in the Forex Market can sound wonderful and exciting at first, but as soon as the research begins, there are many people that get confused about what they are reading, what they are seeing, and how it works. Before getting started, a trader has to have a good grasp on the basics. Once an understanding of what Forex is and how it works is there, the trader is ready to look into how to do the trading itself. Here are the three most important topics to learn before getting a Forex broker and trading in the live Market.


Learn the Vocabulary


Before getting started in Forex, you have to know what everyone is talking about. If you are not sure what pips are, or what shorting is, you are not ready to get started. If you think a Forex EA is a person sitting on the other end of a phone, ready to give you some advice, you are not quite ready to get started. Getting to know the language of the business is extremely important. There are websites out there that have lists of words in alphabetical order that are worth looking at.



Know How to Obtain Useful Analysis


You don’t want to just jump into the currency trade. You want to do a complete Forex Analysis before developing your plan. If you are not sure how to obtain that information, or what information to get, you are not ready to trade in Forex. You want to find places that help you learn the economic, political, and social occurrences that are going on in the world, and which ones people suspect will affect the market. Getting Forex news is important to making good decisions. You might even be able to get advice on what Forex broker to use before you start with your actual trading.

Technical Analysis


You want to be able to read the charts and graphs that give the fluctuations and trading information. There are Forex signals to look at, charts to analyze, and graphs to use to help determine trends that might be of use.


Once you are able to grasp the basic understanding of these tools, you are well on your way to being a successful trader. It takes a lot of time and research before a person can enter into the Forex market fully prepared, but it is time worth taking.

Top 5 Things To Consider When Picking A Forex Broker





Once you have done all your research and determined the amount of capital you want to invest into the Foreign Exchange Market, it is time to choose a Forex Broker. Choosing a good broker is important, because they help determine your investments. So what do you look for when trying to pick a broker? Look into these five things first:

Compare The Spread
 

The spread is the amount that the broker charges for each transaction. For instance, there might be a 3 pip spread between USD/EUR, but the broker will charge 5 pips, pocketing the 2 pip difference. Some brokers have large spreads, and some have small spreads. This is one thing to consider when choosing a broker, but it is definitely not the only thing. Like so many other things in life, cheaper is not always better.
 

Capitalization

 

Because of the large amounts of capital that is required to trade on the Forex Market, large banks or institutions back most brokers. Make sure the broker you choose in sufficiently backed. In the past, there have been brokers with very little capital behind them, and that can be a very dangerous place to keep your money.
 

Choose the Right Platform

 

There are so many platforms available for you to choose from, Visit as many as you can, and determine which one is the most user-friendly for you. Make sure they have all the necessary information and education to help you as you trade. Many of the brokers offer a live Forex EA that you can talk to online. This can be good for more detailed questions you might have. Most of them also have webinars, articles explaining the process, and practice accounts that allow you to test your theories before you put them into actual practice. There are some that use Forex Trade Copier with their platform, which was ranked #1, though there are other good ones out there as well.
 

Be Able to Study Forex  

You need to understand the Foreign Exchange Market before you jump in and invest your money. Make sure to do a complete Forex Analysis, and learn to understand the Forex Signals. Your broker should offer easy access to valuable analysis and timely signals.
 

Proper Account Types

 

Finally, you want to be sure that your broker offers different types of accounts. You want them to be able to accommodate the different types of traders based on the amount of capital they have to invest.