When we look at modern day investors they have option to invest in a number of trading instruments. It could range from blue chip stocks of businesses across the board, forex trading and also trading in commodities. Hence, at times you could become confused as to which is the best option when you many choices. Stocks and forex trading are unique, versatile in their own ways and have their own pros and cons. The onus lies on us to gather as much information as possible and then move forward and choose the one which meets specific needs and requirements. There are complications and pitfalls both in share markets and in forex trading. Therefore it calls for understanding the basics and then taking as a decision as to which is better. There are many who are doing quite well both in share and forex and this also is a lesson which you could learn if you are ambitious and willing to make big money.
How Much Risk You Can Take
Whether it is forex market or stock market, there is no doubt that there is risk involved in both. This is because you will basically be guessing and forecasting and then taking a decision to invest. Yes, you will have historical information to help you and also you will have access to details about specific stocks and forex currencies. Based on the above, you will be able to take the right decision to some extent. At the end of the day, however, you have to bear in mind that there is quite a bit of speculation involved whether you are dealing in stocks and shares. Hence, risk is an inherent part of dealing in stocks and forex and this is something which you always must keep in mind. Knowing this fully well will help you to get started in the right earnest and you will know the biggest challenges and problems which you will have to surmount and overcome to become successful.
Blue Chips Versus Forex
If you are keen on getting to know more about forex vs acciones you must start on one important premise. There is hardly any doubt that foreign exchange market continues to be the largest as far as financial markets are concerned. Each day the volume of transactions could be around $4 trillion on an average and this figure is as of 2011. Today it certainly will be much higher. Further millions of traders prefer forex trading because it offers them very high liquidity. Further you also can be sure that you can get involved in round the clock trading. Further you can also leverage on the amount of trading making it perhaps more affordable when compares to trading in stocks and shares.
On the other hand when you talk about trading in stocks in general and blue chip stocks in particular, you basically are looking at long term profits which are quite attractive. In many cases they offer excellent return on investment. Irrespective of changing economic conditions, world situations and other factors, you can be sure that you will see a rise in these blue chip stocks if you are able to hold on to them. However, in most cases you cannot expect to make big money overnight and you must be prepared to play the waiting game. You will be rewarded for your patience in the form of dividends, right issue shares and preference shares which could help your share portfolio to grow in size and value over a period of time.
Volatility
When we talk about volatility we are talking about price fluctuations in the short term. Both forex trading and stock & share trading is subject to volatility and therefore this must be factored when you are getting into either of them. Experts in both stocks and forex rely heavily in this volatility to make money. However, this is risky and not recommended for new entrants because they will not know when to get in and when to get out. Even a few minutes of delay could wipe out entire margins and could also eat into your capital. Hence, the benefits and downsides of volatility is something which always must be kept in mind before getting into either stock trading or forex trading.
Leveraging
When it comes to trading in stocks and shares one should also keep leverage in mind. It varies from country to country. For example, in countries like the USA the leverage is generally 2:1 as far as stocks are concerned. On the other hand, in forex markets the leverage could be significantly higher at could even go up to 50:1. There are some markets where the leverage is also much higher. The moot question is whether leverage is good or bad. It may not be good at all times. While it could help you to get into the forex market with small investment leverage could destroy a trading account within minutes. Yes, it is a fact that there are many situations where you could enter into the forex market with as little as $100 and try to build on it.
Trading Hours
The trading hours is another thing which you must take into consideration before entering either the stock market or the forex market. Stock trading is restricted to exchange hours and in most countries and regions it is between 9.30 am to 4 PM and this is as per the Eastern Standard Time. The stock markets work from Monday to Friday and they are closed on Sundays and market holidays. However, on the other hand when we talk about forex shares it works round the clock once it gets started at 5 PM EST.
The Final Word
The growth of the internet has certainly made both forex trading and stock trading attractive and profitable in their own ways and means. At the end of the day it is all about risk taking capabilities and the final objective that one has in mind. You must do your research properly and then take a decision based on your final goals rather than being driven by opinions and hearsays.
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