Most of you probably do not know the difference between the Stock or security market and the Forex market and this post is for you. These Forex market vs Stock market are known as capital market or investment market. These Forex markets and the Stock market are totally two different markets. One has no relation with the other. The factors of each market are completely different such as currency is for Forex market and the share or security is for the Stock or the share market. For example, share market is such a market where the limited companies are registered to the Stock market and here sell and buy their shares. Stock market is divided into two levels such as primary market and secondary market.
- The primary Stock market influences the economy of a country greatly. Its advancement and betterment influences the Stock market importantly. Generally the companies launch their IPOs in the primary market. According to the rule, the buyers of the securities are the personal or the institutional (investment-capital, insurance companies etc.) investors. The securities of the primary market are considered by the direct buy and sell of the investors.
- There remain the over the counter market and the Stock exchange within the secondary Stock market. Here the buyers resell their already-emitted shares to the other investors. The secondary market unlike the primary market does not influence the economy of the state. The main participants of this market are those who buy share with low price but sell with high price.
One of the main elements of the share market is the price. It is composed with the direct participants with the buyers, emitters, middlemen and the investors. The values of a market are formed by different principles like Excess of securities, and its approver, demand, market situation etc. These principles are considered by formation of value in the Stock market, evaluation of primary or highest or lowest price, acquiring benefit very fast from sale, entering into the market and by taking the possession of a part the Stock market. The Stock traders have different types of targets like earning benefit from the difference of the Stock rate, earning dividend etc. In spite of having steadiness and securities one is recommended to study and analyze the market to reduce the risk.
Stock market is generally situated in the Stock Exchange. The largest Stock exchanges are in the world are in United States of America, United Kingdom, Japan, India, China, Canada, Germany, France, South Korea, Netherlands.
Forex market is an foreign international exchange market. The word ‘Forex’ is formed from ‘foreign’ and ‘exchange’ that means ‘foreign exchanging task’. In fact Forex is the trade of buying and selling foreign currency. The price of a currency ups and downs for several times in a day. The benefit (pips) comes from depending on this ups and downs.
The rate of currency changes by the public institutions along with private companies who exchanges the foreign currency into local currency earned by exporting commodities or service. Though this amount is only 5 percent of total marketing of currency. And the remaining 95 percent is carried out by the temporary investors who want to profit by buying and selling currency. In fact, these people are the Forex traders.
Another difference between the Forex market and the Stock market is the amount of necessary capital. One has to have 10 thousand dollar to 100 thousand dollar to buy share from the Stock market.
An important matter for the Forex market is its steadiness. Because the worst matter for an economical market is its ‘melt down’ or the fall of Stock indicator. Though the Forex market remain secured by its definite element- currency, which is different from other Stock market and from other common market.
If the value of share decreases then it is called economical slow down. But if the value of US dollar decreases then other currencies become more powerful.
It brings a new current in the market. So it is a fine opportunity for a trader to make a good amount of benefit. The reason for this excellent steadiness in the Forex market is that money is the most liquid and most dependable trading element.
Facilities from the Forex market vs Stock market :
Trading in the Stock market is controlled and steady which is unlike the Forex market where a man can profit or lose a high amount for the difference of short time.
Though Forex market is the biggest market according to the size and the fast growth. Its daily buy-and-sell amount is approximately4 trillion dollar which is 30 times more than the total exchange of all the Stock exchange of America.
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Another inevitable facility of Forex market is that one can enter into the market easily. It is not difficult to find out a faithful broker because there are many dependable brokers in the market. The rests depend upon the man who wants to join the Forex. But most of the Forex traders leave the market after being benefited from here and join the Stock market.