FOREX Market vs Stock Market

Looking at the FOREX and stock markets, you will notice some key differences between the two. Both of these markets have some definite benefits for investors and some potential drawbacks. Here are some of the differences between the FOREX market and the stock market.


One key difference between these two markets is in the way that commissions are charged. With the stock market, you are going to be charged a certain amount of commission for each transaction that you have. Some brokers will charge you a flat fee while others will charge you a percentage of the total amount of money that you trade. With the Forex market, this is not going to be the case. Instead, you will not be charged any commission on any of your trades. The broker makes their money through the bid/ask spread on each trade. In this way, the costs of trading are significantly reduced and you can increase your returns.

Market Hours

Another big difference between these two markets is when you can trade. With the stock market, you are only going to be able to trade during the business day. After that, you could potentially trade in overseas stock markets if you want, but you will not be able to trade again in your normal market until the next day. With the Forex market, you can trade anytime that you want. The Forex market is open 24 hours a day, five days a week. You will not be able to trade on the weekends, but other than that, you will be able to trade at all hours of the day. This makes it more convenient for those that want to trade on a part-time basis.

Analysis Overload

With both of these markets, you could potentially overload yourself with analysis. In the stock market, there are numerous trading systems and methods that you could use to over-analyze things. In addition to this, there are also thousands of stocks for you to choose from. In order to be a successful trader, you will have to spend many hours researching the different companies that are in the market. With the Forex market, there are also a lot of indicators and trading strategies that could confuse you. However, there are only a few currency pairs for you to choose from. You do not have to spend countless hours learning about all of the different currency pairs that are available to you.

Trend-Neutral vs Uptrending Market

At some point, you will experience both a neutral market and uptrending market with both types of trading. In the stock market, you could potentially continue to make money even if the market is not trending. You will be able to still earn dividends from your stocks. With the Forex market, you can also use a strategy known as scalping to take small profits out of a neutral market that is barely moving. Both markets can also provide substantial profits during an uptrending market.