Forex trading vs stock trading is an awesome look into an investment opportunities that have many similarities as well as differences. Its hard for me to say which one would be better than the other because they both have some great money making opportunites both short and long term. This article will focus on the facts and hopefully provide up to date information for you to read that you might not find anywhere else.
Forex trading vs stock trading is a topic with many opinions. Stocks trade everyday in the billions and forex trades in the trillions. Some might say since forex is trading at much higher volume each day there is more money to be made or possibly a greater risk. I am not a believer. I believe proper education in either trading platform will allow you to make money.
The biggest difference is what is actually traded each day. Forex trades currency pairs which means a trader will put in trades betting for or against a certain currency pair such as the Euro vs the US Dollar (EUR/USD) or the British Pound vs the US Dollar (GBP/USD). Stocks on the other hand will deposit your investment in actual businesses and companies. You will buy shares into a particular stock or business and your anticipating the stock for that particular company will go up.
If forex trading vs stock trading comes down to investing either for the short term or the long term than this can be debatable in my book. I think stocks are better geared for the long term. If you go with a brokerage firm or have the expertise to invest on your own you will earn more money over the long haul than you would if you had your money just sitting in a bank. Stock trading allows you to earn dividends along with the earnings when the stock goes up. Dividends can be be paid out monthly, quarterly or annually depending the company. Depending on how long you invest in stocks these earnings can really add up. Forex trading does not allow you to earn dividends on a trade over the long haul.
Both trading platforms have great opportunities to invest for the short term. Researching a companies public conference calls and learning the past histories of the stock prices can really help a person to learn a great entry point for their investment. Forex trading has big swings throughout the day so learning the charts and technical indicators helps a trader to earn money. Since forex trading trades at such a high volume each day its not unheard of for a person to take a small $200 or $300 investment and turn it into thousands in a very short time. Why they both have an equal opportunity to earn money on the short term is the ability to bet against the stock or currency pair. This means a trader earns money when the stock or currency pair goes down. This is great for the short term investor because they are able earn money when the prices go up or go down depending on how they invest. A properly educated trader will earn a lot of money on either platform because of this ability.