Tuesday, May 17, 2016

Graduating from the Stock Exchange to Forex

Active investors make more than educated guesses- they make informed decisions based off countless hours of research and market inspection. Unfortunately, the best options for high-energy, short-term investors with their fingers on the pulse of the market, are often the riskiest. Day trading and similar practices leave more people in debt than they make rich.

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Instead of wasting your time and talents with thousands of fickle companies, short-term investors are better suited for the forex (FX) markets. Forex rewards impatient investors with steady, reliable returns based on greater leverage than that provided by stock brokers.

Why It's Better

Put simply, if trading stock has gone from a hobby to a part-time job for you, the FX market is more likely to give substantial returns over time. Here's why it's more profitable and efficient:

  • The most obvious difference between the FX and stock market is that in the foreign exchange, there are only 8 major countries to consider, as opposed to thousands of companies on the stock exchange.
  • The stock exchange is a superb investment for long-term traders, who benefit most from blue chip companies and depending on dividends. On the other hand, forex markets are ideal for savvy investors who want to turn a quick profit, with leverage options up to 200:1.
  • Currency trading occurs 24 hours a day, 5 days a week.
  • FX brokers do no collect exchange, brokerage, or clearing fees for their services. They are instead paid a part of the difference between the currencies in exchan ge, whether you buy or sell.
  • Currency is much more secure than stock, ensuring that you will never be left with a worthless, unsaleable investment. The price may fall, but for quick liquidation there will always be someone willing to buy your currency.

As you can see, FX markets give you more freedom and higher earning potential for informed and active investors. With just a handful of countries to consider, and much lower brokerage costs, forex[1] investors have the resources to expand their portfolios and improve earnings.

Getting Started

If the fast-paced, low-risk nature of forex interests you, the barrier to entry is quite low. There are test accounts available all over the internet to let yo u test your skills against the market without investment. If you feel confident in your skills, however, with plenty of experience trading stock, you may want to jump right in.

While currency trading was once reserved for the elite, almost anyone with a computer can get involved today. Similar to the equity market, you need to open a trading account. Remember that FX brokers make money differently, and provide different services than stock brokers, and so you should do you research carefully before opening an account with one.

Beginners to forex typically start by trading real-time currency pairs[2], and the vast majority of business done on forex markets is done this way. You may also buy derivative products, p rofiting from individual currency rate changes.

Orders for forex positions are very similar to those in the equity market, and will be easy for stock traders to understand and start trading right away. The two markets are similar enough that a lot of knowledge and skills will transfer.

Choose Profit

Serious amateur investors put more than money on the line, and it's only fair that you be compensated for your effort. Forego the risk and long-term investment requirement of the stock market in exchange for the quick return and low risk of FX.


  1. ^ forex (www.easymarkets.com)
  2. ^ currency pairs (www.investopedia.com)

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Graduating from the Stock Exchange to Forex Rating: 4.5 Posted by: Unknown


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