| The main objective of both stock trading and forex | | | | currencies available for trade |
| trading is to generate profits. In fx trading you buy | | | | In the NASDAQ and New York Stock Exchange |
| or sell different currencies in the international currency | | | | alone over 8,000 stocks can be traded. As against |
| market. Stock trading involves trading in stocks listed | | | | this the number of currencies that can be traded in |
| with the exchange of a particular country. | | | | the Forex market is much less. In fact there the |
| There are many advantages of forex trading which | | | | most traded currency pairs normally are EUR/USD, |
| offers greater flexibility and returns to investors. | | | | GBP/USD, USD/JPY, AUD/USD.o Margin |
| Some of the main advantages are:o 24 hour trading | | | | Margin limits are always set for forex traders. This |
| Forex Market or Foreign exchange trading begins | | | | ensures that you don't lose more than the balance in |
| from 5pm EST Sunday and lasts upto 4pm EST | | | | your trading account at any time. You will also be |
| Friday. This allows traders to choose any forex | | | | able to ascertain your liability well in advance. Not all |
| trading times during the 24 hours of the day. Stock | | | | stock brokers insist on margins. Without margin |
| trading is regulated by exchange houses which | | | | requirement stock transactions can even wipe out |
| stipulate the terms and conditions of operation.o | | | | your entire savings if you are not careful.o Liquidity |
| Brokerage / commission | | | | In forex trading whatever is brought or sold is highly |
| In forex trading you only pay your broker the | | | | liquid. The currency you buy or sell can immediately |
| difference between the Asking and the Bid prices. In | | | | be converted back into cash or exchanged for any |
| stock trade brokers normally charge a commission on | | | | other currency. On the other hand in stock trading, |
| each trade transaction that they execute on your | | | | the seller has to give delivery of the specific stocks |
| behalf. Therefore compared to forex trading you pay | | | | traded for the ownership to pass on from the seller |
| your broker much more for stock trading. Brokerage | | | | to the buyer. The buyer too has to pay for the |
| charged for online stock trading is much less | | | | stocks purchases. This entire process takes time and |
| compared to manual trading.o Number of stocks/ | | | | is not instantaneous in most countries. |