Abstract：There are dozens of currencies traded in forex, but most of the market participants focus on the seven primary pairs. Isn't it much easier to maintain track of seven major pairs than thousands of stocks?
On the New York Stock Exchange, there are over 2,800 stocks listed. The NASDAQ has about 3,300 companies listed.
Which one are you willing to give up？ Do you have the time to keep up with so many businesses？
There are dozens of currencies traded in forex, but most of the market participants focus on the seven primary pairs.
Isn't it much easier to maintain track of seven major pairs than thousands of stocks？
Take a look at Mr. Forex, for example. He exudes confidence and sexiness. Mr. Stocks doesn't stand a chance!
That's only one of the many benefits of the currency market over the stock exchanges. Here are a few more examples:
Market Open 24 Hours
The stock market is restricted to the opening hours of a particular exchange.
In the United States, for example, most stock exchanges open at 9:30 a.m. and close at 4:00 p.m.
The currency market is open 24 hours a day, seven days a week.
Most brokers are open from 5:00 p.m. EST on Sunday to 5:00 p.m. EST on Friday, with customer service usually available 24 hours a day, seven days a week.
You can trade during US, Asian, and European market hours, allowing you to create your own trading plan.
Commissions are minimal or non-existent.
Because many online stock brokers now provide zero commissions, this is no longer an issue.
When trading currencies online or over the phone, most forex brokers do not charge a commission or extra transaction costs.
Forex trading costs are cheaper compared to other markets because of the tight, stable, and completely transparent spread.
The bid/ask spread is how most brokers are paid for their services.
Trading Volume and Liquidity Increase
The FX market has a daily turnover of $6.6 trillion on average.
Only a small portion of this is reflected in the stock market.
Short-Selling in the Absence of an Uptick
The currency market, unlike the stock market, has no restrictions on short selling.
Whether a trader is long or short, or which way the market is trending doesn't matter, there are trading possibilities in the currency market.
There is no directional bias in currency trading because it always involves purchasing one currency and selling another. As a result, whether the market is growing or decreasing, you always have equal access to trade.
Market Manipulation to a Minimum
How often have you heard that “Fund A” is selling or buying something？ Large fund buying and selling has a significant impact on the stock market.
Because of the huge size of the forex market, the chances of any one fund or bank dominating a certain currency are extremely slim.
During active trading hours for the major currencies, the FX market is sufficiently liquid that serious manipulation by any single firm is virtually impossible.
Banks, hedge funds, governments, retail currency conversion businesses, and high-net-worth individuals are just a few of the players in the spot currency markets, which have never seen such liquidity.
Analysts and Brokerage firms have little or no influence on the market.
Have you recently watched any television？
Have you heard of a certain Internet stock and a prominent brokerage firm's analyst being accused of sticking to its recommendations, such as “buy,” even when the stock was fast declining？
It's just the way these kinds of relationships work. We haven't heard the last of it, regardless of what the government tries to intervene and discourage this type of behavior.
For both the company going public and the brokerage houses, IPOs are major business.
Relationships benefit both parties, companies provide services to the brokerage firms and the brokerage firms provide work to Analysts. That catch-22 situation will never go away.
Foreign exchange, being the world's primary market, generates billions of dollars in revenue for banks around the world and is a requirement of global markets. Foreign exchange analysts lack much impact on exchange prices; instead, they analyze the forex market.
|Minimal or no Commission|
|Short-Selling without an Uptick|
|No Market Manipulation|
The scorecard between Mr. Forex and Mr. Stocks indicates a solid victory for Mr. Forex in the battle of forex vs. stocks! Will Mr. Futures aim for a 2-0 score？
Why Trade Forex: Forex vs. Futures
These champions have one thing in common: they not only work their butts off, but they also enjoy what they do.
"Patience is the key to everything," American comic Arnold H. Glasgow once quipped. The chicken is gotten by hatching the egg rather than crushing it."
Ask any Wall Street quant (the highly nerdy math and physics PhDs who build complicated algorithmic trading techniques) why there isn't a "holy grail" indicator, approach, or system that generates revenues on a regular basis.
We've designed the School of WikiFX as simple and enjoyable as possible to help you learn and comprehend the fundamental tools and best practices used by forex traders all over the world, but keep in mind that a tool or strategy is only as good as the person who uses it.