The stock market (the USA) and Forex market have a lot of distinctions. In Russia the stock market is called share market. What is the difference between these two markets?
1. Work on the stock market starts at 9:30 and ends at 16:00 New York time. That is why traders carrying out most part of trades in the afternoon cannot trade actively on the stock market at this time. In contrast to it, Forex market works 24 hours (besides Saturday and Sunday, these days there is no trading) that allows the trader not to depend on market choosing the most suitable time to trade for himself.
2. As the stock market trading is run with thousands of shares of different companies, it is very hard to predict the shares of which companies would turn up or conversely, go down - it is almost impossible, as well as to get familiarized with all of them. For this reason, choosing some main companies to observe among a great many of others available comes as a rather complicated task.
However, in most cases trading on Forex is implemented with several certain currencies, the price is dollar-denominated. Also the cost of these currency pairs against the dollar and against each other is influenced much more by economic events and news, than the shares of companies on the stock exchange.
It is much easier to analyze objective economic factors impacting the state of things within the countries of interest. As the economic news are always in a free access due to their regular publication by the mass media.
3. During the economic conditions worsening in the country and constant market falling, the investors trading on the stock market face severe problems. In such periods their profits drop significantly and sometimes even reach 0, if the investor does not borrow money of a broker for bear speculation. Because of a cyclic economic development after its collapse there always comes an upsweep, its duration may vary from a few months to a few years.
On Forex market, in distinct from the stock exchange, the traders run trading buying the rising currencies and selling the falling ones. This is the main concept of trading and gaining profit on Forex currency market.
In spite of several advantages of Forex currency market over the share market (stock market) a 100% winning cannot be guaranteed as well as on the stock market, there is also a possibility of losing all your funds.
